Pre-approval gives you a borrowing limit to shop with. A lender has looked at your income, expenses, debts, savings and credit history and agreed in principle to lend up to a set amount. It helps you set a realistic price range and shows agents and sellers that you are a serious buyer.
It is not a guarantee. Before formal approval the lender still needs to value the property you choose, check that nothing in your circumstances has changed and confirm the loan fits its policy. Pre-approval also does not commit you to that lender or that loan.
A proper pre-approval is assessed on your documents, not just a quick online form. Expect to provide payslips or tax returns, bank statements showing your savings and spending, details of any debts and identification. The lender checks your credit report and tests whether you could still afford the repayments at a rate at least 3 percentage points above the loan rate, the serviceability buffer APRA expects banks to apply.
Each credit application is recorded on your credit report, and too many in a short period can lower your credit score. That is a good reason to apply with a lender you are likely to use rather than collecting pre-approvals from several banks. A broker can compare lender policies first and then lodge one well-prepared application.
Pre-approvals typically last three to six months, depending on the lender. If you have not found a home by then, they can usually be renewed, but the lender will want updated payslips and statements and will reassess you on its current policy and rates.
Changes that can undo a pre-approval include a new job or a change in hours, a new car loan or credit card, a fall in savings or a change in the lender's own policy. If anything changes while you are looking, tell your broker before you sign a contract, not after.
Pre-approval does not lock in an interest rate either. Rates can move while you search, and a higher rate reduces how much a lender will lend, so it is worth a quick check with your broker before you make an offer if rates have changed since you were pre-approved.
In South Australia there is no cooling-off period when you buy at auction. Once the hammer falls you are bound by the contract, so you need to be confident about your finance before you bid. Pre-approval, plus a review of the contract and Form 1 by your conveyancer, is the minimum preparation. Because pre-approval is still conditional, keep a margin below your limit and talk to your broker about the specific property before auction day.
In a private sale your contract can include a finance clause that lets you withdraw if formal approval is not granted by an agreed date. Having pre-approval in place makes it more likely that approval comes through within that window, and it can make your offer more appealing to a seller than one from a buyer who has not started the process.
If you plan to use the Australian Government 5% Deposit Scheme, you need to apply through a participating lender. Since 1 October 2025 the scheme has no income caps and no limit on places. In SA the property price cap is $900,000 in Adelaide and regional centres and $500,000 elsewhere, and both the price and the lender's valuation must be within the cap.
First home buyers should also factor SA stamp duty rules into their budget. There is no stamp duty on an eligible new home or vacant land to build on, but an established home attracts full duty at the general rates. That difference can change how much deposit you need for the same pre-approved loan amount.
Jason and Steve are Adelaide mortgage brokers who give honest advice at no cost to you. No obligation.
The information on this page is general in nature and does not constitute financial advice. Given Finance Pty Ltd (t/a Lendology) ACN 624 144 501 is authorised under LMG Broker Services Pty Ltd Australian Credit Licence 517192.