What should you do if your loan is declined after pre-⁠approval?

A loan decline after pre-approval doesn't always end the purchase. Start with any contract deadline and the lender's reason for saying no.

Our brokers and credit analysts can check the finance options while your solicitor checks the contract. Before applying again, check what would change the result and whether the lender has enough time to assess it.

1. Call your solicitor or conveyancer. Confirm the finance deadline, settlement date and any notice needed under your contract.
2. Ask the lender for the reason in writing. Put the decline beside the pre-approval letter and check what changed.
3. Gather the evidence before applying again. The right next step depends on whether the issue is the property, valuation, income, debts, deposit or an incomplete first assessment.

Your broker can work on finance while your solicitor handles the contract. If another lender is an option, compare the repayments and cash left after settlement too.

If you've signed, read what happens to your contract and deposit before you give any notice.

The lender may be checking the detail for the first time. It might find salary packaging, a novated lease, parental leave income or a scheme condition that wasn't fully assessed earlier.

For a property issue, ask whether the lender rejected the address, reduced the maximum loan or accepted a lower value. Gather the contract, plans, property details and comparable settled sales before you challenge a bank valuation. The apartment mortgage guide covers extra checks for units.

If the lender rejected the building rather than the unit, read why a bank can reject an apartment building.

If the lender gives only a broad internal credit or commercial reason, do not guess that fraud or bad credit caused it. Ask for its explanation and complaints process, and check your credit reports. For a decline that did not follow pre-approval, see the home loan decline guide.

Ask the lender which rule or piece of evidence caused the decline, then check your payslips, statements, tax returns and credit report for errors or missing commitments. Until the next application, keep paying bills on time and avoid new credit.

We compare lenders' rules for the issue behind the decline, such as a valuation shortfall, credit entry or income type. Then we check the documents and timing before suggesting another application.

• Document your income accurately, including how overtime, bonuses or salary packaging are paid.
• Check the deposit and buying costs, including evidence of any family gift.
• Check whether reducing a debt would help, and what cash that would leave for the purchase. Declare every commitment.

Some problems can be fixed with a document or explanation. Others need more income history or an improved credit record. We'll check when another application makes sense and avoid unnecessary credit enquiries.

Find the reason you're dealing with: income and work, debts, credit and spending, deposit and savings, property and insurance, or assessment and approval conditions.

A new job can change the lender's assessment, even with a pay rise. It will look at your employment type, time in the role and earlier work history.

The lender may need to check:

• Employment type matters: Full-time versus casual can affect approval chances.
• Time in role: Minimum employment history varies by lender and employment type. Some can consider a new role using your contract, payslips and earlier industry experience.
• Industry experience counts: Banks often look at your broader work history, not just the latest job.

Read more: Can I get a home loan if I just started a new job?

Before relying on your approval after a job change:

• Tell your lender early: Being upfront helps avoid surprises at the final assessment.
• Document your experience: Provide pay slips and employment history to show stability.
• Ask your broker which lenders can consider your new role and previous work history.
• Check contract deadlines: Ask your solicitor or conveyancer how the job change and delayed finance affect your finance clause.

We can check which lenders will consider your new role and what evidence they'll need.

Less than 12 months in a contract role can limit your options. The lender will check the contract's length, your income and whether the work is likely to continue.

First, check how you're paid:

• Pay as you go (PAYG) contractors: your employer withholds tax from your pay. Paid leave depends on whether your employment is permanent, fixed term or casual.
• Self-employed contractors: you invoice through an Australian Business Number (ABN) and cover your own tax, super and business expenses.

A short contract history can be a problem for some lenders. Others may consider continuity in the same industry, contract renewals and the evidence of ongoing work.

A lender may need more evidence if you have:

• Short remaining contract terms
• Gaps between contracts
• Irregular income patterns
• Limited history in contracting

These are lending categories. An ABN, invoice or job title alone doesn't decide your legal employment status. Ask what documents the lender needs for your arrangement.

• Provide your full contract and extension history
• Show consistent work in the same industry
• Demonstrate stable income across multiple months
• Ask which lenders can consider your contract history and income records.

Check the lender's contract-income rules before applying, particularly if you've recently changed how you're paid.

