Skipping pre-approval sees 1-in-10 first home buyers miss out

Buying a first home isn’t always easy, and first-timers sometimes miss out on a place they’ve set their heart on. But more than one-in-ten first-time buyers have missed out simply because they didn’t have home loan pre-approval.

Buying a first home can be an emotional roller coaster. It’s not unusual to find a property you love, only to lose out.

A Finder survey shows three-in-five first home buyers have been beaten to homes – usually because they’ve been outbid by a competing buyer.

There’s not a lot you can do about another buyer having deeper pockets.

But there are steps you can take to potentially give yourself a strategic advantage.

One of them is having home loan pre-approval.

Yet Finder reports more than one-in-ten (11%) first home buyers lost out on a home because they didn’t have pre-approval in place.

Here’s why pre-approval can give you a competitive edge.

What is home loan pre-approval?

Home loan pre-approval involves applying for a home loan before you begin house-hunting.

It’s a chance for a lender to check out your details (such as your income, deposit and savings record), and give you the thumbs-up for a loan to a certain price limit.

Think of it as you and your lender both swiping right on each other.

Pre-approval shouldn’t cost you anything. And you’re not committed to take out the loan.

But it can be very reassuring to know you’re good for finance when the right property comes along.

As the lender specifies how much you can borrow, pre-approval also helps set a buying budget, and lets you confidently negotiate on price or bid at auction.

The risks of skipping loan pre-approval

Of course, you can choose to apply for a loan after you’ve found a home to buy.

It can be a more high-stakes approach, and leaving things this late can put you at a disadvantage.

Lenders usually need time to review your application and decide if you qualify for a loan – and how much you can borrow.

That time gap could see a more organised buyer jump in and beat you to the finish line if time is a factor for the vendor.

There’s also the risk of overestimating your borrowing power (that said, we can help you work that out without going through formal home loan pre-approval).

Long story short, while loan pre-approval is not compulsory, it can be a smart step that lets you act fast – and with confidence – and it tells sellers you’re a serious contender for the property.

The fine print on home loan pre-approval

A few finer points of home loan pre-approval are worth knowing:

1. Pre-approval comes with a time limit: loan pre-approval doesn’t last indefinitely. In most cases, pre-approval extends for three to six months depending on the lender. Don’t let this rush you. We can help you reapply for pre-approval if that time lapses.

2. Pre-approval is based on your circumstances when you apply: life doesn’t stand still for long. If your circumstances change after receiving home loan pre-approval, let us know and we can talk to your lender to update your pre-approval.

3. Not all lenders offer home loan pre-approval: every lender is different. And some choose not to offer loan pre-approval. We can save you time by explaining the lenders that offer pre-approved home loans.

Get in touch for more information

If you’re not sure where to begin with home loan pre-approval, contact us today.

We can guide you through the steps involved, and explain how home loan pre-approval could help you beat other buyers to the punch.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How your home can help your kids get a great education

Location, location, location. Or should we say: education, education, education. New research shows homes in the catchment areas of sought-after public schools can command six-figure price premiums. Here’s why.

Your home can be much more than a roof over your head. It’s also an investment that may build personal wealth and serve as a form of disciplined saving.

And a new analysis by Cotality (formerly CoreLogic) shows our homes can also play an unexpected role, such as helping our kids enjoy a decent education.

Families pay 6-figure premiums for homes in popular catchment zones

Cotality recently looked at property values inside high-performing public high school catchment zones in Sydney and Melbourne.

It found what families around Australia have probably long suspected – that homes located inside catchment areas for popular public schools can command 6-figure premiums compared to similar properties outside the school zone.

The willingness of families to pay more isn’t just about the kids being able to walk to school.

Cotality says that while the price premium within popular public school zones can top $100,000, this can still see families saving money when compared to paying for private schooling over many years.

Better still, unlike school fees, which tend to rise over time, mortgage repayments often decrease in real terms due to inflation.

3 ways your home (and home loan) could help with school costs

Pulling up stumps and moving to a new home within a particular school catchment isn’t for everyone.

Fortunately, there are other ways your home and mortgage could help fund a quality education.

Here are three strategies you could consider.

1. Pay for school fees using an offset account

An offset account is an at-call account linked to your home loan.

Instead of earning separate interest on the offset account, the balance is deducted from (or ‘offset’ against) the value of your home loan when loan interest is calculated.

If you have, say, $50,000 in the offset account, and a mortgage of $600,000, loan interest will be based on a balance of $550,000 instead of $600,000.

In this way, an offset account can help you achieve two goals – providing a secure place to grow savings for your child’s education, while also helping you get ahead with your home loan.

2. Tap into home equity

Home equity – the difference between the current market value of your home and your loan balance – can be put to work to achieve a variety of personal goals.

With almost half (44.8%) of all suburbs across Australia now at record high values, you could have more home equity than you realise.

One way to use equity is to request a loan top-up from your lender. We can explain what’s involved for your specific circumstances

In general though, the decision to tap into home equity should be a cue to review your home loan.

Refinancing to a new loan could see you save with a lower rate or access improved loan features – all while freeing up equity to pay for a place in the school of your choice.

