Quick answer: pre-approval (conditional approval) is a lender’s indication of how much it’s prepared to lend you, based on your income, debts, deposit and credit file. It usually lasts around 90 days, depending on the lender, and it’s not a guarantee: the final loan still depends on the property, its valuation and your situation not changing.
A common mistake: someone finds the perfect place, gets excited, then scrambles to sort finance, and either misses out or overcommits. Pre-approval flips that around. It gives you a realistic budget before you start looking, so you can shop and negotiate with more confidence. Here’s how it works, and where it can still change.
What pre-approval actually is
Pre-approval, also called conditional approval, is a lender saying: “based on your income, debts, deposit and credit, we’d be prepared to lend you up to about $X”, subject to conditions and a valuation once you find a property. It isn’t the final loan.
Not all pre-approvals are equal. Some are generated automatically from what you type into a form. A credit-assessed pre-approval, where a lender’s credit team has reviewed your payslips, statements and credit file, is far more reliable. That’s the kind we arrange.
Why it helps
- A realistic budget. You search and negotiate within a figure a lender has actually assessed.
- Problems surface early. A credit file issue, a missing document or a lender policy that doesn’t suit you is found now, not the week you sign.
- Agents take you seriously. A buyer with finance underway is a stronger buyer.
- You can move faster once you find the right place, because most of the paperwork is done.
Buying at auction?
An auction contract is usually unconditional: there’s generally no finance clause and no cooling-off period. Pre-approval reduces the risk but doesn’t remove it, because the lender still has to value and approve the specific property. Before you bid, talk to us and your solicitor or conveyancer about the property, the contract and whether the lender is comfortable with it.
How long it lasts
Most pre-approvals last around 90 days, though some lenders give 3 to 6 months. If you haven’t bought by then, it can usually be renewed with updated payslips and statements, and the lender reassesses at its rates and policies on that day. The best time to get pre-approved is when you’re genuinely ready to start inspecting, not months ahead.
What can change between pre-approval and final approval
- The property and its valuation. If the bank values it below the price, the loan is based on the lower figure. What to do if the valuation comes in low. Some lenders also limit certain properties, such as very small apartments or properties in specific postcodes.
- Interest rates. Lenders reassess at the rate on the day. After the RBA’s rise to 4.60% on 29 September 2026, a pre-approval issued earlier can come in lower at formal approval if you were near your limit. What a rate rise does to borrowing power.
- Your situation. A new job (especially one on probation), reduced hours, a new car loan, a buy now pay later account or a higher credit card limit can all change the outcome. Talk to us before making any of those changes.
- Lender policy. Lenders adjust their rules over time, and a renewed pre-approval is assessed under the policy at that time.
What you’ll need
- Photo ID
- Your two most recent payslips, or tax returns and notices of assessment if you’re self-employed
- Around three months of statements for your everyday, savings and credit card accounts
- Details of any other loans, HECS-HELP debt and your living expenses
- Evidence of your deposit, including any gift from family
Once your documents are complete, a credit-assessed pre-approval often takes a few business days, depending on the lender.
Will it hurt my credit score?
A formal pre-approval usually involves a credit enquiry on your file, and several applications in a short time can look like a borrower in trouble. That’s where a broker helps: we compare lenders first and apply to the one most likely to suit you, so you ideally have one enquiry instead of five.
Pre-approval vs unconditional approval
Pre-approval: “we’d likely lend you up to $X”, before you have a property.
Unconditional (formal) approval: the property is valued and the loan is fully approved. This is what you settle with.
Common questions
How long does home loan pre-approval last?
Usually around 90 days, though some lenders allow 3 to 6 months. It can normally be renewed with updated documents, and the lender reassesses at its current rates and policy.
Is pre-approval a guarantee?
No. It’s a conditional indication. The final loan depends on the property, its valuation, current rates and your circumstances staying the same.
Does pre-approval affect my credit score?
A formal pre-approval usually adds a credit enquiry to your file. One enquiry is normal; several in a short period can count against you, which is why it helps to compare lenders before applying.
Can I bid at auction with pre-approval?
Many buyers do, but an auction purchase usually has no finance clause or cooling-off period, and pre-approval doesn’t guarantee the lender will approve that property. Speak with your broker and your solicitor or conveyancer before you bid.
Did the September 2026 rate rise affect my pre-approval?
It can. Lenders reassess at the rate on the day of formal approval, so if your pre-approval was issued before the 29 September rise and you were close to your limit, the approved amount may be lower. Ask us to re-check it before you bid.
Want a feel for your numbers first? Try the borrowing power calculator or the buying costs calculator, then talk to us about a credit-assessed pre-approval.
General information only, not financial or credit advice. Lender policies, validity periods and assessment rates vary and change. Updated 6 October 2026.