Pre-approval to home ownership
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Scheme figures verified against firsthomebuyers.gov.au and Revenue NSW.
This guide walks the whole journey, from getting pre-approved to collecting your keys on settlement day. If you are earlier in the process, our first home buyer tips guide covers deposits, schemes and stamp duty first.
The short version: From serious searching to keys, allow 3 to 6 months. Pre-approval takes 3 to 10 days and lasts around 3 months. The standard NSW settlement period is 42 days. Private treaty gives you a 5 business day cooling off period, auction gives you none. Budget 3% to 5% of the purchase price for costs on top of your deposit.
How long does it take to buy your first home in NSW?
From serious property searching to settlement, allow 3 to 6 months. Saving your deposit sits outside that window and takes as long as it takes. Buying off the plan extends settlement to 12 to 24 months.
Phase 1: Financial preparation
Assess your finances, work out your borrowing capacity, build your deposit and check which schemes you qualify for. Runs as long as saving takes.
Phase 2: Pre-approval (3 to 10 days)
A lender reviews your position and indicates what it will lend. Your pre-approval then holds for around 3 months.
Phase 3: Property search (1 to 3 months)
Inspections, suburb research, offers and negotiation, guided by our property selection guide.
Phase 4: Offer and exchange (1 to 3 weeks)
Contract review, building and pest inspection, exchange, and converting pre-approval into unconditional approval after the bank valuation.
Phase 5: Settlement (42 days standard)
Final inspection, settlement preparation, funds transfer and keys. The 42 day period is convention in NSW and is negotiable.
Phase 1: How do you prepare financially?
Gather your income and expense records, check your credit file, total your existing debts, and confirm your deposit. Lenders assess your income against your living costs and commitments, so both sides of that equation matter.
Assessing your position
You need recent payslips, tax returns and employment details for income verification. Review your credit history and fix anything that looks wrong. List every existing debt including loans, credit cards and buy now pay later. Document your monthly spending so you know your real living expenses, and total the funds available for your deposit and upfront costs.
Our budgeting guide helps you organise this, and the mortgage repayment calculator models what repayments look like at different price points.
How much can you borrow?
Borrowing capacity starts with your gross annual income, including bonuses, overtime and any rental income. Lenders then deduct living costs and existing debt repayments. Deposit size, dependants and employment type all move the number. Your Loan to Value Ratio matters here too, because it decides whether Lenders Mortgage Insurance applies. The property deposit calculator shows how deposit size changes the maximum price you can target.
For context on what you are aiming at, the median Sydney house price sat at roughly $1.65 million in early 2026 according to CoreLogic, though unit and outer suburb prices sit well below that.
Building your deposit
The Australian Government 5% Deposit Scheme lets you buy with 5% and no LMI, or 2% if you are a single parent. There are no income caps, no limit on places and a $1.5 million price cap for Sydney. Help to Buy also starts at 2%, but income limits apply and you cannot use both schemes. Without a scheme, expect 10% to 15% with LMI, or 20% to avoid it.
The First Home Super Saver Scheme lets you release voluntary super contributions for a first home, capped at $15,000 a year and $50,000 lifetime. Request your determination from the ATO before you sign a contract. The released amount is taxed, so speak with your accountant first.
What counts as genuine savings?
Most lenders want to see 5% of the purchase price held in your own account for at least 3 months. That is 5% of the price, not 5% of your deposit.
The test usually applies once you are borrowing above 85% to 90% of the property value, which is where most first home buyers sit. Below that, lenders scrutinise the source of funds far less. A gift from family can still form part of your deposit, but most lenders will not count it as genuine savings.
If you do not have three months of savings history: several lenders accept 12 months or more of on-time rental payments as an equivalent, on the basis that a reliable tenant has already shown they can service a debt. Worth asking about if your deposit is real but the holding period is not there yet.
Phase 2: What is pre-approval and how do you get it?
Pre-approval is a lender agreeing in principle to lend you a specific amount after reviewing your finances. It takes 3 to 10 days, holds for around 3 months, and turns you from a browser into a buyer agents take seriously.
Making an offer without it usually means losing the property to someone who is ready to proceed. It also sets a hard budget, which stops you falling for something out of reach.
What documents do you need?
If you are employed: your last 2 to 3 payslips, most recent tax return and notice of assessment, employment contract or letter, 3 to 6 months of bank statements, photo identification, and a list of your assets and liabilities.
If you are self employed: the last 2 years of tax returns and notices of assessment, financial statements including profit and loss and balance sheet, ABN and business registration details, 6 months of business bank statements, and an accountant's letter if you have one.
Broker or straight to a bank?
Going direct limits you to one lender's products and one credit policy. If that lender says no, or prices poorly, you start again. You also handle the paperwork and the follow up yourself, and you get no comparison across the schemes.
A broker compares 35+ lenders and hundreds of products, works out which credit policy actually fits your situation, handles the application, and checks every scheme you qualify for rather than the one you happened to read about. The service costs you nothing because the lender pays, not you.
One deadline to know: under the 5% Deposit Scheme you have 90 days from pre-approval to find a home and sign a contract of sale. Check your postcode against the government price cap tool before you start searching.
