What happens between exchange and settlement?

Bayley Clarke · Mortgage broker on the road · Last checked 12 November 2026 · 7 min read

The short answer

Exchange is the point you're locked in. Settlement is the day the money moves and the keys become yours. In between, if the approval was done properly before exchange, it's mostly a waiting game.

The weeks in the middle are small jobs with real deadlines: the rest of the deposit, loan documents, building insurance, ID with your conveyancer. When settlements stall it's almost always one of those, not the bank changing its mind. The hard part should already be behind you.

Exchange vs settlement, in one paragraph

Exchange means you're formally locked into the purchase. Ideally, by then you've been through the finance condition, the building and pest and any cooling off, and the bank has given you the approval inside that window. Settlement is the day the bank funds the loan, the seller gets paid and the place becomes yours, generally 30 to 60 days after exchange depending on your state and contract, with around six weeks common in NSW. In some states the signed contract carries the conditions inside it instead. More in Exchange versus settlement: what does each one actually mean?

Signed, and your broker's gone quiet? Book a call

Half an hour. I'll map your finance condition, formal approval and settlement date against each other so the clocks match, and tell you straight what's still open.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

The deposit: when you pay it, how much, and where it sits

Once your offer is accepted you put down an initial deposit. In NSW that's commonly 0.25% of the price, and in other states it can be as little as $1,000. The balance of the contract deposit, often 5% or 10% of the price, is generally due at the end of your finance or cooling-off period. It sits in the agent's trust account, which isn't the agent's money and isn't the seller's yet, and it comes off what you owe at settlement, so you don't pay it twice: When do I pay the deposit to the agent, and where does it go?

If the cash isn't free yet, because you're buying with a guarantor and borrowing the full amount, or it's tied up in a house you haven't sold, a deposit bond can stand in for it. You pay a fee, the provider guarantees the seller, and it only gets issued when the money is clearly coming. It fixes a timing problem, not a deposit problem: What is a deposit bond?

Cooling off, and the 0.25% in NSW

In NSW you get five business days of cooling off after exchange on a residential purchase. Walk away inside that window and you pay the seller 0.25% of the price. On an $800,000 place that's $2,000. It's a known, capped number, and it buys you the right to back out if the building and pest turns up something nasty or the finance doesn't land. What you don't want is to let the five days run out and then decide to pull out, because after that the conversation is a lot more expensive. Unpacked in What is the 0.25% deposit during the cooling-off period when I'm buying a property in NSW?

Do you lose your deposit if finance falls through?

It's state by state. In NSW there's usually no finance clause, just cooling off, so if the finance isn't approved in time you forfeit the 0.25%. In states where contracts commonly carry a finance clause, if the bank says no inside the clause period and you follow the contract, you're generally entitled to your deposit back. Either way, the clock is the real risk, which is why I'd rather pre-qualify you properly before you sign than find out inside five days: Do I get my deposit back if finance falls through?

One thing that can wobble a deal after the offer is the valuation. If it comes in under the price, the bank lends against the lower figure and the gap lands on you. Challenge it first, then try another lender, then talk about topping up or getting out: The bank valued it lower than what I paid. What happens?

How long does settlement take, and who does what in the six weeks?

Discovery, a pre-approval that takes a couple of days, offers, then a contract once one is accepted. From there your conveyancer handles the legal side while I turn the pre-approval into a full approval, which mostly means the bank valuing the property. Start to finish, if you're keen and making offers, the whole thing might be two or three months. The slow part is usually finding and winning the place, not the bank: How long does it all take, and who does what before settlement?

If someone in the family is a licensed conveyancer or property solicitor, they can do the legal side for you. Just be sure they practise in the state you're buying in and that you'd be comfortable chasing them if something's late: Can a family member do my conveyancing?

Insurance, ID and the paperwork that stalls settlements

The bank needs to see building insurance that covers the cost of rebuilding before it will settle. Expensive is fine as far as the bank's concerned. Impossible is the problem, because if no insurer will cover a property in a flood or fire zone, most lenders won't proceed. Get a quote before you sign anywhere with that kind of history, not in the last week: Can I get a home loan if home insurance is really hard to get or very expensive?

ID is the other quiet staller. Passport in one name and licence in another isn't a dealbreaker, it just needs the registry-issued marriage or change of name certificate that joins them up. Mention it on the first call, not the week documents go out: My passport has my maiden name, but my licence and contract have my married name. Will that hold up?

What happens on settlement day, and when do I get the keys?

For you, not much, because everything on your side is done in advance: your contribution transferred, documents signed. On the day, the bank, the conveyancers and I make sure the funds move, the seller's mortgage is paid out and the title moves into your name, all electronically. Once it's through you get a call from me, then you go and pick up the keys, usually from the selling agent. Just don't head over early. It isn't yours until settlement has gone through: What actually happens on settlement day, and when do I get the keys?

The honest part

If your approval is still conditional when you exchange, the six weeks stop being a wait and start being a race, and missing settlement costs real money in interest and penalties to the seller. Getting the approval done before exchange is the single biggest thing that makes the rest boring, and boring is what you want here. Already settled with me? Send this to the mate who just signed and keeps asking you what happens next.

Signed, and your broker's gone quiet? Book a call

Tell me where your contract's at. I'll check the approval, the deposit deadline and the paperwork still outstanding, and line it up so settlement day really is just waiting.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Common questions about exchange and settlement

What's the difference between exchange and settlement?+

Exchange is when you're formally locked into the contract. Settlement is when the bank funds the loan, the seller is paid and the property becomes yours, generally 30 to 60 days later depending on your state and contract.

How long does settlement take?+

Commonly 30 to 60 days after exchange, with around six weeks common in NSW. Your contract sets the date, and a longer settlement can sometimes be negotiated if it suits both sides.

Do you lose your deposit if finance falls through?+

It depends on the state and your contract. With a finance clause, if the bank says no inside the clause period you're generally entitled to the deposit back. In NSW, pulling out during cooling off costs 0.25% of the price.

What is the cooling off period in NSW?+

Five business days after exchange on a residential purchase. If you withdraw in that time you pay the seller 0.25% of the price. There's no cooling off when you buy at auction.

When do I get the keys?+

Once settlement has gone through on the day, usually from the selling agent. Wait for the confirmation call before heading over, because it isn't yours until settlement completes.

Next question

How do I make an offer on a house without getting burnt?

The step before this one: agents, auctions, finance clauses and building and pest.