Pre-approval is the moment your house hunt gets real. It's also the moment you stop guessing your budget and start house-hunting with a number a lender has actually looked at. The catch: lenders want a fair pile of paperwork before they'll put that number in writing. Here's exactly what to pull together so your broker can lodge in a day, not a fortnight.

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What pre-approval actually is

Pre-approval (sometimes called "conditional approval" or "approval in principle") is the lender's signal that, based on the financial picture you've given them, they'd lend you up to a certain amount. It is not a guaranteed loan. Moneysmart describes it as showing "you're eligible to apply for a loan up to a certain amount". It doesn't commit you, and it doesn't commit the lender either.

Three terms to keep straight:

  • Pre-approval / conditional approval. Your finances have been checked. The loan is subject to conditions (usually a satisfactory property valuation and a final credit check).
  • Unconditional / formal approval. Comes after you've made an offer. The lender has valued the specific property, re-verified your situation, and is ready to fund the purchase.
  • Settlement. The loan is drawn and the property is yours.

Pre-approval typically lasts 3 months with the major banks (CBA, NAB, ANZ, Westpac), with some non-majors stretching to 6 months. Once it lapses, you re-submit current documents and your broker re-runs the assessment.

The document checklist

Checklist

The pre-approval document checklist

🪪 Identity (100 pts)

  • Driver's licence or passport
  • Medicare or birth certificate
  • Recent utility / rates bill

💼 Income (PAYG)

  • 2 most recent payslips
  • ATO income statement / PAYG summary
  • Employment letter (if new/casual)

💰 Savings & deposit

  • 3 months bank statements (all accounts)
  • Evidence of deposit source
  • Gift letter (if applicable)

💳 Debts & expenses

  • Credit card statements (every card)
  • Personal/car loan statements
  • HECS balance + BNPL accounts
  • 3 months transaction statements
  • Rental ledger (if renting)

🧑‍💼 Self-employed extras

  • Personal + business tax returns (2 yrs)
  • Matching ATO Notices of Assessment
  • 12 months BAS + current P&L / balance sheet
  • ABN + GST registration details

From a complete pack to a pre-approval letter is typically 2–5 business days.

Identity (100 points of ID)

Lenders verify you using the standard 100-point check. You'll need at least two forms, one with a photo.

  • Photo ID. Driver's licence or passport (70 points)
  • Secondary ID. Medicare card, birth certificate, or recent utility bill in your name (25–40 points)
  • Proof of address. Recent rates notice, utility bill, or rental ledger

Proves: You are who you say you are.

Income (PAYG employees)

  • Two most recent payslips. No older than 60 days, showing year-to-date figures (ANZ requires YTD covering at least 3 months of continuous employment)
  • ATO Income Statement or PAYG Summary. Last financial year, downloadable from myGov
  • Employment contract or letter from employer. Useful if you're new in the role, on probation, or casual
  • Tax return or Notice of Assessment. Sometimes requested, especially for bonus or commission income

Proves: Stable income to service the loan.

Income (self-employed)

This is the bigger pile. Most lenders want a track record:

  • Personal tax returns. Last 2 financial years
  • Business tax returns. Last 2 financial years
  • ATO Notices of Assessment. Matching both years, no older than 22½ months
  • BAS (Business Activity Statements). Last 12 months
  • Profit and loss statement and balance sheet. Current year if returns aren't lodged yet
  • ABN and GST registration details

A handful of lenders (including NAB) will look at a single year's financials if your loan-to-value ratio is 80% or under. Low-doc options exist if you've been trading 12+ months but don't have two full tax years.

Proves: Your business income is real, steady, and likely to continue.

Savings and deposit

  • 3 months of bank statements for every account holding savings
  • Evidence of the deposit source. Savings, sale of asset, inheritance, First Home Super Saver release
  • Gift letter if part of your deposit is a gift from family. The letter needs to state the amount, that it's non-repayable, and be signed by the giver.