Read more: How to get a home loan on contractor income

Some lenders want more business history or different financial records than others. Check what the bank couldn't accept before applying again.

Common issues include:

A fall or sharp change in business profit may need explaining.

An Australian Taxation Office (ATO) payment plan may affect the money available for repayments.

Missing or outdated tax returns and financial records may leave the lender unable to verify your income.

Ask which financial years the lender used and whether it averaged them, used the latest year or relied on the lower income figure. Compare that with your current business results before another application.

• Keep your tax returns and financial records up to date
• Disclose any ATO payment plan and provide its terms, balance and repayment record. Ask your accountant about tax obligations; do not miss tax payments to improve a loan application.
• Maintain consistent business income records
• Work with a broker experienced in self-employed lending

Having those records ready helps us compare lenders before submitting another application.

Read more: Self-employed finance options for business owners

Your job title doesn't tell the lender everything it needs to know. How you're paid and whether the income will continue matter too.

After you choose a property, the lender finishes the checks for formal approval. It may also make checks before settlement.

Depending on the evidence, the lender may:

Ask for additional payslips, contracts or income history.

Use a lower income figure, which can reduce the loan amount.

Check whether the work and pay are likely to continue.

Tell your broker about changes to your hours, contract, overtime or employer.

Unpaid leave can change the income shown on your latest payslip. Casual and contract workers may need to explain the gap during the final assessment.

Permanent employees generally have paid leave. Casual employees and self-employed contractors generally don't. For PAYG contractors, leave depends on the employment arrangement.

• The lender may request your most recent payslip before unconditional approval.
• If that payslip shows low or nil income, the lender may ask for more evidence or use a lower income figure.
• A reduced income can lower your borrowing capacity.
• That may lead the lender to decline the loan at final assessment.

A relief teacher earning strong income throughout the year applies during the Christmas break. Because no shifts were worked, the latest payslip shows no income.

A calculation based only on that payslip could miss the teacher's usual earnings. A longer income history can help explain the gap, depending on what the lender accepts.

If your income has paused temporarily, ask what evidence the lender will accept to show your usual earnings.

Overtime, shift loading and bonuses can make up a large part of your pay. If the lender uses less of that income at final assessment, your loan amount can fall.

Lenders may count different amounts of overtime, shift loading and bonuses. The result depends on the type of pay, your role and the history you can show. Voluntary extra super contributions can need a separate check.

That can leave the lender's income figure well below what you earn.

Nurses often rely on overtime and shift loading as a core part of their pay.

Changing shifts can make your pay vary from month to month. The lender needs enough history to decide how much of that pay it can use.

We check how much of each type of extra pay the lender will accept, and the records needed to support it.

We usually start with:

• Your 2 most recent payslips
• Your latest income statement or PAYG payment summary
• In some cases, a letter from your employer confirming regular overtime for 1 to 2 years

Ask the lender to show the base pay, overtime, allowances and bonuses it counted. Then compare that accepted income with the records you can provide. Different kinds of extra pay may need different evidence.

Lenders differ in whether they'll use rideshare or second-job income, how much they'll count and the history they need. If it wasn't fully checked at pre-approval, your final borrowing amount may change.

The lender needs evidence that the extra income is likely to continue. A second employed job and rideshare work through a business need different records.

Some lenders want at least 12 months of history. A PAYG second job can have different rules from self-employed gig work. Ask which policy applies to you.

For a second employed job, ask which payslips and employment history the lender needs.

If you earn through a business, it may need tax returns, ATO notices, business activity statements or business account records. Check the periods required before collecting the documents.

Your bank used the income you earned when it issued pre-approval. Fewer shifts, a lost bonus or reduced hours can lower that figure at the next assessment.

The lender may ask for recent payslips before final approval. Lower earnings can reduce the amount it will lend.

A lender might estimate annual income from weekly pay or from earnings since the start of the financial year. Ask which method it used and whether a longer pay history would change the result.

To explain a temporary drop, have these records ready:

• Your 2 most recent payslips
• Your latest income statement or PAYG payment summary
• Your most recent tax return (if available)
• A clear explanation for the temporary drop

Show the longer income history and explain the change. Then check which lender can use that evidence.

