What is a Pre-Approval?


A pre-approval is also known as a conditional approval (St George Bank & ANZ), indicative approval, approval in principal (Westpac uses the acronym AIP) or Homeseeker (CBA).

It is only an indication from a lender that they are willing to approve your loan when you lodge a full application. In the vast majority of cases, a pre-approval is not fully assessed by the lender and often hasn’t even been to their credit department or their Lenders Mortgage Insurer!

The lender is under no obligation to formally approve your loan when you find a property.

It is common for most people to seek a pre-approval before looking for a property to buy. This way they know that they have the finance to fund the purchase and can make an offer on a place that they like. Some people choose not to get a pre-approval and in doing so are taking a risk because they have no indication that they can get approved for a loan.