The Pros and Cons of Buying Off-the-Plan

Why It Can Be a Smart Move for First Home Buyers

Buying your first home is an exciting milestone—and if you’ve been researching your options, you’ve likely come across the idea of buying off-the-plan. While the concept might sound unfamiliar or even risky to some, it can be a fantastic way for first home buyers to break into the property market with greater affordability, flexibility, and potential upside.

At Ascot Mortgage, we help many first home buyers navigate the off-the-plan journey with confidence. Here’s what you need to know:

The Pros of Buying Off-the-Plan

1. Time to Save More Before You Settle

One of the biggest advantages of buying off-the-plan is the delayed settlement. You pay a deposit upfront (usually 5–10%) and then have anywhere from 6 to 18 months—or even longer—before the property is built and the loan is required.

Why this helps:

• More time to save additional funds

• Improve your borrowing capacity

• Get your finances in better shape for settlement

2. Stamp Duty Savings

In many states, stamp duty is calculated on the land value at contract, not the finished home. For eligible first home buyers, this can mean huge savings—or even a full exemption.

Victoria Example:Buy a $650,000 off-the-plan townhouse, and you may only pay stamp duty on the land portion, potentially saving tens of thousands.

3. First Home Buyer Incentives

Buying off-the-plan often ticks all the boxes for first home buyer grants and the First Home Guarantee scheme (buy with as little as 5% deposit, no LMI). These incentives can make off-the-plan a very cost-effective entry into the market.

4. Locked-In Price

When you sign the contract, your price is fixed—regardless of how much the market changes by the time the build is complete. If the property increases in value during construction (as it often does in growth areas), you’ve effectively built equity before moving in.

5. New Home, Modern Features

You’ll be the first to live in the home, which means:

• Brand new appliances and finishes

• Warranties on structure and inclusions

• Lower maintenance for the first few years

The Cons to Be Aware Of

While off-the-plan offers great benefits, it’s important to understand the risks and prepare accordingly.

1. Valuation Risk

If the property’s value drops between signing and settlement, your lender may value it lower—meaning you need a higher deposit at settlement. This is why working with a mortgage broker is key—we help assess location, demand, and price growth potential before you commit.

2. Build Delays

Construction delays can happen. While frustrating, many contracts include sunset clauses that outline timeframes and protections for both buyer and developer. Still, it’s worth having a flexible plan.

3. Changes to Interest Rates

If rates rise between now and settlement, your loan repayments may be higher than expected. That’s why we offer Home Buying Plans to help forecast repayments and assess affordability across different lenders.

Is Off-the-Plan Right for You?

If you're a first home buyer:

• You want time to save

• You want to lock in today’s prices

• You want a brand-new, low-maintenance home

• You're looking for a smart long-term investment

…then buying off-the-plan may be a great fit.

Reach out to us today to discuss your first home buying strategy or request a complimentary Home Buying Plan.

Let’s make your dream of owning a home a reality—with less stress and more strategy.

Book your free consultation today.