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Pre-qualified, pre-approved, conditional, unconditional: what do the stages actually mean?

Bayley Clarke · Mortgage broker on the road · Last checked 3 September 2026 · 4 min read

The two minute version. The rest of this page is the detail underneath it.

Pre-qualified: my yes, not the bank's

Being pre-qualified is something I'll say when I've received all the information required from a client to satisfy myself that they'll be approved for a certain amount with a particular lender. I've done the vetting: verified the income documents, looked at bank statements, understood the credit file. I'm confident they will be approved for a certain amount with these particular lenders.

Now, that's me saying that, not the bank. It's a real assessment, but it carries my name on it. For a lot of people it's enough to start looking. For auction, it isn't.

Pre-approved: the bank's yes, before the property

Logically, we then move to the pre-approval stage, where I send an application to a bank and the bank has a look at what I've done. They go, yep, you are now pre-approved for the amount we submitted, because I've done the legwork up front in pre-qualifying you.

So pre-qualified is me saying I'm confident in approval. Pre-approval is the bank saying you have been pre-approved. It typically lasts 90 days, and whether you need it before you look depends on how competitive your market is.

Conditional: the bank has seen the property

When you've got pre-approval and you find a property, or you're successful at auction, you move through the rest of the stages. Conditional approval is when the bank has had a look at the property. They've checked the information and they're going, okay, we're going to approve you fully once we have ticked the rest of these boxes.

So they'll have conditions. A valuation coming back where it needs to, a document they still want, sometimes a debt paid out. Those conditions need to be met before they'll move to the last step.

Unconditional: signed off, on to settlement

Once the conditions are met, the bank issues an unconditional approval, or a formal approval. That formal approval means the bank has signed off on everything to do with what you're trying to make happen.

They then issue loan documents and take you through the rest of the journey up until settlement. That's the stage that matters for your contract, because it's what lets you go unconditional on the purchase and exchange.