PSA: Your pre-approval might not be what you think

A lot of buyers assume that once they’ve got a loan pre-approval, the bank is locked in. Unfortunately… that’s not necessarily the case.

Here’s why:

1. Not all pre-approvals are created equal

In some cases, lenders rely on automated assessments upfront, then complete a full credit assessment once you’ve found a property.

That means:

• Key details may only be properly reviewed later

• Complex or unusual situations might get picked up late

• You could already be financially committed by the time issues arise

  
  

2. Interest rate changes can reduce your borrowing capacity

Your borrowing limit is based on the current interest rate plus a lender buffer.

If rates increase after your pre-approval:

• Your assessed repayments go up

• Your borrowing capacity can go down

• If you were already at your limit, your approved amount may now be lower.

3. Proposed negative gearing changes add uncertainty

While not yet legislated, recent Budget proposals suggest changes to negative gearing, particularly for new purchases.

Why this matters:

• Many lenders factor in negative gearing benefits when assessing serviceability

• If those benefits reduce or disappear, lenders may assess you more conservatively

• This can lower the amount you’re eligible to borrow

So what?

You could be:

• Bidding at auction

• Signing a contract

• Making an unconditional offer

…based on a borrowing limit that no longer applies!

What should you do?

• Reconfirm your pre-approval amount, especially if it’s for an investment property and more than a few weeks old

• Don’t buy at your absolute max - give yourself a buffer

• Understand how policy changes may affect you (especially investors)

A pre-approval is a great starting point, but in today’s market it’s a moving target, not a guarantee.

If you want a quick check on where your borrowing capacity sits today (or how these changes might impact you), feel free to reach out.

Want A Loan is a Corporate Credit Representative (No. 490204) of BLSSA Pty Ltd ABN 69 117 651 760, Australian Credit License 391237.