What If I Change My Mind About Buying A House?

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 when the sale is still conditional, 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.

When the sale becomes unconditional, you are no longer able to back out of the contract without incurring 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.

Floating Home Loan Rates

If you’re currently considering a home loan, the table below displays some of the floating home loans on our database (some may have links to lenders’ websites) that are available for home owners looking to refinance. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. 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. Canstar may earn a fee for referrals.

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 they don’t have to back out of a property sale due to financial reasons.

Under the standard Agreement for Sale and Purchase issued by the Real Estate Institute of NZ and the Auckland District Law Society, if there’s a finance condition in a sales agreement and the purchaser uses it to renege on a deal, they must supply evidence backing their lack of finance or face legal action by the vendor.

And if your finance has been rejected and you’ve 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.

Compare Home Loans

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.