3. Invest in a rental property

A rental property may also help pay for your child’s education.

Your tax advisor or accountant can explain if an investment property is a suitable choice for you.

Broadly speaking though, the regular rent you receive, plus possible tax savings from negative gearing, and a rise in the property’s value over time (which can generate more equity to use) all have the potential to help you fund school costs down the track.

Alternatively, you could also consider rentvesting.

This can allow you to buy a more affordable property that’s outside your desired school’s catchment area, while renting a home to live in inside the catchment area.

Keen to learn more?

Paying education expenses can be challenging. But let’s face it, so can a mortgage if you overextend yourself.

That’s why it can be important to assess your borrowing capacity before you go house hunting.

We can help you work out how much you can comfortably borrow, which in turn, can help you buy a home in the catchment area of a school that you’d like to send your kids to.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Newly built homes notch up strongest sales in 3 years

There’s a lot to love about buying a brand new home, and sales of recently constructed homes have increased 19% over the last quarter. We look at the pros and cons of buying a new home – and the financial incentives available to new home buyers.

Fresh paint, spotless floor coverings and shiny new appliances. It’s easy to see the appeal of newly-built homes.

And it turns out a growing number of Australians are choosing new homes.

The Housing Industry Association says sales of new detached homes rose 18.8% in the three months to June 2025 compared to the previous quarter.

It’s the strongest new home sales in almost three years.

Despite new homes having loads of appeal, they can come with downsides.

Here’s what to weigh up.

The pluses of buying a newly built home

The word ‘new’ says it all.

As a new home buyer, everything in your property is squeaky clean – no outdated appliances, no dodgy décor – just a shiny new home built with modern lifestyles in mind.

That’s not the only upside.

A new home can offer other advantages:

– Energy efficiency: new homes must be built to a high standard of energy efficiency. It can make a new home more comfortable, and provide savings on utility bills.

– Lower repair/maintenance costs: buy a new home, and you can be fairly confident that repair and maintenance bills aren’t going to burn a hole in your wallet – in the early years at least. If repairs are required, the cost may be covered by the builder’s warranty.

– Opportunities to customise: if you build a new home, you may have the opportunity to alter the layout, fittings, finishes and colour palette to suit your personal preferences. It can cost a lot less to make these changes during construction compared to renovating an older home to your taste.

– High depreciation for investors: if you’re buying as an investor, a newly-built home can offer depreciation benefits, which could translate to tax savings.

Possible drawbacks of new homes

Property is usually a major purchase in your life. So it’s important to look beyond the appeal of a newly-minted home to decide if it’s right for you.

Points to weigh up include:

– The possibility of an outer suburban location: unless you decide to build on an in-fill site in an established suburb, newly built homes are most often found in outer suburbs.

This sort of location won’t suit everyone.

But if you can push past the growing pains of a new suburb (such as less established infrastructure), a freshly-built home may be more affordable than an established home in an inner suburb.

– You may have a stressful wait: with an older home, you can usually move straight in after settlement. Buying a new home can mean waiting for construction to be completed and signed off by council.

Anyone who’s watched Grand Designs can tell you the process can be extremely stressful, with building costs and timeline blowouts commonplace. You may also face delays and disputes when it comes to getting the builder to fix any defects.

All this can mean paying rent longer than expected – or living in a tiny trailer onsite, as so often happens on Grand Designs.

Government incentives for buying a new home

Buyers of new homes may benefit from savings on stamp duty and government incentives.

– First Home Owner Grant: this changes from state to state, so do your research here. But it is typically only available if you buy/build a new home (or in some states, a substantially renovated home).

– Stamp duty incentives: stamp duty is usually based on the value of a property at the time of purchase. This being the case, buying land first and building later can mean savings on stamp duty.

As home prices push higher, most Australian states including New South Wales, Victoria, Tasmania, Queensland and Western Australia, have made stamp duty concessions available to first home buyers, no matter whether you buy a new or established home.

First home buyers in South Australia still need to buy/build a new home to be eligible for stamp duty savings.

We can help explain your home loan options

Finding a loan that matches your needs depends on whether you are buying land to build on later, opting for a house and land package, or purchasing a newly constructed home.

Get in touch with us today to discuss your plans and we can run you through some funding options that could help you enjoy the benefits of owning a brand new home.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Has your borrowing power increased in 2025?

If you haven’t checked your borrowing power recently, it might be worth another look. A lot has happened in 2025, and your borrowing capacity could be higher than you realise.

It’s been a busy year on the money front.

Tax cuts, a couple of rate cuts, and reductions in HECS debts have all potentially been a plus for our financial wellbeing.

That’s not all that’s improved.

There’s a decent chance your borrowing power has enjoyed a boost, which could make now a good time to revisit your borrowing capacity.

What shapes your borrowing power?

Your borrowing power, or as lenders like to call it – your borrowing capacity – is the amount a lender will let you borrow to buy a home.

Each lender has their own way of calculating borrowing power.

But it mainly boils down to three things: your income, your household expenses, and any other debts you may have that’ll need to be repaid alongside a home loan.

