The real cost of waiting for the "right" conditions

Most people think the goal is always the lowest interest rate available. My goal has always been getting control of an appreciating asset as early as I can, and the rate is a separate problem I solve for afterward.

My partner and I recently settled on a property in Wodonga for $655,000. It's a market I rate highly and have been active in for clients for a while. Ten year compound annual growth there sits around 8.5 percent, and it's held that pace because of a diverse local economy rather than one dominant industry.

We released $300,000 in equity last July, ahead of my partner going on maternity leave, so the portfolio had both deposits and buffering ready before the income change arrived. Of that, $165,000 went into this purchase.

The complication was serviceability. With reduced household income while my partner was on leave, we couldn't get this deal through a tier one lender. We went with a lower tier lender instead, at 8.75 percent. That's a real cost, and I'm not dressing it up as anything else.

Waiting for a better rate was the easier option. Nobody would have questioned it, given the timing. I've watched clients make that exact call before, waiting on the sidelines for things to improve, only to find themselves buying later at a higher price than the one they walked away from.

Here's why we did it anyway.

We still had $140,000, held back from that same equity release plus our other savings rather than fully deployed. That buffer exists specifically to cover situations like this one, a period where servicing is tighter than usual but the underlying decision is sound. We're already strong savers, and that capacity only grows as my partner's income increases. Three days a week now, four from September, full time from January 2027. We have a plan to refinance onto a better rate once that income lifts. We also have a backup plan of other lenders who may take the loan at the twelve month mark, subject to lending policy at the time.

So the real decision wasn't "cheap rate versus expensive rate." It was "get into this asset now, with a plan to fix the financing later" versus "wait for ideal conditions and risk paying more for a similar property in the same market later." Those are different questions, and most people only ever ask the first one.

The trade-off is straightforward. We're paying more in interest for a calculated period of time than we would with a stronger lender. In exchange, we've locked in today's price rather than a later, likely higher one, which also means today's deposit requirement and today's stamp duty, not tomorrow's larger versions of both. That difference sits in our offset account right now, working against the higher rate, not away from it.

The downside is real too. Without that buffer, this would have put real financial strain on the household while my partner is on reduced hours. That's not a risk we ignored. It's the reason the buffer was there in the first place.

This approach doesn't suit everyone. If you don't have a reserve to absorb a temporary rate premium, or you don't have a clear path back to better financing, taking a higher rate to force a purchase through is a different decision entirely, and a riskier one. The difference isn't the rate. It's whether the rest of the position was already built to carry it.

The rule I'd take from this: optimising for rates can come later. The priority is getting into the right asset, at the right time, which usually can't be fixed down the road.

Where in your own plan are you waiting for ideal conditions, when the real question is whether you could get into position now and solve the rest afterward?

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Disclaimer: The information in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. It is not financial, legal, or tax advice. The Nelis Group accepts no liability for actions taken based on this content. You should seek independent advice from a relevant licensed professional before making any decisions and always confirm the latest rules and thresholds with your state revenue office or relevant authority.