The approval process for a home loan usually takes between two and six weeks from application to formal approval, though that can stretch longer if documentation is incomplete or valuation issues arise.
What Happens During Pre-Approval?
Pre-approval gives you a conditional indication from a lender that they'll lend you a specific amount, subject to a property valuation and final checks. It usually takes three to five business days once all your documents are in. The lender reviews your income, employment, existing debts, living expenses, and credit file to calculate what they're willing to lend. Pre-approval is valid for three to six months depending on the lender and loan product.
In our experience, buyers who start with home loan pre-approval before they begin looking at properties have a clearer sense of their budget and can move quickly when they find the right place. Consider a buyer who applies with payslips from two different employers, one full-time and one casual. The lender will want to see at least six months of casual income history before they'll count it toward borrowing capacity, so the pre-approval amount might be lower than expected until that history is established. That buyer then knows to focus their search on properties within the confirmed range or wait until the casual income becomes usable.
How Long Does Formal Approval Take?
Once you've signed a contract and provided it to the lender along with any additional documents they've requested, the formal approval process begins. This stage typically takes one to two weeks. The lender orders a valuation of the property to confirm it's worth what you're paying for it. If the valuation comes back at or above the purchase price, and nothing in your financial situation has changed since pre-approval, formal approval is usually straightforward.
Valuation delays are one of the most common reasons approvals take longer than expected. Regional properties, off-the-plan purchases, and properties with unusual features can all take longer to value because the lender's valuer needs more time to find comparable sales. If the valuation comes in below the purchase price, the lender will only approve a loan based on the lower figure, which means you'll need to find a larger deposit or renegotiate the contract.
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What Documents Do You Need?
Lenders assess your application using documents that prove your identity, income, employment, assets, liabilities, and living expenses. You'll generally need photo ID, recent payslips, tax returns if you're self-employed, bank statements showing your savings and spending patterns, details of any existing debts, and proof of any rent you're paying.
As an example, a buyer applying with a 10% deposit will need to show that the deposit has been in their account for at least three months, or provide a statutory declaration and bank statements proving where it came from if it arrived more recently. Lenders want to see genuine savings rather than borrowed funds. If part of your deposit is a gift from family, you'll need a signed letter from the person giving it confirming it's a gift and doesn't need to be repaid. The lender may also want to see the donor's bank statement showing the funds leaving their account.
Does the Type of Loan Change the Timeline?
Variable rate loans and fixed rate loans generally move through the approval process at the same pace. A split loan combining both structures doesn't add material time to the process. Interest-only loans often require more documentation because the lender needs to be satisfied the loan is suitable for your situation, particularly if you're an owner-occupier rather than an investor.
Construction loans and off-the-plan purchases take longer because the lender needs to review building contracts, progress payment schedules, and sometimes council approvals. If you're applying for a construction loan, allow an extra one to two weeks for the lender to assess those additional documents. Approval is also conditional on the builder having appropriate insurance and the contract including standard industry clauses.
What Slows Down an Application?
Incomplete documentation is the single biggest cause of delay. If the lender asks for three months of bank statements and you provide two, the application sits in a queue until you send the third. If your employment changes between pre-approval and formal application, the lender will want to see evidence of your new role and income, which can add a week or more.
Credit file issues also slow things down. If there's a default, court judgment, or bankruptcy listed on your file, the lender will ask for a written explanation and supporting evidence before they'll proceed. If you've had multiple credit enquiries in recent months, they may want to know why. Checking your own credit file before you apply means you can address any issues upfront rather than discovering them mid-application.
Can You Speed Things Up?
Having all your documents ready before you apply makes the process faster. Recent payslips, tax returns, bank statements covering at least three months, details of your existing debts, and a copy of the contract of sale if you've already found a property all help the lender assess your application without needing to come back for more.
Responding quickly when the lender or broker asks for additional information keeps things moving. If you're waiting on a document from your employer or accountant, follow up with them directly rather than assuming it's been sent. If your settlement period is tight, let the lender know upfront so they can prioritise your application where possible.
What Happens Between Approval and Settlement?
Once formal approval is granted, the lender prepares the loan contract and sends it to you for signing. You'll also receive the Key Facts Sheet and any other disclosure documents required under credit law. Settlement is usually four to six weeks after exchange of contracts, though it can be longer or shorter depending on what you've negotiated with the seller.
If you're refinancing rather than purchasing, the process is similar but you won't have a contract of sale to provide. The lender will still order a valuation and assess your income, expenses, and credit file. Refinance applications often move slightly faster because there's no settlement deadline driving the timeline.
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