Key takeaways:
Your property plans may evolve. Spending time in the market can give buyers a clearer picture of what their budget may buy and which priorities matter most.
Not every compromise is equal. Cosmetic features may be easier to change than factors such as location, property size or proximity to amenities.
Borrowing power isn't a spending target. What a buyer may be able to borrow and what they feel comfortable repaying can be different.
Keep the finance conversation going. An Aussie Broker can help buyers understand how changing their location, property type or purchase price may affect potential repayments and lending options, depending on their circumstances.
When Caitlin O’Keefe and her partner, Zachary (Zach) Milgate, decided to buy their first home in Sydney, one of their first challenges was understanding their financial position and what their budget might buy.
Buying in Sydney felt daunting and, before speaking with their mortgage broker, Caitlin said they weren't sure where to start.
That started to change when they sat down with Aussie Broker Vicki Fraser.
“We weren't really sure what we were able to afford until we sat down with Vicki and really went through what our goals were,” Caitlin said.
With a clearer understanding of their financial position, the couple started searching.
For the next six months, they spent weekends inspecting properties across Sydney. Along the way, they encountered homes selling for more than they expected and reconsidered their search strategy several times.
Rather than navigating those changes alone, Caitlin said they returned to Fraser throughout the search to work through what they wanted, where they were looking and what might work within their financial position.
“At some point, we had to take a step back and reassess our strategy a couple of times with our broker,” she said.
Eventually, they narrowed their search to Sydney's eastern suburbs, where they had been renting.
Then they found it: a two-bedroom apartment in an older, smaller block, close to transport and in an area they had initially thought might be out of reach.
Before making an offer ahead of auction, the couple again worked through their financial position with Fraser and considered what the purchase could mean for their repayments.
For Caitlin, reaching the point where they were ready to make an offer wasn’t about sticking with the expectations they had at the start. Over six months, they learned more about what their money could buy, refined what mattered to them and regularly revisited their position with their broker as their search evolved.
Property prices, interest rates and lending conditions can change during a buyer's search, which is why their financial position may be worth revisiting along the way.
Their experience raises a question many buyers may encounter: what happens when your budget, preferred location and ideal property don't immediately line up?
Your property plans may evolve as you search
A property budget can look straightforward on paper. In practice, buyers may get a clearer picture of what it can buy once they start attending inspections and seeing sale results.
For Caitlin and Zach, that happened over several months.
“We were constantly looking at different areas and changing our budget and our approach,” Caitlin said.
As the couple spent more time in the market, Fraser said they developed a clearer picture of what properties were selling for and where they wanted to buy.
When their first pre-approval expired, Fraser revisited their position and arranged a second pre-approval based on their circumstances at the time.
That ongoing contact meant the couple could reassess their finance alongside their property search, rather than relying on the position they had started with several months earlier.
“You’ve got to learn your compromises,” Fraser said.
“Until they go out to the market, they can’t understand their own compromises. Is it location? Is it size? What is the compromise that’s appropriate for them?”
Fraser said understanding what buyers genuinely want from a property is also part of helping them identify any gap between their expectations and financial position.
“I like to start off with understanding what they want,” she said.
Fraser also helped put the numbers involved in buying their first home into context.
One approach Fraser uses is comparing a buyer's current rent with estimated mortgage repayments at different loan sizes to help put the figures into context. Mortgage repayments are only one of the costs buyers may need to consider, alongside expenses such as rates, strata where applicable, insurance and maintenance.
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In Caitlin and Zach’s case, there was borrowing capacity available when their initial pre-approval was arranged, Fraser said. But having access to a certain amount didn’t mean they had to spend it.
“Pre-approval is not a loan. It’s just an agreement that you could. It doesn’t mean you should,” she said.
Pre-approval is generally conditional and does not guarantee final loan approval, which will depend on the lender's requirements and the buyer's circumstances at the time.
For Caitlin, those conversations helped the couple develop a clearer understanding of their finances as their search progressed.
“It was really at that point that we got a much better understanding of our finances,” she said.
