What is pre‑approval?
If you’re buying a property for the first time, pre‑approval may be a new concept – so what does it actually mean?
When you apply for pre‑approval, you speak with a bank or lender and provide information about your income, expenses and overall financial position. This process also involves a credit check. Based on this information, the lender may indicate how much you could potentially borrow.
Pre-approval puts you in a stronger position to start looking for a property and make an offer, as you’ve already been assessed against the lender’s criteria at that time.
However, it’s important to note that pre‑approval is not a formal or unconditional loan approval. Final approval only occurs after you’ve found a property and the lender has completed all required checks, which includes reviewing the property details and confirming your financial circumstances haven’t changed.
Will you need pre‑approval?
Here are a few advantages to securing pre-approval for a home loan.
Ready for action
Finding the right property can happen quickly. Pre‑approval can help you understand your borrowing capacity upfront, so you can be ready to make an offer when the right opportunity comes along.
Confidence, not commitment
Pre‑approval allows you to start your property search without locking you into a purchase or a loan. If you don’t find the right property straight away, you can continue your search knowing where you stand. However, it should be noted that pre‑approvals are time‑limited and may need to be reassessed.
Stand out to sellers
When sellers are comparing multiple offers, having pre‑approval in place can demonstrate that you’ve already spoken with a lender and taken steps towards securing finance, which may strengthen your position.
How the pre-approval process works
Get in touch with us
When you’re ready to start your property search, contact your local branch or apply online. One of our lending experts will review your income, expenses and commitments to estimate how much you could potentially borrow, based on the information available at that time.
If eligible, you may receive a conditional approval (also known as pre‑approval). This is not a formal or unconditional loan approval, but it can help you understand your budget and guide your property search. It may also be useful when negotiating, as it shows you’ve taken early steps towards securing finance.
At this stage, it’s also a good idea to line up a conveyancer or solicitor, so you’re prepared when the right property comes along.
Start your search
With pre‑approval in place, you can begin looking for a property. Once you’ve found a property you’d like to buy, your lender will re‑confirm your financial details and arrange a property valuation.
If all requirements are met (including property, valuation and final checks), your loan can then move to formal approval, allowing you to proceed to exchange and settlement.
Your questions answered
How long does pre-approval for a home loan take?
Timeframes can vary depending on your individual circumstances.
For straightforward applications, pre‑approval may be issued within a few business days, with around 3–5 business days being fairly standard.
More complex applications can take longer, sometimes up to a couple of weeks. To avoid surprises, it’s a good idea to speak with your lender early so you understand what information is needed and what timeframes may apply.
Does pre‑approval guarantee a home loan?
No. Pre‑approval does not guarantee final loan approval.
Pre‑approval is an initial, conditional assessment based on your financial situation at the time of application. Final approval depends on a number of additional factors, including:
- The property you choose
- The valuation outcome
- Confirmation that your financial circumstances haven’t changed
- Completion of all lender checks and requirements
Pre‑approval is designed to guide you in your property search, but final approval depends on further checks once a property is chosen.
How does a pre‑approval home loan work?
Pre‑approval is an early assessment where a lender indicates how much you may be able to borrow, subject to conditions.
It helps you:
- Understand your borrowing capacity
- Set a realistic property budget
- Begin your property search confidently.