Pre-approval

Home Loan Pre-Approval

Home loan pre-approval is a lender's conditional agreement to lend you up to a set amount, based on your income, expenses and debts. It usually lasts three to six months.

It helps you set your budget and shows sellers you're serious. It isn't final approval: the lender still needs to value the property and recheck your details.

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Advantages of pre-approval

No obligation: if you don't use the approval, you don't have to.
Faster formal approval: once you sign a contract, the lender mainly needs to value the property.
Negotiating power: sellers know you're a serious buyer.
Confidence: you're looking at properties within your range.

Pre-approval usually lasts 90 to 180 days depending on the lender, and some let you extend it.

How much should I get pre-approved for?

Get pre-approved for the most you'd consider borrowing. You can always borrow less, but if you need more than your pre-approval, the assessment has to start again.

Is pre-approval unconditional approval?

No. Pre-approval is subject to a contract of sale, an acceptable valuation and sometimes lenders mortgage insurance approval. To be unconditional, the lender generally needs to value the property and confirm it's acceptable security.

Calculator estimate or pre-approval: what's the difference?

A borrowing power calculator gives you a quick estimate from the figures you type in. Pre-approval is a lender assessing your actual documents and credit file. Use the calculator to get a feel for your range, then get pre-approved before you make an offer or bid at auction.

Calculator estimate: takes minutes, needs no documents and has no credit check. It isn't an approval.
Pre-approval: a lender checks your income, expenses, debts and credit history, then agrees in principle to lend up to a set amount, subject to conditions.

How to get pre-approved, step by step

Talk to us about your plans: your price range, your deposit and how you'd like the loan set up.
Gather your documents: use the checklist above.
Choose a lender: we compare lender policies that suit your situation and recommend one.
Lodge the application: the lender assesses it, including a credit check.
Receive your pre-approval: the lender confirms the amount, any conditions and the expiry date.

Pre-approval, conditional approval and formal approval

Pre-approval (also called approval in principle): the lender has assessed you but not a property.
Conditional approval: some lenders use this term for pre-approval. Others use it once you've found a property and only a few conditions remain, such as the valuation.
Formal (unconditional) approval: the lender has valued the property you've signed a contract on and confirmed it's acceptable security. Loan documents are issued after this.
Settlement: the lender releases the funds and the property is yours.

Because lenders use these terms differently, always ask what conditions apply to your approval and when they need to be met.

Why pre-approval can take longer than expected

Many pre-approvals come through within a few days but some take a few weeks. Common causes of delay include:

missing or out-of-date documents, such as payslips more than a month old
self-employed income that needs tax returns, financial statements or an accountant's letter
living expenses or debts that don't match your bank statements
a recent job change, a probation period or casual income
credit file issues, including defaults or several recent credit enquiries
busy periods at the lender, such as after an interest rate change

Sending everything complete and accurate the first time is the best way to keep it moving. For more detail, see how long home loan approval takes.

After you're pre-approved

Keep your finances steady: avoid new credit, large unexplained transfers or changing jobs before settlement. When you find a property, we'll move the application to formal approval and arrange the valuation.

Frequently asked questions

How long does home loan pre-approval last?

Most pre-approvals last three to six months depending on the lender. If you haven't bought by then, it can usually be renewed with updated payslips and statements.

Does pre-approval affect my credit score?

A pre-approval usually involves a credit enquiry, which shows on your credit file. One or two enquiries are normal, but many in a short time can count against you, so let a broker choose the right lender first.

Is pre-approval a guarantee I'll get the loan?

No. Formal approval still depends on the property valuation, final checks of your income and debts and the lender's policy at the time. Avoid new debt or job changes between pre-approval and settlement.

How long does pre-approval take?

Anywhere from a day to a couple of weeks, depending on the lender and how complete your documents are. Having everything ready up front is the biggest time-saver.

Ready to get pre-approved?

We'll help you gather your documents and choose the right lender first.

Get in touch

Or call us on (07) 3194 0888