The important thing to know is that your borrowing power isn’t set in cement.

It can change over time, and recent months have seen several events that are likely to have increased your borrowing capacity.

Here are 4 reasons why your borrowing power could be on the rise.

1. Interest rates have fallen

Two official rate cuts this year have helped to lower home loan interest rates.

This time a year ago, the average variable rate on new loans was about 6.3%. Today it’s closer to 5.8%.

Lower rates mean lower monthly home loan repayments. This flows through to higher borrowing power.

How much higher?

Canstar says the February and May rate cuts could have added $23,000 to the borrowing power of a single person on the average wage. A couple may have seen their borrowing power increase by $40,000-$45,000.

2. Tax cuts have kicked in

A year ago we were celebrating the arrival of Stage 3 tax cuts that put money back in our hip pockets.

Tax cuts can have another happy side effect.

Paying less tax can mean more after-tax income. This converts to higher borrowing power.

The uptick can be surprisingly generous.

According to Compare the Market, the Stage 3 tax cuts could mean a couple with no kids has seen a $47,000 increase in their borrowing capacity.

3. Wages are up

Around 2.9 million Australians received a pay rise from the start of July thanks to a 3.5% increase in the National Minimum Wage and award wages.

Even if you’re not covered by these wage rises, the boss may have agreed to give you a pay rise from 1 July.

Or a new job could see you earning more.

Talk to us to know how a bigger pay packet may have impacted your borrowing power.

4. Lenders are treating HECS-HELP debts differently

In the past, lenders have typically included student debt – that’s HECS-HELP loans – in their loan serviceability calculations.

In 2025 however, lenders have been given the flexibility to overlook HECS-HELP repayments as long as the outstanding student debt is close to being paid off.

If this sounds like you, your borrowing power may now be higher than you expect.

Steps you can take to potentially lift your borrowing power

Keen to boost your borrowing capacity further? It may be done by following some, or all, of the steps below:

Reduce regular expenses: lenders take household expenses into account when deciding how much you can borrow. Trimming back a few regular bills can make a difference to your borrowing power. Consider cutting back subscriptions for apps and streaming services, the gym, or shop around for cheaper power or phone plans.

Cut your credit card limit: lenders assess your borrowing capacity based on your card’s credit limit, not the outstanding balance. As a rough guide, every $10,000 of credit card limit can reduce your borrowing power by about $50,000. If you’re not keen on cancelling a card altogether, consider contacting the card issuer to lower the credit limit.

Keep a lid on other debts: the more you can cut back other debts, such as personal loans or car loans, the higher your borrowing power can be. Sure, it’s not easy paying down debt. But keep your eyes on the prize – it could take you closer to buying your first, or next, home.

Get to know your number

Just because you can borrow more, doesn’t mean you should borrow more.

Even so, it’s always worth knowing your personal borrowing capacity – it’s a key number that can help you achieve your property goals.

Get in touch if you’d like to find out your current borrowing power.

We can share ways you can improve your borrowing capacity, and explain how you can make the most of it to apply for a loan that matches your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Two-thirds of borrowers could save by refinancing: report

Home owners hoping for rate relief in July may be disappointed, but it’s still possible to score a rate cut of your own by refinancing. Despite this, plenty of borrowers are sticking to an old loan – and it could be costing them.

When it comes to rate cuts, nothing is certain until the Reserve Bank of Australia (RBA) wraps up its board meetings.

We saw this in July, when a long line of pundits predicted a rate cut was almost a sure thing, only to see the RBA keep rates on hold due to concerns about an uncertain economic outlook.

The good news is this hasn’t stopped tens of thousands of home owners negotiate a personal rate cut by refinancing.

Refinancing ramps up in 2025

Recent figures from property settlement firm PEXA, show refinance volumes have rebounded, rising 12.5% over the year to March 2025 as borrowers chase lower rates.

That’s seen thousands of home owners land a rate cut of their own, with the Australian Bureau of Statistics reporting over 65,000 home loans were refinanced in the first three months of 2025 alone.

But it seems many are still missing out.

A survey by Compare the Market shows 65% people who’ve had the same home loan for 3-plus years haven’t refinanced.

And in today’s home loan market, a loan that was competitive back in the day may no longer be such a great match for your needs.

Why think about switching?

As we saw this month, there are no guarantees the RBA will bring future rate relief.

That’s why it can be important to take a front-foot approach by getting in touch with us to compare your home loan options.

This especially applies if you’ve had the same loan for several years, because there’s been plenty of action in the mortgage market lately.

Mozo reports that some lenders have introduced rate cuts on their own, others have held back on official rate cuts, and a growing number are offering fixed-rate options starting with a ‘4’ (now there’s something we haven’t seen for a while!).

Is refinancing right for you?

Loyalty is a great quality – just perhaps not when it comes to home loans.

Sticking with an old home loan can mean paying a higher interest rate than necessary, or missing out on improved loan features.

If you and your loan have been together a while, call us to see if your home loan is still suitable for your needs – and if not, we can help you find one that is.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.