If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $350K in NSW with an LVR of 80% of the property value.
Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products.
*Comparison rate based on loan amount of $150,000 and a term of 25 years. Read the Comparison Rate Warning
When can you change your mind about buying a house?
Prospective buyers can change their mind about buying a house any time before settlement – but the consequences of this are different depending on when you make the choice to pull out. If you back out of a property purchase during the cooling-off period, the financial penalty varies; if you back out once the contract is unconditional, the contract will specify the financial penalties.
Once you have exchanged contracts and paid a deposit on a property, you have a legal right over that property, called a financial interest. At this point, there is a brief cooling-off period (in most states and territories) during which you can get out of the contract if you provide written notice, but you would not get your whole deposit back in some states and territories. There is no cooling-off period if you buy at auction.
The usual cooling-off period is a different length in each state and territory:
- NSW: 5 business days (Fair Trading NSW). Buyer forfeits 0.25% of the purchase price to the seller.
- VIC: 3 business days (Consumer Affairs Victoria). Buyer must pay 0.2% of the purchase price to the seller.
- QLD: 5 business days (Queensland Government). Seller may keep 0.25% of the purchase price from the deposit paid by the buyer.
- SA: 2 business days (Department of Premier and Cabinet SA). Any deposit paid that was over $100 will be refunded in full, but the buyer forfeits any holding deposit.
- WA: No cooling-off period applies unless contract specifies a cooling-off period (Department of Commerce WA).
- ACT: 5 business days (Conveyancing Canberra). Buyer forfeits 0.25% of the purchase price to the seller.
- NT: 4 business days (Northern Territory Government). Both purchase deposit and holding deposit will be refunded to the buyer.
- TAS: No cooling-off period applies to any sale of property in Tasmania (Consumer Affairs and Fair Trading Tasmania).
After the cooling-off period, the contract for sale becomes unconditional and you will no longer be able to back out of the contract without significant financial penalties. The contract for sale will outline what the buyer is required to pay the seller as compensation for pulling out of an unconditional contract. These costs may include paying your own and the seller’s legal or conveyancing fees, and your own and the seller’s building valuation and inspection fees.
Any buyer considering backing out of a property purchase should obtain legal advice before breaking a legally binding contract.
Backing out of a property purchase for financial reasons
When possible, borrowers should obtain home loan pre-approval (known as approval in principle) so that you will not have to back out of a property sale due to financial reasons. Borrowers should not sign an unconditional contract (e.g. at auction) or waive their right to a cooling-off period if they have any doubts about getting finance for a property purchase.
If your finance has been rejected and you have already paid a deposit and exchanged contracts on a property, conveyancing experts recommend that you seek immediate legal advice.
Having your home loan application rejected can damage your credit rating and make it less likely that you would be approved for a future loan.
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