How Long Does Home Loan Approval Take in Australia?

The approval timeframe will depend on:

• Whether all required documents have been supplied

• Your employment and income structure

• Your deposit or available equity

• Your existing debts and living expenses

• Your credit history

• The type and location of the property

• Whether a property valuation is required

• The lender’s current assessment timeframes

Understanding the home loan approval process can help you prepare your application and avoid unnecessary delays.

Home Loan Approval Timeframes

As a general guide:

These timeframes are estimates only. Some applications may progress faster, while others may require further assessment or supporting information.

It is also important to understand that formal approval and settlement are separate stages. Receiving approval does not mean the loan has settled or that funds are immediately available.

What Are the Stages of Home Loan Approval?

Home loan approval is not always a single decision. Your application may move through several stages before the lender is ready to provide the funds.

1. Initial assessment

Before submitting your application, your mortgage broker will generally review your:

• Income

• Employment history

• Living expenses

• Deposit or available equity

• Existing loans and credit cards

• Credit history

• Proposed purchase price or loan amount

• Preferred loan features

This assessment helps determine which lenders and home loan products may be suitable for your circumstances.

Choosing the right lender from the beginning is important. The fastest lender may not be the most suitable lender if its credit policy does not match your financial position or the property you are purchasing.

2. Home loan pre-approval

Home loan pre-approval is an indication of how much a lender may be prepared to lend based on the information available at the time.

A straightforward pre-approval may take approximately two to five business days.

Applications may take longer where the borrower:

• Is self-employed

• Has multiple income sources

• Owns several properties

• Uses a trust or company structure

• Has recently changed employment

• Has a more complicated credit history

Pre-approval does not guarantee that a particular property will be accepted. The lender may still need to complete a property valuation and confirm that your financial circumstances have not changed.

3. Conditional approval

Conditional approval means the lender is prepared to approve the loan once certain outstanding requirements have been satisfied.

Common conditions include:

• A satisfactory property valuation

• Updated payslips or bank statements

• A signed contract of sale

• Evidence of genuine savings

• Confirmation that an existing debt will be repaid

• Additional identification documents

• Evidence of rental income

• Confirmation of funds available for settlement

• Lenders mortgage insurance approval

Conditional approval is a positive step, but the application is not yet formally or unconditionally approved.

4. Property valuation

The lender may need to complete a valuation of the property being purchased or used as security.

Depending on the property, the valuation may be completed using:

• An automated valuation

• A desktop assessment

• A kerbside valuation

• A full physical inspection

An automated valuation may be completed quickly, while a full inspection may take several business days.

Valuations can take longer for:

• Regional or rural properties

• Unique or specialised properties

• Apartments in large developments

• Properties with zoning concerns

• Tenanted properties where access is required

• Construction or renovation projects

The valuation is used to determine whether the property is acceptable security and to calculate the loan-to-value ratio.

5. Formal approval

Formal approval is issued once the lender has completed its assessment and all outstanding conditions have been satisfied.

The lender will generally confirm:

• Your income and employment

• Your living expenses

• Your existing debts

• Your credit history

• Your borrowing capacity

• Your deposit or equity contribution

• The property valuation

• The acceptability of the property

• Any lenders mortgage insurance requirements

Formal approval may take approximately two to seven business days after the lender has received everything required.

Your solicitor or conveyancer should provide advice before you confirm that a finance condition has been satisfied.

What Can Delay Home Loan Approval?

Several factors can delay the home loan approval process.

Missing or outdated documents

Incomplete documents are one of the most common causes of delays.

Depending on your circumstances, you may need to provide:

• Recent payslips

• Bank statements

• Identification documents

• Evidence of savings

• Tax returns

• Notices of assessment

• Business financial statements

• Rental statements

• Existing loan statements

• Credit card statements

• A signed contract of sale

Documents should be current, complete and easy to read.

Self-employed income

Self-employed home loan applications can take longer because the lender may need to review:

• Personal tax returns

• Business tax returns

• Financial statements

• Business bank statements

• Company or trust structures

• Existing business debts

• Changes in business income

The lender may also need to consider depreciation, one-off expenses, director wages, retained profits and other adjustments.

Property valuation issues

Approval may be delayed if:

• The valuation is lower than the purchase price

• The property is unusual

• The property is located in a regional or rural area

• Access cannot be arranged

• Construction is incomplete

• The lender identifies zoning or title concerns

• The property does not meet the lender’s security requirements

A valuation below the purchase price may also mean you need to contribute a larger deposit.

Smaller deposits

Applications with a smaller deposit may require additional assessment.

Where lenders mortgage insurance applies, the application may need to be assessed by both the lender and the mortgage insurer.

This can add additional time to the approval process.

Credit history concerns

Late repayments, defaults, multiple recent credit enquiries or undisclosed debts may lead to further questions.

These issues do not always mean the application will be declined, but the lender may request an explanation and supporting evidence.

Borrowing close to your maximum capacity

Applications may take longer where the requested loan amount is close to the lender’s maximum borrowing calculation.

The lender may review your:

• Living expenses

• Existing debts

• Credit card limits

• Dependants

• Rental income

• Overtime or bonus income

• Proposed loan repayments

Additional information may be required before a final decision can be made.

