Should I get pre-approved for the maximum I can borrow?

Not necessarily. A little above what you're seeing in the market is usually the sweet spot. It gives you room if the right place is slightly over budget without treating the bank's ceiling as your budget.

What happens if I find a place above my pre-approval?

The bank may need to reassess your application, which takes time. That's why it's worth setting the pre-approval a bit above your price range from the start.

Can I use less than my pre-approval amount?

Yes. Coming down in loan amount once you've found a place is the easy direction, and the bank generally just assesses the smaller loan.

How much does an extra $20k on my loan cost?

As a rough guide, an extra $20k of loan might add around $20 to $30 a week in repayments, depending on your rate and loan term.

Home / Straight Answers / How much to pre-approve

Straight Answers · First home

Should I get pre-approved for the max I can borrow, or just what I plan to spend?

Bayley Clarke · Mortgage broker on the road · Last checked 11 November 2026 · 2 min read

The short answer

With pre-approval, it's a lot easier to come down in purchase price and loan amount once you've found a place than it is to go the other way. So I like to buff the pre-approval up slightly from what you're actually seeing in the market.

Not to the max, and not to the exact dollar you plan to spend. A little above it, so that if the right place comes up slightly over budget, the bank doesn't need to do a complete reassessment of your pre-approval.

The 90 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

How I set the number with clients

We talk through roughly what you're finding in the areas you're looking at, price-wise. Then we look at your borrowing capacity and make sure everything stacks up. Say you're looking at places between $700k and $750k, and you can support a loan of around $900k.

Then I'll ask: what happens if something comes up at $770k, ticks every box and you really like it? That extra $20k of loan might mean another $20 or $30 a week in repayments. Would you go for it? The answer is probably yes. So the pre-approval goes in a bit above the range, not at the top of what you could borrow.

Why going up is the hard direction

If you're pre-approved for more than you end up needing, coming down is easy. The bank generally just sees a smaller loan against the place you found, and that's a simpler yes.

Going the other way is different. If you find a place above what you're pre-approved for, the bank may need to reassess your borrowing from scratch, and that takes time you might not have once you've made an offer. Building a small buffer into the pre-approval means they just see you found something at $770k instead of $750k, and it generally goes straight through. Keep it simple, stupid.

The honest bit: the pre-approval isn't your budget

Being able to borrow $900k doesn't mean you should spend $900k. The pre-approval amount is the bank's ceiling, worked out on their numbers. Your budget is what you're comfortable paying every week, and that's the number to shop with.

A pre-approval is also only a conditional yes. The bank still needs to value the property and confirm nothing has changed before it becomes a formal approval.

Want your pre-approval set at the right number?

A 30 minute call. We go through what you're seeing in the market, what you can borrow, and what that means in weekly repayments.

Book a 30 minute call Call 0437 189 939

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Next question

Do I need pre-approval before I look? How long does it last?

Not always. You need your numbers before you make offers, so you know where to aim and whether you'd be approved.