Updated October 2026 by Albert Waldron, Awesome Lending Solutions. This article first appeared on awesomelendingsolutions.com.au.
Before you start going to open homes, it's worth asking: am I financially fit to buy? Being "financially fit" doesn't mean being rich. It means your finances are in good enough shape that a lender will say yes, and that you can comfortably manage the loan. Here's a simple checklist.
1. Be clear on what you can afford
Lenders look at your income, expenses and debts, and test whether you could afford repayments if your rate rose by 3%. With the cash rate at 4.60% after four rises in 2026, borrowing power is lower for many buyers than a year ago. Get a realistic figure from a broker before you set your budget.
2. Review your finances
- Income: lenders like stable income. Some need you to be past probation in a new job.
- Debts: credit cards, car loans, personal loans, HECS-HELP and Buy Now Pay Later all reduce borrowing power. Lenders count your full credit card limit, not just the balance.
- Credit history: check your credit report for free and fix any errors.
3. Build a realistic budget
Track your spending for a month. Lenders review your bank statements, so regular saving and sensible spending help. Cancel subscriptions you don't use and cut back on takeaway and impulse buys in the months before you apply.
4. Save your deposit and costs
How much you need depends on the price and any schemes you use:
- With the 5% Deposit Scheme, you may only need 5% and pay no LMI. There have been no income caps since October 2025.
- With Help to Buy, you may need just 2%. Income caps apply.
- In NSW, first home buyers pay no stamp duty on homes up to $800,000.
Don't forget conveyancing, inspections and moving costs.
5. Show genuine savings
Many lenders like to see savings built up over at least three months. Regular deposits into a savings account show good money habits.
6. Keep a buffer
Try to keep some savings aside after you buy, ideally in an offset account, for repairs, rate rises or a change in income.
Your financial fitness checklist
- I know my realistic borrowing power
- My credit report is clean and accurate
- I've reduced or closed debts I don't need
- I've tracked my spending and have a budget
- I have my deposit and buying costs saved
- I'll still have a buffer after I buy
An example
Josh earns $90,000 and wants to buy a $650,000 unit. He reduces his credit card limit from $10,000 to $2,000, closes two Buy Now Pay Later accounts and saves $1,000 a fortnight for six months. His broker confirms he qualifies for the 5% Deposit Scheme and the NSW stamp duty exemption. He buys with a 5% deposit, no LMI and no stamp duty, and keeps a $10,000 buffer in his offset.
Frequently asked questions
How long does it take to get financially fit?
Often three to twelve months, depending on your starting point.
Will a broker check my credit?
Only with your permission, and usually only when you're ready to apply.
Can I buy with a small deposit?
Yes. Government schemes and guarantor loans can help eligible buyers buy with 2% to 5%.
Talk to Awesome Lending Solutions
Want to know how financially fit you are right now? We can review your situation and give you a clear plan, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.
This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.
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