Read more: Loans for people with unique employment

Working for family may mean extra checks on your job and pay.

Tell the lender who in your family owns or runs the business. Ask which extra documents it needs to verify your job and pay.

It may want to confirm:

• That your income is genuine and ongoing
• That your role isn't created just to help secure a loan
• That you're paid at market rates and under normal conditions

This can mean providing additional documents such as:

• An employment contract outlining your role and pay
• Payslips and bank statements showing consistent income
• Evidence the business is financially viable (like BAS or financial statements)
• A letter from the employer confirming your position and hours

We'll check which lender will consider your arrangement and gather the records it needs.

Lenders commonly use only part of the rent to allow for vacancies and property costs. The percentage depends on the lender, the property and the evidence. Short-term letting, boarder income and a standard residential lease can be assessed differently.

Short stays through Airbnb or Stayz, student accommodation and serviced apartments can be assessed differently from a standard lease. Ask how much of the rent the lender will count, and which lease, agent or platform statements, tax returns and expense records it needs.

If rental income caused the decline, check which part the lender couldn't use. We can compare that with another lender's requirements.

Your pre-approval is based on the income and debts the lender assessed at the time.

A new credit card, higher card limit or car loan can change that calculation.

Banks assess credit cards using the full limit. An unused card with a $10k limit can still reduce what you can borrow.

If the new commitment reduces the loan amount, check whether you can still cover the price and buying costs before relying on your pre-approval.

The lender may recheck your credit record and debts before settlement.

If the new debt leaves too little income for repayments, the bank may:

• Reduce the amount they're willing to lend
• Ask for more funds upfront
• Or decline the loan altogether

• Check with your broker before applying for new credit.
• Ask what reducing an unused card limit or closing a buy now, pay later account would change.
• Compare debt repayment against the cash you'll need for the purchase before paying extra.

Read more: How do I increase my borrowing capacity?

Several recent credit applications can raise questions with a lender, even if you've paid your bills on time.

There isn't a universal rule that 2 or 3 applications mean a decline. The lender looks at their type, timing and reason alongside the rest of your application.

Credit enquiries can come from more than loan and card applications.

A phone plan, utility account, buy now pay later account or interest-free purchase may involve a credit check. Ask the provider whether it records an enquiry before applying.

Several enquiries can make a lender ask whether you're seeking more credit because money is tight.

When they see too many recent checks, they may:

Ask for more detail about the applications and any resulting debts.

Use the enquiries as part of their own risk assessment.

Decline if the application doesn't meet its requirements.

Explain why you applied. Moving house, changing utilities or upgrading a phone may help account for entries on your report.

Some lenders give more weight to the full application than to an automated score.

Get your credit report and check for errors. Explain the purpose of recent applications and which accounts are still open. We can compare lenders using that full picture before another application.

Read more: What positive credit reporting means to home loans

An unpaid phone bill can cause problems if it becomes a default on your credit report.

A reportable consumer-credit default generally needs to be at least $150 and 60 days overdue, with required notices given. A single late bill is not automatically a listed default, but the lender may still ask about unpaid debts or account conduct.

When a telco debt appears on your credit report, check the facts before choosing a lender:

Check whether the entry is correct, then find out what evidence the lender needs to consider it.

A credit issue can limit your options. The explanation, payment record and lender's policy all matter.

• Get your credit reports and check the entries.
• Consider credit file alerts through Equifax.
• Dispute incorrect defaults.
• Check lenders that consider more than an automated score.
• Review the evidence before another application.

Call 1300 088 065 with the lender's reason for declining and your credit report. We can check what needs to change before another application.

Read more: What happens if I have a bad credit history?

A lender may check your rental payment history as part of the application.

A lender may ask for a tenancy ledger, particularly when rent helps support a small-deposit application. The period required varies by lender; 12 months is not a universal rule.

Explain a missed or late payment. The lender will consider the reason and the rest of your rental record. One late payment doesn't automatically mean a decline.

From a bank's point of view, late rent can suggest:

• Poor money management
• Cash flow issues
• Higher risk of missed mortgage repayments

If there's an explanation for a late payment, back it up with records.

• Explain any timing issue or transfer delay that actually occurred.
• If the funds were in another account, provide evidence.
• Provide evidence of any admin error or direct debit failure.
• Provide the complete rental record, including any other late payments.

