One of the biggest advantages of buying off the plan is time. Unlike traditional property purchases with relatively short windows to round up the total finance, you will have at least 12 months, if not longer, to settle. Savvy buyers will take advantage of this extra time to save their pennies and reduce their borrowings.

If you dream of a new home but have nightmares at the thought of building one, an off-the-plan purchase may be the perfect compromise. Although you will not get to design everything as you would with a custom-built home, most off-the-plan developments allow some customisation of finishes and fixtures. Make sure your contract outlines what you can tailor and that you are clear on any additional costs.

Various incentives are still being dangled in front of first home buyers, which may add to the appeal of buying off the plan.

Concessions vary across Australia and some have been curbed since January 1, so visit your State or Territory web site for the latest information on grants and exemptions. You can also research your eligibility for stamp duty concessions on new properties on your local office of state revenue website.

Off-the-plan apartments are often pitched heavily at investors due to the tax* benefits that come with depreciation on new properties and rental guarantees. Tax savings will depend on your individual circumstances, but generally the newer the property, the higher the depreciation allowance for the building and fixtures.

Investors may also be offered attractive rental guarantees for a limited period. Make sure you do your homework on rental returns on similar properties in the area before accepting the developer’s terms. Be wary of over-inflated rental guarantees. Builders will sometimes promise a high-rent yield to lure investors, build the cost into the property price and then subsidise any gap themselves for a short period. When the rental guarantee expires, you may find the actual market rent falls well short of what you originally pocketed. If investing, make sure you have the option to manage the property yourself or with your chosen property manager from the time you take possession.

Many buyers get swept up on a wave of rising property prices when they hand over their deposit in exchange for a floor plan. Historically, property is a consistent long-term performer, but property prices can plateau and even wane at the mercy of economic factors.

Buyers also need to be wary of over-supply, which may devalue their property. Queensland’s Gold and Sunshine Coasts are carrying a glut of apartments on the back of many years of off-the-plan sales, while the skylines of capitals such as Canberra have real estate commentators urging caution.

Make sure you consider the bigger picture if buying off the plan. Research how many other developments are planned in the area and whether any increase in apartment numbers is justified by new or improved infrastructure, such as transport corridors, business precincts, universities or hospitals.

Make sure you purchase from a reputable builder and take the time to research their previous projects. Do they use quality contractors? Do they deliver projects on time? Make a point of visiting some of their projects so you can assess the finished product first-hand.

• Investments like this are big decisions, so investing in the right professionals to have onside before you commit is money well spent. Ensure you get professional legal advice on any contract before you sign it and that you speak with your financial advisor or tax professional to make sure you’ve got the right advice from day one.
• Make sure your deposit will be refunded if the project doesn’t go ahead by a certain date.
• Make sure the contract contains as much detail as possible about the finished product.
• Be clear on what finishes and fixtures you can customise.
• Find out if you can on-sell during construction in case your circumstances change.
• Ask if you can inspect the site during construction.
• Talk to your mortgage broker about all of your finance options.

We’re all unique when it comes to our finances and borrowing needs. Get an estimate on how much you may be able to borrow (subject to satisfying legal and lender requirements) with our selection of calculators. Or contact us today, we can help with calculations based on your circumstances.

Decide on the features you are after, whether you want to repay your loan off early, offset your interest or have certainty of repayments. Make note of what you are looking for and then talk to us today. We have access to over 40 lenders Australia wide so we can help you find the right lender to suit your requirements.

How much do I need for a deposit?

Usually between 5% – 10% of the value of a property, which you pay when signing a Contract of Sale. You also may be able to borrow against the equity in your existing home or an investment property.

Go to our Repayment Calculator for an estimate.  By entering in the loan amount you are looking to borrow along with an estimated interest rate, you can easily work out what your loan repayments will be.

Most lenders offer flexible repayment options to suit your pay cycle. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and time off your loan.

• A current Passport or Birth Certificate
• Driver’s Licence. (Please note if these documents are in your maiden name, you will also need to provide a copy of your Marriage Certificate.)
• Other documents that will be useful: a Medicare card, Credit card, ATM/Debit card, Council Rates Notice, Pensioner Concession card, Health Care card, Tertiary Student ID card.

