Authored by the expert who managed and guided the team behind the Australia Property Pack
Everything you need to know before buying real estate is included in our Australia Property Pack
Getting mortgage pre-approval in Australia can be completed within hours to a few days if you have the right preparation and documentation.
As of September 2025, Australian lenders require a minimum 5% deposit, credit scores above 650-700, and debt-to-income ratios below 6-7 times your annual income for quick pre-approval processing.
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Most Australian banks can process pre-approval within 24-48 hours for straightforward applications, with some digital lenders offering instant system-generated approvals.
You'll need a minimum 5% deposit plus $25,000-$50,000 for stamp duty and legal costs, depending on property location and value.
| Requirement | Minimum Standard | Recommended for Fast Approval |
|---|---|---|
| Deposit | 5% of property value | 10-20% to avoid LMI |
| Credit Score | 650-700 | 750+ for best rates |
| Debt-to-Income Ratio | Below 6-7 times income | Below 4 times income |
| Employment History | 6 months current role | 2+ years stable employment |
| Documentation Age | 1-3 months old | Less than 30 days old |
| Upfront Costs Budget | $25,000-$35,000 | $40,000-$60,000 |
| Pre-approval Validity | 60-90 days | 90 days (renewable) |
What's the minimum deposit I need right now to qualify for pre-approval in Australia?
As of September 2025, the minimum deposit required for home loan pre-approval in Australia is 5% of the property value.
However, most lenders prefer to see a 10-20% deposit for faster processing and better loan terms. With just 5% down, you'll need to pay Lenders Mortgage Insurance (LMI), which can add $10,000-$50,000 to your loan costs depending on the property value.
The Australian government's expanded Home Guarantee Scheme, effective from October 1, 2025, now offers unlimited places for first-home buyers to purchase with just 5% deposit without paying LMI. This scheme removes previous income caps and increases property price caps to $1.5 million in major cities like Sydney.
For investment properties, most lenders require a minimum 10% deposit, with many preferring 20% to avoid additional fees and stricter lending criteria. Non-residents and foreign buyers typically need 20-30% deposits due to higher perceived risk.
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How much should I already have saved to comfortably cover stamp duty, legal fees and other upfront costs?
Beyond your deposit, you should have saved $25,000-$60,000 to cover stamp duty, legal fees, and other upfront costs when buying property in Australia.
Stamp duty varies significantly by state and property value. For a $600,000 property, expect to pay approximately $17,000-$25,000 in stamp duty in NSW, $21,000 in Victoria, and $8,750 in Queensland. First-home buyers may qualify for concessions or exemptions up to certain property values.
Conveyancing and legal fees typically range from $1,050-$2,500 depending on your state and transaction complexity. Additional costs include building and pest inspections ($400-$800), mortgage registration fees ($150-$300), and moving expenses.
Lenders Mortgage Insurance, if applicable with deposits under 20%, can cost 1-5% of your loan amount. For a $500,000 loan with 5% deposit, LMI might cost $15,000-$25,000. Budget an extra $5,000-$10,000 for miscellaneous expenses including removalists, utility connections, and immediate home necessities.
What exact credit score do most Australian lenders want to see before giving a quick pre-approval?
Most Australian lenders require a credit score of 650-700 minimum for home loan pre-approval, with scores above 750 providing access to the best rates and fastest processing.
| Credit Score Range | Lender Response | Pre-approval Likelihood |
|---|---|---|
| 850-1,200 (Excellent) | Instant approval, best rates | Virtually guaranteed |
| 750-849 (Very Good) | Fast approval, competitive rates | High likelihood |
| 650-749 (Good) | Standard processing, moderate rates | Good chances |
| 550-649 (Average) | Slower review, higher rates | Possible with conditions |
| Below 550 (Poor) | Specialist lenders only | Difficult, high rates |
| 400-500 (Bad) | Very limited options | Unlikely approval |
| Below 400 (Very Poor) | Non-bank lenders only | Extremely difficult |
Major banks like NAB, CommBank, and Westpac typically won't consider applications with scores below 600, while non-bank lenders may accept scores as low as 500 but charge significantly higher interest rates. A score of 700+ positions you as a preferred borrower with access to promotional rates and faster processing times.
How recent should my payslips, bank statements and tax returns be when I submit them?
All financial documents should be dated within the past 1-3 months for Australian mortgage pre-approval applications, with most lenders preferring documents less than 30 days old.
