Is Now a Good Time to Buy a Home? What to Consider

Is now a good time to buy a home? There is no single property-market signal that can answer that question for every buyer. A better starting point is whether you are financially ready, the property suits your needs, and the repayments remain comfortable within your budget.

If you are considering buying your first property, CBM Mortgages can help you understand your borrowing position, likely repayments and suitable home loan options through our First Home Buyer home loan service.

Trying to pick the exact bottom or top of the property market is difficult. Rather than basing a purchase on predictions about where prices or interest rates may move next, focus on what you can control.

Is now a good time to buy a home?

It may be a reasonable time to buy if:

• you have an appropriate deposit and cash buffer;
• your income and employment position support the proposed repayments;
• you understand your borrowing capacity;
• you have allowed for purchasing and ownership costs;
• the property suits your needs for an appropriate period;
• you have researched comparable recent sales; and
• you are not relying on an optimistic prediction about future property prices.

On the other hand, waiting may be sensible if purchasing would exhaust your savings, the repayments would place excessive pressure on your budget, your employment or circumstances are uncertain, or you have not yet completed enough due diligence on the property.

Start with what you can comfortably afford

The maximum amount a lender may approve is not necessarily the amount you should spend.

Moneysmart’s guidance on buying a house recommends considering your income, financial commitments, deposit, savings and credit position when working out what you can afford to borrow.

When establishing a comfortable purchase budget, consider:

• your expected home loan repayment;
• council rates;
• strata levies if buying an apartment;
• home and contents insurance;
• maintenance;
• utilities;
• existing debts;
• normal household expenses; and
• a buffer for unexpected costs.

You can also use our Borrowing Power Calculator as a starting point for understanding how much you may be able to borrow. A calculator is indicative only and is not the same as a lender assessment or loan approval.

A home purchase should ideally leave you with some financial breathing room after settlement.

How do higher interest rates affect borrowing capacity?

Interest rates affect more than the repayment on a home loan. They can also affect how much a lender is prepared to lend.

The Australian Prudential Regulation Authority confirmed in May 2026 that the mortgage serviceability buffer remains 3 percentage points.

APRA’s prudential framework requires lenders to make a prudent assessment of a borrower’s capacity to repay, taking into account matters such as income, expenses and existing debt commitments.

This means borrowing capacity can change as interest rates, income, expenses and lender policies change. If you want to understand the assessment process in more detail, see our guide to how lenders assess home loan applications.

Should I wait for interest rates to fall before buying?

Trying to base a home purchase entirely on future interest-rate predictions can be risky.

If rates fall, borrowing capacity and buyer demand may change. If rates rise, repayments and borrowing capacity may be affected differently. There is also no guarantee that property prices will move in the direction buyers expect at the same time.

A more practical approach is to calculate whether the property is affordable under your current circumstances and consider how your budget would cope if repayments increased.

How much deposit should I have before buying?

The appropriate deposit depends on the purchase price, the amount you can borrow and any first home buyer assistance or other support available to you.

A larger deposit generally means borrowing less and may reduce or avoid costs such as lenders mortgage insurance where LMI would otherwise apply.

Moneysmart’s guidance on saving for a house deposit explains how the size of your deposit affects the amount you need to borrow and your loan-to-value ratio.

For more detail on why deposit size matters, see our guide to how your deposit size can affect your home loan options and rate.

Should I get home loan pre-approval before making an offer?

Pre-approval can help you understand the amount a lender may be prepared to lend based on the information assessed at that time. It can be particularly useful when setting a property-search budget.

But pre-approval is not the same as unconditional or final approval.

The lender may still need to assess:

• the particular property;
• the lender’s valuation;
• your current income and expenses;
• existing debts and credit limits;
• updated supporting documents; and
• whether anything material has changed since pre-approval.

Do not bid or exchange contracts on the assumption that pre-approval guarantees final finance.

How can I avoid FOMO when buying property?

Fear of missing out can encourage buyers to focus on what other people are doing rather than whether a purchase suits their own financial position.

Before attending inspections or auctions, establish:

• your comfortable maximum property budget;
• your must-have property features;
• your nice-to-have features;
• the locations you are prepared to consider;
• your minimum post-settlement cash buffer; and
• the conditions under which you will walk away from a property.

Setting those limits before negotiations begin can make it easier to avoid increasing your budget simply because another buyer is competing for the same property.

What if I am worried about overpaying?

Concern about overpaying is reasonable. The goal should not be to predict tomorrow’s property price perfectly, but to make an informed decision from the evidence available today.

Before making an offer:

• research recent comparable sales;
• consider how long the property has been on the market;
• understand the property’s condition;
• consider obtaining appropriate building, pest or strata reports;
• have the contract reviewed by an appropriately qualified legal professional; and
• understand how the lender’s valuation could affect your finance.

If you are still deciding between different types of property, our guide to buying an apartment or a house as a first home buyer covers some of the financial and practical differences.

So, is now the right time for you to buy?

The right time to buy is less about finding the perfect month in the property cycle and more about whether the purchase works for your circumstances.

Consider your deposit, borrowing capacity, repayment comfort, cash buffer, employment stability and future plans. Then assess the particular property on its own merits.

If those pieces fit together, you can make the decision based on your financial position rather than trying to predict precisely what the property market will do next.

Frequently asked questions

Disclaimer: This article provides general information only and does not constitute personal financial, legal, tax, property or credit advice. Government schemes, lender policies and lending criteria can change. Obtain advice appropriate to your circumstances before applying for finance or buying a property.

Written by Craig McDonald. Updated November 2026.