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Pre-approval or unconditional approval: which one actually lets me sign?
Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 3 min read
The short answer
Unconditional, or formal, approval is the one that actually lets you sign. That's where you put pen to paper on the loan documents. Pre-approval, honestly, sometimes isn't worth much more than the piece of paper it's written on.
As brokers, we pre-qualify you before anything goes to a bank. We don't send you for pre-approval if we don't think it'll be approved. So pre-approval is the bank confirming what your broker already worked out about your finances. Once you've found a property and your offer is accepted, that's when formal approval happens.
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What pre-approval actually is
Part of the work we do up front as brokers is pre-qualifying you. We look at your income, your expenses, your debts and your deposit, and we work out what you can borrow and which banks will lend it to you. We're not going to send you to a bank for pre-approval if we don't think it's going to get approved.
So the pre-approval is simply a piece of paper from the bank saying, look, what your broker told us about your financial world checks out, and here's roughly what we'd lend you. It's a useful signal for you and for agents, but it's conditional. It doesn't cover a specific property, because you haven't found one yet.
What unconditional approval is
Once you've found a property and had an offer accepted, the bank does the rest of the work. It values the property, checks your payslips and statements are still current, and issues formal approval, also called unconditional approval. That's the bank committing to lend on that specific property, at that price, to you, and it's the approval that actually counts.
That's where you actually put pen to paper. You sign the big, long bank documents, the loan contract with all the terms and conditions, and you commit to the loan. Until then, nothing on the loan side has been signed and the bank hasn't committed to that property. Pre-approval is the warm-up. Unconditional is game on.
So should you bother with pre-approval?
I do them. For a lot of people it doesn't change too much, because the real work was done when we pre-qualified you. Where it helps is confidence: knowing a bank has looked at your file means you can make offers knowing your numbers are real, and some agents take you more seriously with one in hand.
What it doesn't do is guarantee the loan. A pre-approval can still fall over at formal approval if the valuation comes in low, your circumstances change, or the property itself is something the bank won't lend on. That's why the pre-qualifying matters more than the pre-approval paper, and why I'd rather spend the time up front getting your file right.
The honest bit: the paper matters less than the prep
Pre-approval gets talked about like a golden ticket. It's not. It's a bank agreeing, in principle, with work your broker has already done. If that work was done properly, the pre-approval rarely tells you anything new.
Where people get caught is treating pre-approval as if it were unconditional. If you're about to sign a contract you can't get out of, like at auction, know the difference before you raise your hand.
Want to know where you actually stand?
A 30 minute call. I pre-qualify you properly, tell you what you can likely borrow and which banks fit, and whether a pre-approval is worth getting for you.
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How long does it all take, and who does what before settlement?First chat to keys, step by step: discovery, pre-approval in a couple of days, offers, the contract and conveyancer, valuation and full approval,.
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The full guide: How to buy your first home Pre-qualified, pre-approved, conditional, unconditional: what do the stages actually mean? What will my repayments be per week? My pre-approval was from back in June. Does it still count after all these rate rises? How do I make an offer, and who does the agent work for?Not your question? Book a call and ask it, or call 0437 189 939.