The Easiest Way to Buy Off-the-Plan in the Snowy Mountains

Buying an off-the-plan property is not the same as buying a house you can walk through tomorrow

You commit to a deposit today, the property might not settle for 18 months or more, and lenders treat the application differently because they are approving a loan for something that does not exist yet. In the Snowy Mountains, where new subdivisions around Jindabyne and Cooma have become more common as regional demand grows, off-the-plan purchases attract first home buyers looking to use grants and concessions while locking in a price early. But the process has specific risks and conditions that do not apply to buying an established home, and the timeline between contract and settlement changes what you need to prepare for.

What Makes an Off-the-Plan Purchase Different for Lenders

Lenders assess off-the-plan purchases using the property's completed value at settlement, not the contract price you signed. That means if construction delays push settlement out or if the market softens in the meantime, the valuation at completion may come in lower than expected. When that happens, the lender may require a larger deposit or refuse to settle at all unless you can make up the difference. A pre-approval given 12 months ago does not bind the lender to proceed if the valuation at settlement does not support the loan amount.

Consider a buyer who secured pre-approval for a two-bedroom unit in Jindabyne at a contract price of $580,000 with a 10% deposit. Construction ran 14 months over schedule, and when the property was ready to settle, the bank's valuation came in at $550,000. The buyer was required to either increase the deposit by $30,000 or walk away from the contract, forfeiting the initial deposit already paid. That scenario is more common with off-the-plan purchases than buyers expect, and it explains why some lenders apply stricter conditions or avoid lending on certain projects entirely.

Sunset Clauses and What Happens When Construction Runs Late

Most off-the-plan contracts include a sunset clause, which sets a final date by which the property must be completed. If the developer cannot complete by that date, either party may have the right to rescind the contract. In some cases developers have used sunset clauses to walk away from contracts in rising markets, returning deposits to buyers but leaving them priced out of the market they originally entered. In falling or stagnant markets, the buyer may face a completed property worth less than the contract price.

In the Snowy Mountains region, where labour and material shortages have delayed several projects around Jindabyne and Berridale, buyers have been caught in settlements that occur 18 to 24 months after the original contract date. During that period, interest rates rose, deposit requirements tightened, and some buyers who qualified at the time of contract no longer met the lender's criteria at settlement. The lender will reassess your application at settlement using current income, current debts, and current lending policy. If your circumstances have changed, the loan may not proceed.

Off-the-Plan Grants and Stamp Duty Concessions in New South Wales

The NSW First Home Owner Grant pays $10,000 for new homes with a purchase price under $600,000, or a land and build contract under $750,000. That grant applies to off-the-plan purchases, provided the contract meets the criteria and the buyer has not previously owned property in Australia. Off-the-plan buyers also qualify for the NSW stamp duty concession, which provides a full exemption on homes valued up to $800,000 and a sliding concession between $800,000 and $1,000,000. Stamp duty is calculated at the time of contract, not settlement, so locking in that concession early can deliver savings if values rise during construction.

Those concessions apply across the Snowy Mountains region, where new townhouse and unit developments are more common than detached house builds in areas close to the ski resorts. A first home buyer purchasing a two-bedroom unit in Jindabyne at $650,000 would receive the $10,000 grant and pay no stamp duty, provided they meet occupancy and eligibility conditions.

How the Australian Government 5% Deposit Scheme Works for Off-the-Plan Buyers

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit without paying lenders mortgage insurance. Off-the-plan purchases are eligible, but the scheme operates through participating lenders and each lender applies its own credit policy on top of the government guarantee. Some lenders on the panel will not approve loans for off-the-plan properties in certain locations or developments they consider higher risk, even if the buyer qualifies for the scheme.

Applications are lodged through the lender, not directly with Housing Australia, and the guarantee applies at settlement. If the valuation at settlement does not support the loan, the guarantee does not force the lender to proceed. Regional price caps under the scheme are higher than metro caps, and properties in the Snowy Mountains fall within those regional limits, but buyers should confirm that the specific development is acceptable to their lender before signing a contract.

Fixed or Variable Rates and Why Most Lenders Will Not Lock a Rate 18 Months Out

When you apply for pre-approval on an off-the-plan purchase, the lender will approve the loan in principle but will not lock in an interest rate until closer to settlement. That means the rate you saw at contract may not be the rate you pay when the property completes. In a rising rate environment, that can increase repayments beyond what you budgeted for, and in some cases it can push your debt-to-income ratio above the lender's threshold, requiring a larger deposit or additional income to proceed.

Some lenders allow buyers to lock a rate three to six months before settlement, but most will not hold a rate for the full construction period. If your contract has a 24-month build window, your borrowing cost will not be confirmed until late in that period. That uncertainty makes it harder to plan repayments and means buyers need a buffer in their budget to absorb potential rate increases between contract and settlement.

How to Structure Your Deposit and What Happens If You Cannot Settle

Off-the-plan contracts typically require a 10% deposit paid in stages: an initial amount on exchange, further instalments as construction progresses, and the balance at settlement. Some contracts allow a 5% deposit if the buyer is using the government guarantee, but not all developers will accept that structure. If you cannot settle because the lender will not proceed, the developer may be entitled to keep your deposit, and in some cases pursue damages for the difference between your contract price and the price they achieve on resale.

In our experience, buyers who rely entirely on the minimum deposit without any savings buffer often struggle at settlement if valuations fall or lending conditions tighten. A buyer in Cooma who committed to a $520,000 townhouse with a 5% deposit saved nothing further during the 16-month build period, assuming the pre-approval would carry through. At settlement the lender required proof of genuine savings beyond the deposit, and the buyer could not demonstrate that, causing the settlement to fail. The developer retained the deposit and resold the property.

What to Do Before Signing an Off-the-Plan Contract

Speak to a broker before you sign, not after. The contract you sign with the developer is binding, and once exchanged it is difficult and expensive to exit. A broker can review the development, check whether lenders on their panel will approve loans for that project, and confirm that your deposit structure and income will support settlement when the time comes. They can also flag developments that have been declined by multiple lenders or that carry known risks such as small lot sizes, uncertain title, or incomplete infrastructure.

Do not assume that because you can afford the repayments today, the loan will automatically proceed in 18 months. Lending policy changes, income changes, and property values change, and all of those factors are reassessed at settlement. If you are using a government scheme, confirm that the development qualifies and that the lender you are working with participates in that scheme for off-the-plan purchases. Not every lender on the panel accepts every type of property.

Call one of our team or book an appointment at a time that works for you. We work with buyers across the Snowy Mountains region and know which lenders will back which developments, what the current wait times are, and how to structure your application so it holds up at settlement.

Frequently Asked Questions