Changes during the application

Changing jobs or applying for additional credit during the home loan process may affect your approval.

This includes:

• Taking out a vehicle loan

• Applying for a personal loan

• Increasing a credit card limit

• Opening a new credit card

• Moving from permanent to casual employment

• Reducing your working hours

Speak with your mortgage broker before making any significant financial or employment changes.

How Can You Get Your Home Loan Approved Faster?

Although approval timeframes cannot be guaranteed, there are several ways to reduce avoidable delays.

Prepare your documents early

Gather your documents before making an offer or submitting an application.

Make sure they are:

• Current

• Complete

• Legible

• Consistent with the application

• Provided in the requested format

Disclose your full financial position

Tell your broker about all financial commitments, including:

• Credit cards

• Personal loans

• Car loans

• HECS or HELP debts

• Buy now, pay later accounts

• Child support

• Existing mortgages

• Business liabilities

Even credit cards with a nil balance can affect your borrowing capacity if the account remains open.

Avoid applying for new credit

Avoid applying for new finance while your home loan is being assessed.

A new credit enquiry or debt may reduce your borrowing capacity and require the application to be reassessed.

Respond quickly to requests

When your broker or lender requests an additional document, provide it as soon as possible.

Your application may not progress until the outstanding information has been received.

Allow enough time in your finance clause

Before signing a property contract, discuss the finance timeframe with your mortgage broker, solicitor or conveyancer.

A short finance clause may not provide enough time for:

• Credit assessment

• Property valuation

• Additional document requests

• Lenders mortgage insurance

• Formal approval

Work with a mortgage broker

A mortgage broker can help you:

• Review your borrowing capacity

• Compare suitable lender options

• Identify possible issues before lodgement

• Prepare your supporting documents

• Submit the application

• Communicate with the lender

• Manage approval conditions

• Track the application through to settlement

A mortgage broker cannot guarantee approval or control the lender’s processing time. However, a properly prepared application submitted to a suitable lender can help minimise unnecessary delays.

How Long Does Refinancing Approval Take?

A refinance application may take approximately one to two weeks to reach formal approval.

The lender will generally need to:

1. Confirm your income and expenses.

2. Review your existing debts.

3. Check your repayment history.

4. Complete a property valuation.

5. Assess your borrowing capacity.

6. Provide formal approval.

7. Issue the new loan documents.

After formal approval, your existing lender must process the discharge authority and coordinate settlement with the new lender.

The full refinancing process can therefore take several weeks, even where approval is received quickly.

Returning your discharge authority promptly can help prevent settlement delays.

Can a Home Loan Be Approved in One Day?

In some circumstances, a straightforward application may receive a decision within one business day.

This is more likely where:

• The applicants have stable PAYG employment

• All documents are supplied upfront

• The application is comfortably within lending policy

• The applicants have a strong credit history

• An automated property valuation is available

• No lenders mortgage insurance is required

• The application does not require manual assessment

However, a fast initial decision may still be subject to conditions.

Do not assume the loan is fully approved until formal or unconditional approval has been issued.

What Happens After Formal Approval?

After formal approval, the lender will prepare and issue the loan documents.

You may need to:

• Review and sign the loan documents

• Arrange building insurance

• Update the interested party on your insurance policy

• Provide a Certificate of Currency

• Confirm your contribution funds are available

• Complete a discharge authority when refinancing

• Provide any outstanding settlement documents

• Work with your solicitor or conveyancer

Formal approval is an important milestone, but the home loan is not complete until the documents have been accepted and settlement has occurred.

Frequently Asked Questions

How long does home loan pre-approval take?

A straightforward home loan pre-approval may take approximately two to five business days. Complex applications may take longer.

How long does formal home loan approval take?

Formal approval may take approximately two to seven business days once all required documents and the property valuation have been received.

Does pre-approval guarantee formal approval?

No. Pre-approval is generally subject to conditions, including assessment of the property and confirmation that your financial circumstances have not changed.

Can a property valuation delay approval?

Yes. Automated valuations may be completed quickly, while physical valuations may take several business days.

How long does settlement take after approval?

Settlement commonly occurs several weeks after the property contract is signed. The exact timeframe will depend on the contract, loan documents, discharge process and readiness of all parties.

Can a mortgage broker speed up approval?

A mortgage broker cannot guarantee the lender’s assessment time. However, a broker can help prepare the application correctly, select a suitable lender and respond quickly to outstanding requirements.

Speak With a Brisbane Mortgage Broker

The time required to approve a home loan will depend on your financial circumstances, the property and the complexity of the application.

At Mortgage Matrix, we help prepare your application, compare suitable options and manage the process from initial assessment through to formal approval and settlement.

Whether you are:

• Buying your first home

• Purchasing your next property

• Investing

• Refinancing

• Building a new home

Our Brisbane mortgage brokers can explain the process and help you understand what to expect at each stage.

Book an obligation-free appointment with Mortgage Matrix to discuss your borrowing capacity and home loan options.

The timeframes provided in this article are general estimates only and are not guarantees of approval or processing time. Lending criteria, interest rates, fees and assessment timeframes vary and are subject to change. This information is general in nature and does not take into account your personal objectives, financial situation or needs.