Lower property prices could give first home buyers an opportunity to enter the market with a smaller loan and more choice about what they buy.
For buyers who have been saving a deposit, the current market may bring a suitable home closer to reach. The question is whether the purchase price, repayments and ongoing costs work for your situation.
Home loan pre-approval is a useful place to start. It helps you understand how much you may be able to borrow before you commit to a property.
At LoanBrix, our Melbourne-based team helps first home buyers compare loan options, understand their budget and prepare for the application process.
Is Now a Good Time to Buy Your First Home?
It could be, particularly if you have stable income, a deposit and a clear idea of what you can afford.
Cotality’s September 2026 results show national dwelling values fell 1.1% over the month, leaving them 5.2% below their March peak. Melbourne values were down 0.7% for the month and 6.2% over the year. These figures cover houses and units combined. Source: Cotality Home Value Index, October 2026 edition.
For someone buying their first home, this can make it worth revisiting suburbs or property types that previously sat outside their budget.
However, lower prices do not automatically mean affordable repayments. Interest rates, living expenses and the lender’s assessment still affect what you can borrow.
What Is Home Loan Pre-Approval?
Home loan pre-approval, also called conditional approval, is a lender’s indication of what it may lend after reviewing your financial position.
For a first home buyer, it can help with:
- Setting a realistic property search range.
- Understanding what the lender needs from you.
- Identifying conditions that must be met before final approval.
- Showing a seller that you have started arranging finance.
Your borrowing limit is only part of the decision. The amount you feel comfortable repaying may be lower than the lender’s maximum.
Pre-approval has an expiry date and conditions. Final approval still depends on the lender accepting the property and confirming your circumstances. Check your approval letter for its exact terms. Source: NSW Government’s conditional approval guide.
Want to Know Where Your Budget Stands?
Bring your savings balance, income details and preferred purchase range. We can help you understand the next steps towards pre-approval.
What About Interest Rates and Repayments?
The RBA raised its cash rate target to 4.60% on 29 September 2026. This is the central bank’s policy rate; your home loan rate is set by your lender. The RBA also highlighted continuing inflation risks and the possibility of further increases. Source: RBA September meeting minutes.
Before buying, work through repayments at the offered mortgage rate and at a higher rate. Include council rates, insurance, maintenance and owners corporation fees where applicable. Keep some savings available after settlement for unexpected expenses.
Your plan should work with today’s income and costs. Future rate cuts, pay rises or property growth should be treated as uncertain.
For more background on interest rates, borrowing power and household budgets, read our Melbourne mortgage market update. This earlier article provides context; use the dated RBA information above for the rate discussed in this post.
Can You Buy With a Smaller Deposit?
Eligible buyers may be able to use the Australian Government 5% Deposit Scheme to purchase with a minimum 5% deposit and avoid LMI through a participating lender. Property price caps and other eligibility requirements apply, and lender approval is still required.
The guarantee protects the lender. You remain responsible for your mortgage repayments and purchase costs. A smaller deposit also means borrowing a larger share of the home’s value.
LoanBrix can help you check which assistance may apply and what it means for your loan. See our guide to government home buyer schemes for an overview.
If your residency or visa status is part of the application, our article on first home owner grants and home loans for visa holders explains the questions to work through with your broker.
Considering building your first home? Explore our construction loan guide to understand how finance for a new build can differ from buying an established property.
Should You Buy Now or Keep Saving?
The right timing depends on your circumstances. A lower asking price may help, but you still need savings left after settlement and enough room in your budget for repayments.
Before deciding, consider:
- Whether your income and employment are stable.
- How much cash will remain after the deposit and buying costs.
- Whether repayments remain manageable if rates rise.
- How long you expect to live in the property.
- The cost of continuing to rent while building your deposit.
You may be ready to start looking, or you may benefit from more time to save. A finance review can help you work through that decision using your own numbers.
First Home Buyer Pre-Approval FAQs
Should I get pre-approval before looking at homes?
You can research properties first, but pre-approval can help narrow your search to a realistic budget before you make an offer. ASIC’s Moneysmart recommends considering pre-approval when preparing to buy. Read Moneysmart’s home buying guide.
How long does pre-approval last?
Moneysmart gives a general timeframe of three to six months. Your lender’s expiry date and conditions control your approval, so check them before relying on it.
Does pre-approval lock in my interest rate?
Do not assume it does. Ask whether your lender offers a separate rate-lock arrangement, how long it lasts and whether there is a fee.
What if the lender values the home below my offer?
Your finance may need to be reassessed, and you could need more cash to complete the purchase. Discuss the property and potential valuation shortfall with your broker before committing.
Should I wait for property prices to fall further?
Prices could fall further, and the market bottom cannot be identified in advance with certainty. Compare the cost of buying now with continuing to rent and save. Your income security, savings buffer and expected time in the home matter as much as the price.
Speak With LoanBrix Before Buying Your First Home
Thinking about making a move in the current market? LoanBrix can help you understand your borrowing position, compare suitable lenders and prepare for pre-approval.
Call (03) 9807 5169 or book a time with our Melbourne-based team. Bring your deposit amount, income details and preferred suburbs to get the conversation started.
General information only; it does not take account of your individual circumstances. Finance is subject to lender approval, eligibility and terms. Market and scheme information checked 28 October 2026; market figures are for September 2026 and may be revised.
