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What does unconditional approval mean?

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So you’ve found your dream home and have applied for a home loan to make this dream a reality. Before simply being handed the keys, there are a number of approval processes including both unconditional and conditional that first must be achieved.

What is unconditional approval?

There’s no strings attached when it comes to unconditional approval, meaning the lender has formally approved you for a home loan and there are no other conditions that must be met.

With unconditional approval, the lender has taken the time to formally assess all your paperwork, finances, and loan application and decided to offer you a home loan based on the property you have identified as the one you intend to purchase.

Lenders are required to formally notify you in writing at the time your home loan approval becomes unconditional.

What is conditional approval?

Conditional approval, also known as pre-approval, is the highest-level of home loan pre-approval where a lender provides an indication of how much they will let you borrow based on your current financial position.

The approval is ‘conditional’ meaning the lender is not guaranteeing they will provide the home loan - it is subject to any number of conditions.

These conditions can include:

  • Providing further information and documentation including bank statements dating back further than originally required, pay slips, a valuation of the property, or a completed sale contract from the property purchase.
  • Setting a specific home loan limit that you can borrow up to.
  • Waiting to provide unconditional approval until after you’ve found the property you wish to purchase.

While there is no guarantee you’ll be approved for the loan you apply for, conditional approval can provide peace of mind when hunting for your dream home. The process will provide a realistic picture of what you can afford, helping to avoid house hunting stress and disappointment that may potentially lie down the track.

Differences between unconditional and conditional approval

When it comes to navigating the differences between the two, conditional approval is given during the early stages of your home loan application when the lender performs a basic check of your finances and financial position. Typically with conditional approval, your lender requires more information to commit to lending you funds to purchase your dream property.

On the flip side of the coin, unconditional home loan approval means that your lender has performed a full review of your documents including your credit profile and is willing to provide you with a home loan.


Conditional and unconditional home loan approval doesn’t last forever, meaning it’s important to strike while the iron is hot.

Depending on the lender, both conditional and unconditional approval will typically last from three to six months. After this period, you would need to re-apply if you were unable to find a suitable property.

Lenders typically offer timeframes between three to six months to allow you to satisfy their requirements for conditional approval before moving to the unconditional approval stage.

What happens after unconditional approval?

Following unconditional home loan approval and your dream property dreams becoming a reality, the process of filling out home loan documentation comes next. It’s important to read through all documentation carefully with home loan, consulting a conveyancer or solicitor for necessary assistance.

Once all documentation is finalised, a pre-settlement inspection of the property can be performed to ensure it’s in the same condition as when you signed the contract of sale. Following a pre-settlement inspection, you’ll enter into the settlement period which typically lasts 30-90 days. This means the property ownership is being transferred from the seller to you, the buyer. Typically conveyancers or solicitors will facilitate this process, including picking up the keys.

Looking to purchase your dream home? Check out our range of competitive home loans or chat to one of our lending specialists today.

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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