Everything you need to know about getting a pre-approval for your mortgage.
What is pre-approval?
Home loan pre-approval (or conditional approval) means that a lender has agreed, in principle, to lend you money towards the purchase of your home but hasn’t proceeded to a full and final approval. A pre-approval will help you get an indication of how much you can borrow from the bank. However, a pre-approval doesn’t guarantee an unconditional finance approval.
Benefits of a home loan pre-approval
- Getting pre-approved for your home loan allows you to look for a property with confidence.
- It can make your search more focused and give you an estimated budget to work with.
- Having a conditional approval can put you in a stronger position when you’re making an offer, showing sellers you’re serious and financially capable.
When you make an offer (provided the seller and their sale conditions allow), you can set purchase conditions. For instance, you might make your offer ‘subject to finance’, or ‘subject to pest and building inspections’. It’s a good idea to get your solicitor or conveyancer to advise you on this.
When to apply for pre-approval
Timing your pre-approval close to when you’re planning to buy your home is key. Ideally, it helps to have your finances in order, and a clear idea of what you’re looking for in a property. As a prospective home buyer, you can apply for a pre-approval once you’ve done some initial research like:
- Working out your borrowing capacity using these financial tools and calculators,. Or contact us if you need help.
- Working out how much you can afford to repay.
- Looking at the local property market and suburbs you’re interested in.
- Viewing different home loan options, speaking to us if you’re not sure which one is the right fit for you.
This way, the pre-approval gives you a solid budget and positions you as a serious buyer when you find the right home.
Do you need your property finalised when applying for a pre-approval?
You don’t need to have chosen a specific property when applying for a conditional approval. It’s worth noting however, that a pre-approval comes with an expiration date. Here are a few things to keep in mind:
- Avoid applying for a pre-approval too early in your home buying journey. This can be risky as pre-approvals have an expiry date, often around 90 days.
- If you haven’t found a property by then, you’ll need to reapply and go through the process again, which can affect your credit score. Multiple applications within a short period can lower your credit score and make you look like a riskier borrower to lenders, which may impact your ability to secure favourable loan terms when you’re ready to buy.
- There’s also a possibility that your financial situation could change, meaning the pre-approval may not correctly reflect your current borrowing capacity when you’re ready to buy.
Pre-approval process
We will help you get an understanding of what you’ll need for your application.
The home loan pre-approval process typically starts with you submitting your application with all the necessary documents like income statements, bank records and credit history.
Your lender then reviews your financial situation. They’ll look at what you owe (loans, credit cards etc.), and how much you own (assets including cars, shares etc). They’ll also check your employment situation (for example, self-employed, full-time, part-time, etc).
A credit check is performed to assess your financial reliability and see how you’ve managed debt in the past, as this helps your lender gauge the risk of lending to you. A strong credit history will indicate you’re a trustworthy borrower.
How long does pre-approval take?
The time it takes to get a conditional approval depends on your individual circumstances. In some cases, it takes a few hours. In other cases, it may take a few weeks. Speak to us to get an estimate of how long your pre-approval may take. It’s also worth noting that a pre-approval is generally free-of-charge and is obligation-free for both parties. Meaning even if you gain pre-approval from a lender, you aren’t required to borrow from them.
Factors that affect pre-approval time
There are a few key factors that determine how long your mortgage pre-approval takes:
- Your financial documents: The sooner you provide all the necessary paperwork, the faster your pre-approval could be.
- Credit history: If there are any issues or errors with your credit report, it could take extra time to resolve them before moving forward.
- Lender’s workload: In case your lender is busy or is processing a lot of applications, it could take longer to get a home loan pre-approval.
- Complex finances: If you have multiple sources of income, are self-employed or have existing debt, it may take the lender time to assess everything.
We make it easy for you to prepare everything you need before submitting your loan application.
Bidding on a house with a pre-approval
Once you have a conditional approval, you can bid on a property at auction. If your bid is successful, you’ll then need to gain full approval.
Part of the final approval process involves the bank valuing the property you plan to purchase. So be wary of paying more than a fair price for the property, as this may affect the bank’s willingness to grant final approval.
How do you apply?
If you’re looking to get started on your home loan journey, contact us, we will guide you through the entire process.
Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://business.nab.com.au/
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
© 2026 National Australia Bank Limited (“NAB”). All rights reserved.
Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