Ask the lender what evidence would address its concern before making another application.

Banks commonly ask for 3 months of everyday account statements; some ask for 4. They use them to check your spending alongside what you've declared.

Large or regular discretionary spending can leave less money for repayments. A lender may also ask about gambling transactions or spending patterns it can't explain.

A lender may use recent transactions to estimate yearly living costs. An unusually expensive month can make that estimate too high unless you explain it.

Explain unusual costs and provide the statements that show your normal spending.

Point out recent holidays, once-off purchases or travel costs, and make sure your declared expenses match your statements.

A lender still needs to check that your usual spending leaves enough for repayments.

Many lenders use a credit score as part of their assessment. Factors they may consider include:

• Number of credit enquiries in the past 3 to 6 months
• Types of finance you've applied for in the past 12 months
• Overdue or defaulted debts in the past 5 years
• Bankruptcy information, which generally remains on a consumer credit report for the later of 5 years from bankruptcy or 2 years after it ends.
• Reportable defaults from utilities and phone providers
• Interest-free or Buy Now, Pay Later loans like AfterPay
• Court writs or judgments

Paying a correctly listed default changes its status but doesn't automatically remove it. The lender may also keep its own account records.

Check what caused the credit-score decision before trying another lender.

Ask how many months of statements the lender needs, and include all your accounts and debts. An account left out of the application can raise questions when repayments appear in your statements.

An old store card can be easy to forget, especially if you haven't used it for years. An undisclosed account may still cause the lender to decline the application.

• Check your credit report: Ask for a copy and review enquiries and open accounts. Also check your own records for older accounts.
• Review day-to-day statements: Your broker can go through your accounts with you to check for credit cards, Afterpay accounts or other debts left out of the application.

A lender can misunderstand a transaction. Shopping at Baby Bunting, for example, might prompt a question about dependants even if you were buying for someone else.

Before making an offer, recalculate the cash available for the price and buying costs.

If your deposit has fallen, your purchase budget may need to change. You may need more funds, a smaller loan or extra LMI.

Compare these options before using more of your savings:

• Ask whether a smaller-deposit loan or family guarantor option is suitable. Some eligible buyers may borrow up to 95% of the property value, and a guarantor may sometimes support a higher amount. You still need to cover buying costs, meet the lender's requirements and understand the guarantor's obligations.
• Consider a gifted deposit from parents or family to cover the shortfall.
• For an eligible new home in Queensland valued below $750,000 including land, check whether you qualify for the $30,000 Queensland First Home Owner Grant. Confirm its payment timing before counting it towards funds due under your contract.
• If you have not signed a contract, consider a lower purchase price. If you have signed, ask your solicitor before seeking any change to the agreed price.

We can compare the options using the deposit you have now.

Read more: How much is the First Homeowners Grant?

With a smaller deposit, the lender may ask for genuine savings: money you've saved and held over time.

Where genuine savings are required, a lender may ask for 5% of the purchase price held for at least 3 months. The amount, holding period and acceptable alternatives vary by lender, insurer and application.

Some lenders accept other evidence when you have less than a 10% deposit. Depending on their rules, this can include:

• Equity held in other properties
• Rental history over at least 6 months
• Term deposits
• Shares held

Ask which savings rule applies to your deposit and property. A loan decline can sometimes come down to evidence the lender couldn't accept.

Ask whether genuine savings are required for your loan, what counts towards them and how long the lender needs to see the money held. Rental history may help meet the evidence test, but it doesn't provide the deposit money.

If the lender accepts rental history, it may ask your agent to confirm:

• Full names of tenants
• Property address you rented
• Start date of tenancy
• Rent paid per week, fortnight, or month
• Your payment history, including any late or missed payments

Did the valuation come in low? A lower accepted value can reduce the loan and increase the cash you need. Read how to challenge a bank valuation.

With less than a 20% deposit, you may need lenders mortgage insurance (LMI). Waivers, government guarantees and other exceptions can remove that cost.

If the loan needs an insurer's approval, you must meet its rules as well as the bank's. An insurer condition can still stop the loan after pre-approval.

