Pre-approvals are surging. Here’s how to make sure you’re actually ready.
Alternative SEO titles:
- Home loan pre-approvals are up across Australia. What that means if you’re trying to buy right now
- First home buyer loans are recovering fast. Here’s how to get yours right
- The First Home Guarantee is driving a rush to buy. Here’s how to stay calm and buy smart
Tags: home loan pre-approval Australia, first home buyer loans 2026, First Home Guarantee scheme Australia, buying first home Australia 2026, mortgage pre-approval tips Australia
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Something is shifting in the Australian property market right now. Pre-approval applications are up 12% on last year. First home buyer loans posted their strongest quarterly growth in two years in the last quarter of 2025, recovering after four consecutive quarters of decline. And since the First Home Guarantee expanded in October to remove income caps, demand has jumped 16% at approved lenders.
That’s a lot of women deciding that this is the year they stop thinking about it and actually do something about it.
If that’s you too, here’s what you actually need to know right now.
A busy market is not a reason to panic. It’s a reason to prepare.
The headlines can make it feel like everyone else is already three steps ahead and you’re going to miss the boat if you don’t act right now. That’s not what’s happening.
What is happening is that more first home buyers than ever are getting their finances in order, understanding what they can borrow, and getting clear on their next steps. That’s a good thing. And it’s exactly what we want you to do too, on your timeline, without the pressure.
So why is everyone suddenly getting pre-approved?
A few things landed at the same time.
The October 2025 expansion of the First Home Guarantee scheme was a big deal. It removed income caps, opened up eligibility to way more buyers, and let people get into the market with just a 5% deposit without paying Lenders Mortgage Insurance. In the four months after it launched, 22,921 guarantees were issued, a 75% jump on the previous four months.
The average first home buyer loan is now $607,500, up 8.5% in a single quarter. Loans rose across every state, with New South Wales and Western Australia leading the charge.
Basically, a lot of people who had been sitting on the fence got a clearer runway and decided to go for it. And some of them are now moving fast.
What you need to know about pre-approval before you apply
Pre-approval is genuinely useful. It tells you what you can borrow, so when you find something you love, you can move on it with confidence instead of scrambling to get finance sorted while someone else snaps it up.
But there are a few things worth knowing before you rush in.
They expire. Most pre-approvals last around three to six months. If yours runs out before you’ve found a place, you’ll need to reapply, and the amount could change depending on where rates and lending rules are sitting at that point. Make a note of the date so it doesn’t sneak up on you.
Every application shows up on your credit file. Applying too early, letting it lapse, then reapplying again can start to look a bit messy to lenders. It won’t necessarily stop you from getting a loan, but it’s worth applying when you’re genuinely ready to start looking, not just curious about the number.
The amount you’re approved for is not the amount you should spend. Lenders calculate the maximum they’re willing to lend you. That’s very different from what you’ll comfortably repay if life throws you a curveball or rates move again. Know the difference between your maximum borrowing capacity and your comfortable borrowing capacity. They are often not the same number.
The 5% deposit is great, but be clear what it means
The expanded First Home Guarantee is a genuine opportunity for a lot of people, and we’re not here to talk you into (or out of) using it. But a smaller deposit means a bigger loan, higher monthly repayments, and less buffer if things shift.
So before you go in, ask yourself: if rates went up another 0.25% or 0.5%, could I still cover my repayments and have a life? If yes, great. If it would be a stretch, it might be worth either looking at a lower purchase price or giving your deposit a few more months to grow.
Not because you can’t do it. Just because buying well matters more than buying fast. Also a lower deposit means a bigger loan and higher fees, so its important to crunch and understand your numbers over the lifetime of the loan.
How to actually get ready (without losing your mind)
Get honest about your real numbers. Not the hopeful version, the actual one. What are you earning, what’s going out, what have you got saved, and what would stamp duty, legal fees and moving costs add on top? Penny’s Budget and Costs Calculator can help you map this out so there are no nasty surprises.
Think about your comfort zone, not your ceiling. The question to ask isn’t “how much will the bank lend me?” It’s “what weekly repayment lets me sleep at night and still have a life?” That number might be quite different from your pre-approval amount, and that’s completely okay.
Get your support team sorted before you need them. A mortgage broker, a conveyancer, a financial adviser who actually gets first home buyers. These are not people to find in a panic after you’ve fallen in love with a property. Get them in your corner now so you can move confidently when the right place comes up. Penny can connect you with vetted professionals who work with first home buyers every day.
Don’t let the noise decide for you. A recovering market is a good sign. It’s not a deadline. The right time to buy is when your finances are solid, your support team is in place, and you actually feel clear. Not when a headline makes you feel like you’re already behind.
Ready to go from thinking about it to actually doing something about it?
We’ve built a 6-week accelerator program for exactly this moment. It takes you from “I don’t even know where to start” to genuinely buy-ready, with the Penny team and our panel of experts walking alongside you the whole way.
We help you get clear on your finances, work through your personalised home buying guide, connect with trusted professionals, and stay accountable so the whole thing actually happens.
Because getting the keys to your first home is one of the best feelings. And you deserve to get there with confidence.
Sources: Australian Bureau of Statistics Lending Indicators, December Quarter 2025 and March Quarter 2026. Equifax First Home Buyer Demand Analysis, May 2026. Commonwealth Bank pre-approval data, 2025. Housing Australia First Home Guarantee scheme data, 2025 to 2026. Mortgage Professional Australia, May 2026.
This post is general information only and not financial advice. Please speak with a licensed mortgage broker and financial adviser before making any property decisions.