• The two most recent payslips from your employer. (Ideally these will show the company name, number of payslip and year-to-date income figure).
• The most recent Group Certificate from your employer.

If self employed:

• The last two year’s personal and business tax returns and ATO assessments.
• Other income details

You may also need:

• Rental income statements or bank accounts showing rental income for any investment properties
• Proof of share dividends or interest earned
• Centrelink letter confirming family tax benefits
• Centrelink letter confirming permanent government pensions
• Private pension group certificate or statement
• Proof of any other regular, ongoing income.

• Documentation on your existing loan including the date the loan commenced, loan period and any financial penalty payable if you exit the loan early
• Statements for the last six months for any existing home loans and personal loans
• The most recent Council Rates Notice and building insurance policy on the property or properties being offered as security.
• Credit cards
  • If you have credit card debt, statements for the last six months.
  • If you don’t owe anything on your credit card, the most recent statement.

• Statements for the last six months for any existing home loans or personal loans
• Your most recent credit card statement
• Copy of the Contract of Sale for the property you’re buying
• Statements for the last six months to show your savings/investment history. (This could include share certificates, savings account statements, term deposit statements, etc.)
• If other funds are being used for the purchase, evidence showing where the funds are held.
• If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.

• Statement for your First Home Saver Account, if you have one.
• Statements for the last six months to show your savings/investment history. This could include share certificates, term deposit statements, etc.
• If other funds are being used for the purchase, evidence showing where the funds are held.
• If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.
• Your most recent credit card statement.
• Copy of the Contract of Sale for the property being purchased.

If you already have investment property/ies:

• Evidence of income such as rental statements.
• A copy of the tenancy lease.
• A Council Rates Notice.
• A letter from a property manager indicating likely rent for the new property.
• Statements for the last six months to show your savings/investment history. This could include share certificates, term deposit statements, etc.
• If other funds are being used for the purchase, evidence showing where the funds are held.
• If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.
• Your most recent credit card statement.
• Copy of the Contract of Sale for the property being purchased.

• A copy of a valid builder’s fixed price tender, including all specifications.
• A copy of Council approved plans.
• Statements for the last six months to show your savings/investment history. This could include share certificates, term deposit statements, etc.
• If other funds are being used for the purchase, evidence showing where the funds are held.
• If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.
• Your most recent credit card statement.
• Copy of the Contract of Sale for the property being purchased.

Applying for a home loan can be a daunting task, even for the experienced home buyer. So, it’s a good idea to have a general understanding of what to expect during the loan application process.

Standard variable loans are the most popular home loan in Australia. Interest rates go up or down over the life of the loan depending on the official rate set by the Reserve Bank of Australia and funding costs and the individual decisions of each lender. Your regular repayments generally pay off both the interest and some of the principal.

You may also be able to choose a basic variable loan, which offers a discounted interest rate but has fewer loan features, such as a redraw facility and repayment flexibility.

The interest rate is fixed for a certain period, usually the first one to five years of the loan. This means your regular repayments stay the same regardless of changes in interest rates. At the end of the fixed period you can decide whether to fix the rate again, at whatever rate lenders are offering, or move to a variable loan.

Your loan amount is split, so one part is variable, and the other is fixed. You decide on the proportion of variable and fixed. You enjoy some of the flexibility of a variable loan along with some of the certainty of a fixed rate loan.

You repay only the interest on the amount borrowed usually for the first one to five years of the loan, although some lenders offer longer terms. Because you’re not also paying off the principal, your monthly repayments are lower. At the end of the interest-only period, you begin to pay off both interest and principal. These loans are especially popular with investors who plan to pay off the principal when the property is sold. This strategy is usually reliant on the property having achieved capital growth before it is sold.

You can pay into and withdraw from your home loan every month, so long as you keep up the regular required repayments. Many people choose to have their salary paid into their line of credit account. This type of loan is good for people who want maximum flexibility in their access to funds.

Originally designed for first-home buyers, but now available more widely, introductory loans offer a discounted interest rate for the first 6 to 12 months, before the rate reverts to the usual variable interest rate.

Popular with self-employed people, these loans require less documentation or proof of income than most, but often carry higher interest rates or require a larger deposit because of the perceived higher lender risk. In most cases you will be financially better off getting together full documentation for another type of loan. But if this isn’t possible, a low doc loan may be your best opportunity to borrow money.