Mortgage-insurer criteria can differ from the lender's own rules. The assessment may include:

• Size of your deposit
• Property type and location
• Employment stability
• Credit profile and history
• The size of your loan compared with the property value (the loan-to-value ratio, or LVR)

So, even when the bank is comfortable, the insurer may still say no.

Check whether the loan needs lenders mortgage insurance and which insurer conditions remain. If you may qualify for a waiver or government guarantee, compare that option before relying on the earlier approval.

Read more: What is lenders mortgage insurance and how do I calculate it

A large apartment complex may need extra checks. Lenders look at unit numbers, storeys, postcode and how many loans they already have in the building. A Brisbane CBD address alone doesn't mean a decline.

The lender may restrict loans based on:

• Suburb or postcode
• Buildings over four storeys
• Small apartments (especially under 40sqm)
• How many loans it already has in the building

These examples show the types of limits to check. The result depends on the apartment and your application.

Send the specific address, internal floor area, title and contract to your mortgage broker. Check whether the lender will accept the building and what deposit it needs before making an offer.

Some lenders may consider a loan up to 95% of the apartment's value. Check the exact building and application before relying on that amount.

Flood exposure varies within a suburb and from property to property.

Flood risk can affect the valuation, insurance and lender's decision. A 1% Annual Exceedance Probability (AEP), also called Q100, means a 1% chance of that size flood in any year. It doesn't mean a flood happens only once every 100 years.

• Check the exact address and floor levels using the council's Flood Awareness Map and a FloodWise Property Report.
• Check the cost and availability of flood insurance before making an offer.

Some lenders may consider the property with:

• Comprehensive flood cover insurance
• A satisfactory property valuation or survey report

The lender still needs to accept the property's flood risk, valuation and insurance.

Read more: checking flood risk before you buy.

A home needing major repairs may fall outside the lender's property rules, even with pre-approval.

Missing kitchens, damaged bathrooms or structural problems can stop a loan. This can be harder with a deposit below 20%.

What banks look for

Whether the lender accepts a home needing repairs depends on what is wrong and how serious it is. Check:

• How bad is the house? Is it structurally sound?
• Are the issues cosmetic or major?
• What will the repairs cost, and how will they be funded? There is no universal $50,000 acceptance threshold.
• Can you provide quotes or a building contract for the renovations?
• Will you be able to live in the house while renovating?

Before making an offer, send the lender the property details and repair quotes. Check whether it can fund the purchase and the work needed.

Read more: Renovation loans: the complete guide

Your income can stay the same and your borrowing limit still fall. A change in the lender's assessment rate is one possible reason.

The lender tests repayments at a higher rate than you'd pay. The extra rate used for that test is called the assessment buffer.

For a standard new home loan, APRA-regulated banks generally test repayments at least 3 percentage points above the actual rate. A lender may also set a minimum assessment rate. Limited exceptions exist, but you need to qualify for them.

The assessment rate is used to check what you could afford. It isn't the interest rate you pay.

Ask which assessment rate the lender used and whether it will reassess the application before formal approval. The rate used can change while you are looking for a property.

At a higher assessment rate, the lender tests larger repayments against the same income. That can reduce your borrowing limit. Ask for a fresh calculation using your income, debts, expenses and proposed loan term.

If the assessment rate rises before final approval, the lender may decide your income no longer supports the loan amount.

Tell your solicitor if this puts the purchase at risk. Any option to renegotiate or leave the contract depends on its terms.

If you're worried about a rate change affecting your final approval, take these steps:

• Ask whether the lender will recalculate repayments at final approval.
• Check whether any assessment settings stay in place, and under what conditions.
• Tell your broker if the lender changes rates.
• Leave room below the maximum you could borrow.

Recheck the amount you can borrow if the lender's assessment rate changes.

A lender can change its rules while your pre-approval is active. Ask whether the new rule applies to your application before committing to a property.

If an existing CommBank pre-approval changes, check the application date and what has changed since it was issued. Applications already in progress, including Home Seeker pre-approvals, can keep their earlier HELP treatment if they meet the rules for acceptable changes. A change in policy does not automatically mean your pre-approval is lost.

