Before you apply, the number you need to know is how much you can realistically borrow. That is worked out from your income, spending, debts and current rates, and our guide to borrowing power explains how, or you can get a quick estimate from the borrowing power calculator. Start there so you shop in a realistic range.
Pre-approval: the shopping pass
Most people begin with pre-approval, sometimes called approval in principle or a conditional approval. You tell a lender your income, spending and debts, and it gives a conditional yes up to a figure and a term. That figure is what you can comfortably offer on a house, and it makes you a stronger buyer because sellers know you are already vetted.
Be clear on what pre-approval is not. It is a yes based on the information you provide, not a guarantee of a specific loan at a specific rate. The final approval still depends on the checks that follow and on the property you choose. In short, it is a budget-setting tool, not a done deal.
The documents you will need
Lenders ask for a fairly predictable set, so gather it before you apply and the whole process moves faster:
- Proof of identity. Photo identification, which the exact requirements will state.
- Proof of income. Recent pay slips for employees, and for self-employed borrowers a history of earnings or tax returns.
- Your bank statements. Recent statements that show your regular spending, so the lender can see your habits match what you told it.
- Evidence of existing debt. Any car loans, personal loans or credit card limits, because these reduce what you can afford.
- Proof of your deposit. Where the deposit is, and where it came from, since lenders need to confirm the money is genuine savings or gifts and not new debt.
Be upfront. A lender runs a credit check and will find debts you did not mention, and hiding them hurts your credibility more than the debt itself. Clean, consistent statements and honest answers are the fastest route through this step.
The property valuation
Once you have found a place and your offer is accepted, the lender arranges a valuation to confirm the purchase price is reasonable and the property is suitable security for the loan. A valuer inspects the home and reports on its location, condition and how the price compares with similar recent sales in the area.
This matters more than most people realise, because the bank lends against the valuation, not necessarily the price you agreed to pay. If the property values lower than your offer, your loan-to-value ratio changes and you may need a bigger deposit to make up the gap. Our guide to buying your first home covers the deposit and cost planning side of this in full.
Full credit approval and the fine print
With the valuation done, the lender runs the full credit check and pulls everything together: your file, the property, the loan amount, the rate and the term. If it is satisfied, it issues a formal offer. Do not skim that letter. It sets the conditions you must meet before the funds release, such as anything specific to the property, your income, or the source of your deposit, and it locks in the rate, the fees and the term.
Turnaround times and the exact checks vary between lenders, and a broker can help you compare offers, but the steps are largely the same wherever you apply. The mortgage repayment calculator is useful while you weigh different rates and terms before you commit.
Settlement day
Settlement is the day ownership transfers to you and the lender releases the funds. Your lawyer or conveyancer handles the process: the seller's legal team confirms the property details, the bank releases the loan, and the money changes hands. When everything clears, you get the keys, and your first mortgage repayment starts on the agreed schedule.
After settlement your mortgage is a live account. Extra repayments and an offset account can cut the interest you pay, and our guide to offset accounts explains when that beats simple extra payments, with an offset and extra repayment calculator to model it.
Pre-approval tells you what you can afford to offer. Your documents and the credit check verify who you are. The valuation fixes how much the lender will advance against the property. Settlement hands over the keys. Keep the process linear, gather the paperwork early, and confirm current timeframes and fees with your lender, because they change.