You'll need to provide your two most recent payslips if you're employed, plus your most recent Payment Summary or group certificate. Self-employed applicants must submit personal and business tax returns from the past two years, along with recent Australian Taxation Office assessments.
Bank statements covering the past 3-6 months are required to verify savings patterns and spending habits. Lenders want to see genuine savings history, not just a recent large deposit from a gift or loan. If you have rental income, provide current signed leases and rental statements showing consistent payments.
Any document older than 90 days will likely be rejected, requiring you to resubmit fresh paperwork and potentially delaying your pre-approval. Keep all documents organized and readily accessible to speed up the application process.
Do I need to show permanent full-time employment, or will casual/contract work be accepted by most banks here?
Permanent full-time employment is strongly preferred, but many Australian lenders now accept casual and contract work with proper documentation and employment history.
For casual workers, you'll need to demonstrate at least 12-24 months of consistent employment with the same employer or in the same industry. Lenders typically require a letter from your employer confirming ongoing work arrangements and average weekly hours.
Contract workers and freelancers must provide contracts showing work extending at least 6-12 months into the future, plus tax returns demonstrating stable income patterns over 2+ years. Some lenders may average your income over this period to determine borrowing capacity.
Self-employed borrowers face the strictest requirements, needing two years of tax returns, business activity statements, and sometimes accountant-verified financial statements. Bank statements showing regular business income deposits strengthen your application significantly.
Temporary visa holders and foreign residents face additional restrictions, with most lenders requiring permanent residency or citizenship for standard loan products.
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What's the maximum debt-to-income ratio Australian lenders usually allow when approving quickly?
Australian lenders typically allow a maximum debt-to-income ratio of 6-7 times your annual gross income for quick pre-approval, though this varies by institution.
Major banks have specific DTI caps: ANZ won't accept applications above 7.5 times income, CommBank manually reviews anything above 6 times income, NAB caps at 9 times income, and Westpac refers applications above 7 times income to their credit department for extended review.
For the fastest approval, aim for a DTI ratio below 4 times your annual income. This positions you as a low-risk borrower and typically results in automated approval through most lenders' digital systems. A DTI above 6 times income will trigger manual assessment, adding days or weeks to your approval timeline.
When calculating DTI, lenders include all debts: existing home loans, personal loans, car loans, credit card limits (even if paid in full monthly), and HECS/HELP debt. Recent regulatory changes in February 2025 allow some lenders to exclude HECS debt if it can be repaid quickly, potentially improving your borrowing capacity by $30,000-$50,000.
How can I pay down or consolidate existing debts fastest to improve my pre-approval chances?
Focus on paying down high-interest credit cards first, as these carry the most weight in lender calculations and often represent revolving credit limits rather than actual balances.
- Close unused credit cards and reduce limits on cards you keep - even a $5,000 unused credit card limit counts against your borrowing capacity
- Pay off personal loans and car loans aggressively using any available savings - these fixed debts reduce your monthly serviceability
- Consolidate multiple small debts into one lower-rate personal loan to simplify your financial profile
- Avoid buy-now-pay-later services in the months before applying, as these now appear on credit reports
- Make extra mortgage payments if you already own property to build equity and reduce debt levels
Consider using savings to eliminate smaller debts completely rather than spreading payments across multiple accounts. A clean debt profile with fewer active accounts often processes faster through automated lending systems.
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Which Australian banks or brokers are known for processing pre-approval the quickest right now?
As of September 2025, NAB leads the market for fast pre-approval processing, with 35% of eligible customers approved within one hour through their Simple Home Loan digital platform.
CommBank offers conditional pre-approval within 24-48 hours for straightforward applications, while some customers receive approval within 60 minutes. Their digital platform processes most applications automatically without human intervention.
Digital-first lenders consistently outperform traditional banks: Macquarie Bank reports 4-hour approvals when all documentation is complete, Bendigo Bank's Express Home Loan provides instant decisions, and non-bank lender loans.com.au processes applications within 3-5 days.
Avoid ANZ if speed is critical - while they've improved significantly from their 6-week delays in 2021, they still show the least consistency among major banks. Westpac typically takes 2-4 business days, making them middle-of-the-pack for processing speed.
Mortgage brokers can often expedite the process by pre-qualifying your application and directing it to lenders most likely to approve quickly based on your specific financial profile.