For new applications under the 5% Deposit Scheme from 25 September 2026, the lower assessment buffer for HELP debt expected to clear in more than 1 year and within 5 years is unavailable. The buffer is the extra interest rate used to test repayments. Eligible borrowers can still use the separate option for debt expected to clear within 12 months.

Send us the pre-approval and the changes you are planning so we can check the amount again. Our HECS and home loans guide explains how the two options differ.

Ask your broker what the change means for your application:

Does the new rule apply to my existing application?

Could the changes I'm planning trigger a fresh assessment?

What documents do you need, and can the lender meet my finance deadline?

Get the updated borrowing figure before changing your offer or finance plans.

The lender may not have checked everything when it first issued pre-approval.

Conditional approval, indicative approval, approval in principle and Home Seeker can involve different checks. Read the conditions on your letter.

Our guide to what home loan pre-approval actually covers shows which checks are usually finished and which still depend on the property.

Some lenders begin with a basic credit check and verify the documents later.

Once you've found a property, the lender can complete the remaining checks, including:

• Payslips and income information
• Bank statements and savings
• Existing debts and other financial commitments

Ask which checks are complete and what could still change the loan amount.

If LMI is required, check what the lender and insurer still need to approve. The property must also be accepted. Before bidding at auction, get contract advice from your solicitor and check the remaining finance conditions with your broker.

Many pre-approvals last around 3 months and some up to 6 months. Use the expiry date on your own letter.

If you find a property after your approval expires, ask what is needed to renew it before relying on the old amount. The lender may request updated payslips, bank statements, identity documents or a new assessment.

Different banks handle expired pre-approvals differently:

• Some may simply confirm that your financial position hasn't changed over the past 90 to 180 days.
• Others may require all new supporting documents, including payslips, bank statements, and identification.

Updated figures can change the result. We can check the requirements before you rely on the old approval.

Age alone doesn't decide whether you can get a home loan. If the term runs into retirement, the lender may ask how you'll make repayments or clear the balance.

There is no universal cut-off at 45. The lender checks your income, assets, loan term and repayment plan.

If repayments will continue into retirement, the lender may ask for evidence of how you'll afford them or clear the remaining debt. Depending on your position, it may consider:

• Downsizing to a smaller home once you reach retirement age
• Selling investment properties or shares to free up funds
• Using recurring income from your superannuation to make repayments
• Accessing funds from your superannuation to pay down the loan

Ask which part of your retirement repayment plan the lender couldn't accept. We can compare the evidence it needs before you apply elsewhere.

Call your solicitor or conveyancer as soon as the loan is declined. They can check the contract deadline and whether you can seek an extension or end the contract.

• You may lose the deposit if you can't meet the contract or give the required notice.
• Failing to settle can lead to default notices, termination or legal action.
• The seller may claim losses beyond your deposit, including a lower resale price.

• Many Queensland private residential purchases have a 5 business day cooling-off period. Auctions and some other contracts are excluded. The period can also be shortened or waived.
• For an eligible Queensland contract, the seller may deduct up to 0.25% of the price if you properly terminate during cooling-off. Other states have different rules.
• A finance condition may give you a right to terminate, depending on its wording, your compliance and the notice you give.

• A finance clause sets its own conditions and notice process. A lender's decline doesn't automatically pause the contract.
• If there's no right to exit, your deposit may be at risk and the seller may be able to claim further damages.

• Tell your solicitor and broker immediately.
• Ask your solicitor who must receive formal notice and by when. Telling the agent or lender alone may not meet the contract.
• Keep the written decline and provide any other evidence your finance condition requires.

Ask your solicitor or conveyancer to:

• Check whether your contract protections still apply.
• Give any required notices within the deadline.
• Advise on your deposit and options under the contract.

At the same time, ask your broker to:

• Check whether another lender can consider the application within the time available.
• Compare any specialist or non-bank options that may fit.
• Review the income evidence, deposit and debts against the next lender's rules.

Once finance is approved, follow the home loan process guide for loan documents, settlement checks and collecting the keys.

• First home buyer guide
• Queensland First Home Owner Grant: are you eligible?
• LMI waivers explained
• 22 mistakes nearly all first-home buyers make
• 16 hidden costs of buying a home in Brisbane

Client examples are based on real situations. Names and identifying details have been changed.