Home loan pre-approvals explained:
the what, why, when and how

Euphoric girl at home, looking at computer screen

Your home loan pre-approval is an important step in your home-buying journey. It gives you an indication of how much you can borrow, plus, it helps you bid with confidence when you find the right property. 

Our guide gives some tips and tools to help you make the right decision for your situation. 

What is a home loan pre-approval? 

Pre-approval, indicative approval and approval in principle all mean roughly the same thing - that your lender has agreed in principle to lend you a certain amount of money. To do this, they assess your financial situation and determine how much you can afford to borrow. It’s important to remember that pre-approval is not a guarantee of funds. It’s an indication that unless your circumstances change, that you’re likely to have your loan approved. So you can start the exciting part of the home loan journey - looking for a new home!  

Once you’ve found your property, your lender will carry out a property valuation and reassess your personal finances before granting conditional approval – the final step towards securing your home loan. 

Did you know? 

Getting home loan pre-approval can be as quick as 2 business days if you provide all the required documentation upfront.

Why do people apply for home loan pre-approvals?

Pre-approval gives you an indication of how much you’re able to borrow.

Sellers and real estate agents also look at pre-approvals favourably. It shows you’re a serious buyer, and less likely to withdraw an offer due to a lack of finance – which might give you an edge if you want to negotiate an offer. 

Hint: If you’re bidding at an auction, it’s important to know what your upper limit is when you’re bidding.


When’s the right time to apply? 

when's the right time to apply

Most people apply for home loan pre-approval when they are ready to start looking at buying a property. But before you apply, it’s wise to keep a few things in mind.

Applying for multiple pre-approvals from different lenders in a short time frame can impact your credit score – so it’s a good idea to choose your preferred lender first.

Pre-approvals generally expire after three or six months, though most lenders are willing to extend if your situation remains the same.

Your lender will need to reassess your application if your circumstances change – for example, if you change jobs, have a baby, or take out a personal loan.


How long does pre-approval take? 

How long does pre-approval take?

Although the end-to-end Pepper Money home loan application process can take up to six weeks, getting home loan pre-approval can be as quick as 2 business days if you provide all the required documentation upfront.

Home loan pre-approval requirements include recent bank statements, payslips or other proof of income, personal identification and a summary of your assets and liabilities (such as savings and other loans).


We’re here to help

To get a home loan pre-approval with us, contact one of our Lending Specialists on 137 377 or request a call back by filling in our online form. They will guide you through the process, explain your options, and answer any questions. Alternatively, speak with your Pepper Money accredited broker.

It’s useful to have the following information on hand when you do chat with us:

  • the price range of the properties you’re looking at
  • how much deposit you have available
  • details of your income and living expenses.


Alternatively, to get an estimate of how much you could borrow with Pepper Money try our borrowing power calculator today.

Apply for a Pepper Money Home Loan

Want to find out where you stand?

We've got the online tools and calculators to help get your home loan journey underway. Work out how much you may be able to borrow and even quickly find out what indicative interest rate you might be eligible for.

Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.

All applications are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. 

The results of the borrowing power calculator are based on information you have provided and is to be used as a guide only. The output of the calculator is subject to the assumptions provided in the calculator (see 'about this calculator') and are subject to change. It does not constitute a quote, pre-qualification, approval for credit or an offer for credit and you should not enter commitments based on it. The interest rates do not reflect true interest rates and the formula used for the purpose of calculating estimated borrowing power is based on the assumption that interest rates remain constant for the chosen loan term. Your borrowing power amount will be different if a full application is submitted and we complete responsible lending assessment. The results in the calculator do not take into account loan setup or establishment fees nor government, statutory or lenders fees, which may be applicable from time to time. Calculator by Widgetworks.

Pepper Money Personal Loans is a brand of Pepper Money Limited. Credit is provided by Now Finance Group Pty Ltd, Australian Credit Licence Number 425142 as agent for NF Finco 2 Pty Limited ACN 164 213 030. Personal information for Pepper Money Personal Loans is collected, used and disclosed in accordance with Pepper’s Privacy Policy & the credit provider’s Privacy Policy.

Pepper Money Limited ABN 55 094 317 665; AFSL 286655; Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans.

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