What type of pre-approval should I ask for: system-generated instant approval or fully assessed conditional approval?
Request fully assessed conditional approval rather than instant system-generated approval for maximum security and negotiating power in Australia's competitive property market.
System-generated instant approvals are processed automatically based on basic criteria and credit scoring algorithms. While faster (often within minutes), they carry more conditions and provide weaker negotiating positions when making property offers. These approvals are more likely to be downgraded or rejected during final assessment.
Fully assessed conditional approval involves human credit assessors reviewing your complete financial picture, including employment verification, expense analysis, and detailed credit history. This process takes 1-7 days but provides much stronger approval that sellers and real estate agents respect.
With fully assessed approval, you can make unconditional offers at auctions and negotiate more aggressively on private treaty sales. The deeper assessment also identifies potential issues early, reducing the risk of surprises during final approval when you find a property.
Consider instant approval only if you're house-hunting in slow markets or need immediate borrowing capacity estimates, but upgrade to full assessment before making any serious property offers.
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How long does pre-approval generally stay valid in Australia, and how can I extend it if I don't find a property in time?
Pre-approval in Australia typically remains valid for 90 days (3 months) from the issue date, though some lenders offer 60-day terms while others extend to 120 days.
To extend your pre-approval, contact your lender 2-3 weeks before expiration. Most banks allow one extension of 30-90 days if your financial circumstances haven't changed significantly. You'll need to provide updated payslips, bank statements, and confirm your employment status remains stable.
Multiple extensions become increasingly difficult and may require a fresh application with new credit checks. This can temporarily impact your credit score and signal to lenders that you're having difficulty securing property, potentially affecting future approval terms.
Time your pre-approval application strategically - apply when you're actively house-hunting rather than just exploring options. If you're still researching suburbs or saving additional funds, wait until you're ready to make offers within the validity period.
Some lenders offer conditional extensions during market slowdowns or if you're building a new home with extended settlement periods. Always negotiate extension terms upfront if you anticipate needing extra time.
What are the common mistakes that make pre-approval applications in Australia get delayed or declined?
Incomplete or outdated documentation causes the majority of delays and rejections in Australian pre-approval applications.
- Providing payslips older than 60 days or bank statements that don't show recent saving patterns
- Failing to declare all debts, including credit card limits, buy-now-pay-later accounts, and HECS debt
- Applying for new credit cards or loans during the pre-approval process, which triggers additional credit checks
- Understating living expenses or failing to account for dependents and their associated costs
- Providing unclear employment documentation for casual, contract, or self-employed income sources
Many applicants underestimate the importance of genuine savings requirements. Lenders want to see that your deposit came from regular savings over 3-6 months, not sudden large deposits from gifts, loans, or gambling winnings.
Self-employed borrowers frequently provide incomplete business documentation or fail to demonstrate consistent income patterns across multiple financial years. Always include business activity statements, profit and loss statements, and accountant letters if self-employed.
Another common error is applying to multiple lenders simultaneously, which creates multiple credit inquiries and can lower your credit score. Work with one lender or mortgage broker to avoid this issue.
Once I have pre-approval, what exact steps should I take immediately to stay "purchase-ready" without losing my approval status?
Maintain financial stability by avoiding any major changes to your income, employment, or debt levels during the pre-approval validity period.
Don't apply for new credit products, make large purchases, change jobs, or take unpaid leave during your house-hunting period. Even positive changes like salary increases should be documented and reported to your lender to ensure they don't trigger reassessment requirements.
Keep all your accounts active and maintain the same banking patterns that supported your initial approval. Sudden changes in spending habits or large withdrawals may require explanation during final approval. Save your property search documents and be ready to provide building and pest inspection reports quickly.
Organize your settlement team early: engage a conveyancer, arrange building and pest inspections, and confirm home insurance quotes. Having these professionals ready allows you to move quickly when you find the right property, especially important for auction purchases where finance clauses aren't available.
Monitor your pre-approval expiry date closely and begin the renewal process 2-3 weeks before expiration if needed. Stay in regular contact with your lender or broker to address any questions that arise during your property search.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Getting mortgage pre-approval in Australia requires careful preparation but can be achieved within 24-48 hours with the right approach.
Focus on maintaining a credit score above 650, keeping debt-to-income ratios below 6 times your annual income, and having comprehensive documentation ready for submission.