What a buyer may be able to borrow and what they feel comfortable repaying can be two different figures. Repayments are also only one consideration when deciding what may be comfortable.
Buyers may want to consider their broader household budget, future plans and how much financial breathing room they would like to retain if their circumstances change.
Working through different affordability scenarios with a broker may help buyers develop a clearer picture of what could suit their circumstances, rather than focusing on borrowing capacity alone.
When the property doesn't fit the budget, something may need to give
Finding the property and location that are right for you can involve balancing three moving parts:
Budget + location + property
If all three don't align, buyers may need to decide which, if any, they're prepared to reconsider.
For Caitlin and Zach, location became clearer as their search progressed. They ultimately focused on the eastern suburbs, where they had been renting, while prioritising an older building, smaller block, two bedrooms and access to transport.
For another buyer, the answer might be a different type of home, another suburb or continuing to save and search rather than changing how much they plan to spend.
Not every property compromise is equal
Aussie Buyer’s Agent Amanda Baldacchino said buyers can start by separating features that may be relatively easy to change from those that are more fundamental to the property.
Cosmetic details such as paint, curtains or carpet, for example, may be easier for some buyers to update over time.
“If it’s in the location and it ticks all the other boxes, are there things that you can do?” Baldacchino said.
You might also be interested in: How to finance your home renovation
Other compromises may require more consideration. If buyers need to remain in a particular location because of schools, work or other commitments, they may instead need to consider whether they would accept fewer bedrooms, a smaller block or a different type of property.
Baldacchino saw this play out with a first-home buyer family whose preferred location was closely tied to their children’s schools and work commitments.
At the beginning of their search, their budget provided some options in surrounding areas, but the family wasn’t comfortable moving further away. As their search continued, changing market conditions meant some of those alternatives also moved beyond what they were looking to spend.
Baldacchino said the experience highlighted the importance of identifying genuine non-negotiables early and regularly reassessing whether a property brief still aligns what is available within a buyer’s budget.
A buyer’s agent can provide market information and an independent buyer-side perspective on properties being considered, including practical factors such as proximity to busy roads, shops or transport.
Your broker can stay part of the conversation while you search
For Caitlin and Zach, getting their finances sorted wasn't a one-off conversation at the beginning of their search.
Fraser remained involved as they attended inspections, reconsidered where they wanted to buy and refined their property brief. By the time they found the eastern suburbs apartment, Caitlin said they had a clearer understanding of their finances and were ready to act.
“You really need to have everything ready when you're putting an offer in,” Caitlin said. “You need to have all your ducks in a row, your finances sorted, and all the paperwork organised.”
For Caitlin and Zach, that meant their finance evolved alongside their property search. Fraser helped establish their position at the beginning, revisited it when their first pre-approval expired and remained involved until they were ready to make an offer.
For other buyers, keeping an Aussie Broker involved may help them understand whether changes in their circumstances, lending conditions or property plans could affect their options.
What should you change: budget, property or location?
There's no universal answer. For some buyers, location may be the priority because of work, family or schools. Others may care more about space or property type and be prepared to look further afield.
When weighing up those trade-offs, it can help to consider which features are likely to be harder to change later. Some of the characteristics commonly considered when assessing a property include:
Location and nearby amenities, including access to schools, transport, shops and employment.
Land and property size, including the size of the dwelling and number of bedrooms and bathrooms.
Condition and functionality, including the property's layout, build quality and overall condition.
Zoning and orientation, which can influence how a property can be used and its appeal.
Renovations and improvements, although their impact on value will depend on the property and local market.
For Caitlin, months of searching helped clarify which of these kinds of considerations mattered most to her and Milgate.
“Buying an apartment we loved in an area we loved didn't feel possible at the start,” she said.
Her experience shows how a property search can evolve as buyers learn more about the market, refine their priorities and develop a clearer understanding of what may be achievable for their circumstances.
Understanding your borrowing position and working through different loan and repayment scenarios with an Aussie Broker may help you understand the financial parameters of your property search.