5 Steps to Buying an Off the Plan Apartment | A Beginner’s Guide

Buying your first off the plan apartment can feel a little daunting, but it needn’t be. We’ll take you through all the financial steps you should take to buy your own home.

Step 1: Save, Save, Save

If you’re serious about financing an off the plan apartment, your lender will want to see evidence of genuine savings.

Often, they will want to see that you’ve managed to squirrel away at least 5% of the purchase price of the property you’re interested in.

And by genuine savings, they mean you’ve got money in the bank that has been there for at least three months, not just a few days before you apply for a home loan.

The message? Save until it hurts. Then save some more.

Amy Focic from Lendi says there are several strategies that would-be buyers could adopt to improve their savings performance, including reviewing your outgoings, drawing up a budget and paying off any existing debts.

“After you’ve come up with your deposit goal, it’s time to go through your spending with a fine-tooth comb. While you don’t have to cut out your non-essential spending entirely, you may find ways to cut back and help you get to your deposit goal,” she said.

“For example, you might ease off on how much you spend on takeaway food or cut back on online shopping for a while. See if you can lower some of your fixed, necessary expenses too.” [1]

Step 2: Pre-Approval

Are you cashed up? Fantastic. Now it’s time to visit your lender to ask for pre-approval (or conditional approval) on a loan. They will look at all of your incomings and your outgoings, your assets, and your liabilities. This is when those savings you’ve worked hard for will earn you those brownie points you need.

In reality, your pre-approval will have expired long before your apartment is finished, but it gives you the comfort of knowing what kind of financial shape you are in and helps you:

  • Become familiar with loan applications
  • Understand how much you can afford to spend on a home
  • Demonstrate to sellers you’re ready to proceed with a purchase [2]

Step 3: The Deposit

Confident that someone will lend you the money for your desired apartment, the time has come to stump up your deposit.

When you’re happy with the plans, inclusions, construction timeline, and purchase price, you’ll pay a nominated deposit, which is usually 10% of the purchase price.

So, for example, if you are buying an apartment with a contract price of $800,000, you’ll need to provide a deposit of $80,000.

Your deposit not only secures your purchase but also locks in the price. If the property market increases during the build, your sale price will remain locked in at the lower rate; this is one of the many benefits of buying off the plan.

Step 4: Don’t change jobs

Now the waiting game begins. But that’s a good thing because while your apartment is being lovingly built, you have more time to save extra cash. Incidentally, that’s another benefit of buying off the plan; those increased savings will come in handy when you go to get final approval.

Because a pre-approval only lasts for three months, yours will have expired by the time your off the plan apartment is ready to settle. Therefore, it’s crucial during that period not to make any major life changes that may affect your capacity to borrow.


  • Change jobs or drop from full-time to part-time, contract or casual work.
  • Have any more children (if possible).
  • Apply for other credit including car loans, personal loans or credit cards. [3]

Step 5: Final Approval

Most lenders will let you apply for a formal loan approval less than three months prior to settlement, when the building is close to completion. But some lenders want the construction completed and a certificate of occupancy prior to settlement.

You will receive your loan on the settlement date.

Congratulations, you just bought your first apartment!

For a full guide on buying an apartment in Sydney, check out our Ultimate Guide to Buying an Apartment in Sydney.


[1] Source: Lendi

[2] NSW Government

[3] Source: Home Loan Experts