Get pre-approved
We help first home buyers across Sydney and NSW line up the right pre-approval, with access to 35+ lenders at $0 cost to you.
Phase 3: How do you search and do due diligence?
Set your criteria before you inspect anything, understand which of the three purchase methods applies, and complete building, strata and contract checks before you commit. In a competitive market, preparation is what lets you move fast without taking on risk.
Setting your criteria
Decide on property type first. A freestanding house gives you land and renovation freedom at a higher entry cost. A strata apartment or townhouse costs less to get into but brings strata fees and restrictions. Vacant land means building, and a construction loan that draws down in stages.
Then location. Proximity to work, schools, family and transport, separated honestly into must-have and nice-to-have. Our guide on location, condition and vibes covers how to judge a property beyond price and photos.
Competing in a hot market
If you keep losing properties, the fix is usually preparation rather than budget. Have pre-approval in hand, know your maximum and hold to it, and have your conveyancer ready to review a contract at short notice. Widening your search to less contested suburbs, or looking at off the plan stock where there is less competition on the day, both help.
The three ways to buy in NSW
Private treaty is the most first home buyer friendly. You negotiate through the agent, you can make the contract conditional on finance and inspection, and you get a 5 business day cooling off period.
Auction has no cooling off period and no finance condition. The contract is binding when the hammer falls, so every check has to be done beforehand and you need a 10% deposit ready on the day.
Off the plan means buying before construction finishes. Settlement stretches to 12 to 24 months, new builds can qualify for the First Home Owner Grant, and the risks are value movement during construction and delays.
Due diligence before you offer
A building and pest inspection at $400 to $800 is the one that catches structural problems. For strata, order a strata report to check the scheme's finances and by-laws. Have a conveyancer or solicitor review the contract before you sign anything. Check council for zoning and development applications nearby. And understand how banks value properties, because a valuation below your price becomes your problem, not the vendor's.
Phase 4: What happens when you make an offer?
You negotiate, exchange contracts and pay a deposit, then satisfy your conditions while the lender converts pre-approval into unconditional approval. In NSW the initial deposit at exchange is commonly 0.25%, with the balance to 10% due within the cooling off period or at exchange by agreement.
Negotiating
Research comparable sales so you know what similar properties actually sold for. Understand whether the vendor is motivated. Open at a reasonable number, because low-balling ends negotiations before they start. Include your conditions for finance and building inspection, and get every term in writing.
Exchange of contracts
Once your offer is accepted, the vendor's solicitor prepares the contract and both parties sign identical copies. You pay the deposit and the 5 business day cooling off period begins on a private treaty purchase. You then satisfy your conditions, completing the building inspection and finalising loan approval within the agreed timeframe. When the conditions are met the contract becomes unconditional and you are committed.
From pre-approval to unconditional approval
Your lender orders a property valuation, reviews the contract of sale, re-verifies your employment and finances, runs final credit checks and issues formal approval. Our property purchase and valuation guide covers what lenders look at.
If the valuation comes in low
This is the most common thing that derails a purchase at this stage. If the bank values the property below your contract price, the shortfall has to come from you. You can go back to the vendor and renegotiate, cover the gap with additional deposit, or ask your broker to try a lender that uses a different valuer. Understanding valuations before you offer is how you avoid the problem in the first place.
Do not move your money around now. No job changes, no new debts, no big purchases, no new credit applications until settlement is done. Lenders re-verify before funding, and a change to your profile can undo an approval you already have. Even a positive job change means fresh paperwork and delay.
Phase 5: What happens at settlement?
Settlement is when ownership legally transfers and your lender releases the funds. The standard NSW settlement period is 42 days from exchange, though it is negotiable. Your solicitor and lender handle most of it.
Preparing
Arrange building and contents insurance before settlement, not after. Book your final inspection, usually 1 to 2 days beforehand. Organise electricity, gas, water and internet connections. Book removalists. And stay in contact with your solicitor and broker so nothing sits waiting on a signature.
The final inspection
This is your last chance to confirm the property is in the agreed condition. Check that every fixture and fitting included in the sale is still there, that agreed repairs are done, and that appliances work. If something is wrong, document it and call your conveyancer immediately, not after settlement.
Settlement day
Final checks and documents are completed in the morning. Your lender releases the funds to the vendor's solicitor. Title transfers into your name. The agent releases your keys once settlement is confirmed. The whole thing usually takes a few hours and you do not need to be present.
What does it cost to buy your first home in NSW?
Beyond your deposit, allow 3% to 5% of the purchase price for total buying costs. For an eligible first home buyer under $800,000, stamp duty is $0, which removes the largest single line.
| Cost | Typical amount | When you pay it |
|---|---|---|
| Deposit at exchange | 0.25% to 10% of price | At exchange of contracts |
| Stamp duty | $0 up to $800,000 for eligible first home buyers, reduced to $1,000,000 | At settlement |
| Conveyancing or legal | $1,000 to $3,000 | Across the process |
| Building and pest inspection | $400 to $800 | Before exchange |
| Strata report (if applicable) | Varies by provider | Before exchange |
| Lender and government fees | Varies by lender | At settlement |
| Lenders Mortgage Insurance | $0 under a scheme, otherwise $10,000 to $40,000+ | At settlement, often added to the loan |
| Insurance and moving | Varies | Before and after settlement |
Indicative ranges current at July 2026. Confirm your own figures with your lender, conveyancer and Revenue NSW.
