How to set your top price before auction day

It's Saturday morning in Tarneit. You're standing on a front lawn with forty other people, coffee going cold, and the agent is about to start.

For Victorian auctions from 16 October, the seller's reserve has to be on the ad a week before. Their number is public.

So here's the question that matters more. What's yours? Not the figure on your pre-approval letter. The price you can actually pay, with every cost counted.

Start with what a lender will lend you

Your borrowing figure is the first piece. A lender works it out from your income, your expenses and your debts.

They also test you at a higher rate than the one you'd pay. Under APRA's guidance, that buffer is 3 percentage points on top of the loan rate.

That's why your number moves when rates move. If you got pre-approved before the rate rise in late September, the figure on that letter may not be the figure today. Worth checking before you bid on anything.

Then add your savings, and take out what they have to cover

Here's where most people get it wrong. They add their savings to their borrowing and call that the budget.

But your savings have more than one job. They pay the deposit, and they pay the costs a lender won't lend you for.

• Stamp duty. As a first home buyer in Victoria you pay none up to $600,000. Between $600,000 and $750,000 a reduced amount applies, and it's cash at settlement.
• Government fees. The transfer registration fee on a $600,000 home lodged electronically is about $1,508. Registering the mortgage is another $129.20.
• Conveyancer, building and pest. Get quotes before auction day, not after.
• Moving and a buffer. The removalist, the connection fees, and some money left in the account for the first month.

Take those out first. What's left is what you can put towards the deposit.

Want a second set of eyes on your number before Saturday? Book a chat and we'll run it together.

The 10% you need on the day

This one catches people out. Under the 5% Deposit Scheme, eligible first home buyers can borrow with a 5% deposit and no Lenders Mortgage Insurance.

But at a Victorian auction, the winning bidder signs on the spot and usually pays a 10% deposit. The seller expects it whether your lender needs it or not.

So a couple with 5% saved can be approved for the loan and still be short on the day. There are ways around it. Some sellers accept less if you ask before the auction. A deposit bond is another option.

That's a conversation for your conveyancer and the agent before you register to bid. Not on the lawn.

Know where the lines sit

Three figures shape the top end of your number.

• $600,000. The stamp duty exemption stops here. A home just over this line costs more cash than the price gap suggests.
• $750,000. Above this, the first home buyer concession is gone.
• $950,000. The 5% Deposit Scheme price cap for Melbourne and Geelong. Above it, the scheme doesn't apply.

Each one changes how much of your savings goes to costs, which changes your deposit, which changes your top price. That's why the number isn't simple.

Write it down before you walk in

At auction there's no cooling off period and no finance clause. When the hammer falls, you're committed.

So decide your number at the kitchen table, not in the crowd. Write it down. Tell your partner. Agree that it doesn't change on the day.

Then compare it with the published reserve. If the reserve is already above your number, that's useful to know a week out. It saves you a Saturday morning.

I've helped over 100 first home buyers into the market, and this is the work we do before any of them bid. If you'd like to work out your real number together, book a chat.

Let's get you into a home.

Figures verified 13 October 2026 against the State Revenue Office Victoria, Housing Australia scheme guidance, Land Use Victoria's 2026 to 2027 Transfer of Land Act fees and APRA's macroprudential settings.