The "genuine savings" rule

If you're borrowing more than 80% of the property value (so paying less than 20% deposit), most lenders require 5% of the purchase price as genuine savings. That means funds you've accumulated yourself over at least 3 months, demonstrated through bank statements. Gifts, tax refunds, and one-off windfalls usually don't count as genuine savings, though they can still form part of your deposit.

Proves: You can save consistently and you have the money you say you have.

Debts and expenses

  • Credit card statements. Most recent statement for every card, even ones you never use (lenders assess the limit, not the balance)
  • Personal loan or car loan statements. Current balance and repayments
  • HECS/HELP balance. Shown on your latest Notice of Assessment or ATO account
  • Buy-now-pay-later accounts. Afterpay, Zip, Klarna, etc. Lenders see them on bank statements anyway, so disclose them.
  • 3 months of everyday transaction account statements for the expense assessment
  • Rental ledger or last 3 months of rent payments on bank statements if you're renting

Proves: Your real cost of living and what's already committed before the new mortgage.

Other

  • First Home Owner Grant or QLD First Home Buyer concession documentation if you're claiming either
  • Insurance details if you already hold landlord or building cover

Self-employed vs PAYG: at a glance

Compare

PAYG vs self-employed: what's different

💼 PAYG employee

  • 2 most recent payslips
  • ATO income statement / PAYG summary
  • Employment letter (if new/casual)
  • Tax return / NOA (if bonus or commission)

🧑‍💼 Self-employed / sole trader

  • Everything PAYG needs, plus:
  • Personal tax returns, 2 years
  • Business tax returns, 2 years
  • Matching ATO Notices of Assessment
  • BAS for the last 12 months
  • Current P&L + balance sheet
  • ABN + GST registration details

A handful of lenders (including NAB) will look at 1 year of financials if your LVR is ≤ 80%.

How long pre-approval lasts (and what kills it)

Most major banks issue pre-approval for 90 days. Some lenders stretch to 120 days or 6 months. Lenders don't go longer because your financial situation, lending criteria, and interest rates all move.

If pre-approval lapses, you re-lodge updated documents (usually fresh payslips and bank statements) and your broker resubmits. It's faster the second time if nothing's changed.

Things that kill pre-approval

Warning

6 things that can kill your pre-approval

1
Changing jobs or going on probation.
Do instead: sit tight until settlement.
2
Applying for new credit cards or BNPL.
Do instead: close unused BNPL accounts now.
3
Increasing existing credit limits.
Do instead: lower limits if you can.
4
Taking on a car loan or personal loan.
Do instead: wait until after settlement.
5
Missing a bill or loan repayment.
Do instead: set every bill to auto-pay.
6
Lender tightens criteria mid-search.
Do instead: stay close to your broker. They have alternatives.

The safest move between pre-approval and unconditional: change nothing. Lenders re-run the credit check before formal approval.

Lenders re-run a credit check before unconditional approval. Aussie Home Loans and Unloan both list job changes, new credit, missed payments, and tightened lender criteria as the most common reasons pre-approved loans get knocked back at the final hurdle. The safest move between pre-approval and settlement: change nothing.

Timeline

From a complete document pack to a pre-approval letter is usually 2–5 business days. NAB notes it can be "a few hours" with a clean application or "a few weeks" if anything needs follow-up. Two things slow it down: missing documents and unexplained transactions on your bank statements.

What pre-approval doesn't do

It doesn't guarantee the loan. Once you've found a place and made an offer, the lender still needs to:

  1. Value the specific property
  2. Re-verify your income and savings
  3. Run a final credit check
  4. Issue formal (unconditional) approval

That's why the finance condition in your contract matters. If full approval doesn't come through, the finance clause is what lets you walk away without losing your deposit.

What's next

If you don't have a broker yet, start there. They'll do the paperwork heavy lifting and shop your application across lenders. See our guide: How to choose a mortgage broker.

Once you've got pre-approval and you're house hunting, line up your conveyancer too. We review contracts before you sign, so get a fixed-price quote.

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