What NSW benefits can first home buyers use?
Eligible NSW first home buyers pay $0 stamp duty up to $800,000, may receive a $10,000 grant on a new home under $600,000, and can use a federal deposit scheme on top. State and federal support can be combined.
Stamp duty
The First Home Buyers Assistance Scheme gives a full exemption up to $800,000 and a reduced rate from $800,001 to $999,999. At $1,000,000 and above there is no relief. On an $800,000 purchase that is more than $30,000 saved. You need to move in within 12 months and live there for 12 continuous months. Our NSW stamp duty guide has the detail.
First Home Owner Grant
The NSW First Home Owner Grant is $10,000 for new homes only. A completed new home must be under $600,000. Land plus a building contract must be under $750,000 combined. Established properties do not qualify.
Deposit schemes
The Australian Government 5% Deposit Scheme, administered by Housing Australia, has no income caps and no limit on places. You do not have to be a first home buyer either, the test is that you have not owned property or land in Australia in the last 10 years. Help to Buy takes an equity share of up to 40% on a new home or 30% on an existing one, with income limits of $103,000 single and $165,000 joint, capped at 10,000 places a year. Current thresholds are on the government Help to Buy page. You choose one scheme or the other, not both. Our guide to the benefits and risks of a low deposit purchase weighs them up.
Ready to start?
We guide first home buyers through every stage, from pre-approval to settlement, across Sydney and NSW.
Email: hello@buyvest.com.au
Frequently asked questions
What is the first step in buying my first home?
Assess your financial position and work out your borrowing capacity. Review your income, expenses, existing debts and savings, then check which government schemes you qualify for, because scheme eligibility changes what price range is realistic. From there you can secure a pre-approval.
How long does the home buying process take in NSW?
From serious searching to keys, allow 3 to 6 months. Pre-approval takes 3 to 10 days, the property search runs 1 to 3 months, offer through to exchange takes 1 to 3 weeks, and the standard NSW settlement period is 42 days. Buying off the plan extends settlement to 12 to 24 months. Saving your deposit sits outside this timeline.
How much genuine savings do I need?
Most lenders want to see 5% of the purchase price held in your own account for at least 3 months, not 5% of your deposit. The test generally applies once you are borrowing above 85% to 90% of the property value. A family gift can form part of your deposit but usually will not count as genuine savings. Some lenders accept 12 months or more of on-time rent as an equivalent.
What is the difference between pre-approval and unconditional approval?
Pre-approval is a lender agreeing in principle to lend a specific amount based on your finances, and it holds for around 3 months. Unconditional approval comes after you find a property and the lender completes its valuation, contract review and final checks. Unconditional approval is the confirmation your loan will settle.
How much deposit do I pay when contracts are exchanged?
In NSW the initial deposit on a private treaty purchase is commonly 0.25% of the price at exchange, with the balance to 10% due within the cooling off period or at exchange by agreement. At auction you need the full 10% available on the day, because there is no cooling off period.
Can I buy at auction as a first home buyer?
Yes, with more preparation. There is no cooling off period and no finance condition at auction, so you need pre-approval, all inspections completed, your contract reviewed, and a 10% deposit ready on the day. Set a maximum before you go and hold to it.
What happens if my loan is not approved after I sign contracts?
On a private treaty purchase with a finance condition, you can withdraw without penalty if the loan is not approved within the specified timeframe. That is why the finance condition matters. At auction there is no finance condition and no cooling off period, so the risk sits entirely with you.
How much does it cost to use a mortgage broker?
Nothing. Our service is free to you because the lender pays us when your loan settles. You get access to 35+ lenders, help through the whole process, and a check across every scheme you qualify for. Book a free consultation to get started.
First home buyer resources and calculators
Our first home buyer tips guide covers deposits, schemes and stamp duty. Pathways to home ownership maps every route in. Choosing the right finance compares loan types and features, and building your first home covers the construction loan process.
Calculators: property deposit, home equity and mortgage repayment.
Learn more about our team, or see our service areas across 220+ Sydney suburbs.
Related resources
First home buyer tips | Deposit options | 5% Deposit Scheme guide | NSW stamp duty | Choosing the right finance | Guarantor loans | Buying your first home
Service areas: 220+ suburbs across Sydney including Ryde | Parramatta | Baulkham Hills | Gladesville | Penrith | Chatswood | Castle Hill | Epping | Hornsby | Blacktown | Bankstown | Hurstville | Sutherland | Manly | Bondi | Sydney CBD and more
This article is general information only and does not take your personal circumstances into account. Scheme rules, thresholds, price caps and lender policies change, so confirm current settings before relying on them. For tax questions, speak with your accountant or financial adviser. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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Important stuff:
Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
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