Eternity Group

Finance — Pre-approval

Pre-Approval & Borrowing Capacity

A clear, written view of what lenders are likely to lend you — and why two lenders can reach materially different figures for the same applicant. Modelled by a Credit Representative working alongside a Chartered Accountant, before any credit-file enquiry.

Book a Borrowing Capacity ReviewSee Our Process
  • First home
  • Upgrading
  • Investment loans
  • PAYG + self-employed
  • Trust / company applicants

Mr Rohan Manokaran (Credit Representative 565110) is authorised under Australian Credit Licence 561324 held by Loans Only Pty Ltd. Information on this page is general in nature and does not take into account your objectives, financial situation or needs. Credit eligibility, lender criteria, fees and charges apply.

What lenders assess

Six things that drive your borrowing capacity.

Lender policy differences across these six areas explain most of the variation in borrowing-capacity figures between lenders. The right lender for you is the one whose policy fits your shape — not the one with the most attractive rate.

Income

Type · evidence · stability

PAYG salary, self-employed business profit, rental income (shaded), distributions, bonuses, overtime, secondary income — each treated differently by different lenders. Documentation varies (payslips, tax returns, BAS, financial statements).

Expenses

HEM benchmark · declared · verified

Lenders use a combination of declared living expenses, HEM benchmark figures and bank-statement verification. Higher-than-HEM expenses or declared expenses that do not reconcile to bank statements trigger questions.

Liabilities

Home loans · credit cards · personal · HECS

Existing facilities (home loans, investment loans, personal loans, car loans, credit-card limits, HECS-HELP repayments) reduce serviceability. Some lenders treat credit-card limits at 3% per month notional; others lower. Business debts have lender-specific treatment.

Deposit & equity

Size · genuine savings · source

Larger deposits mean lower LVR, which expands the lender shortlist and may improve pricing. "Genuine savings" (typically 5% of purchase price held for 3 months) has specific rules; gifts, inheritance and equity from existing property are accepted under specific policies.

Credit conduct

Equifax · enquiries · arrears · defaults

Lenders review credit-bureau reports. Recent enquiries, late payments, defaults, ATO debt and missed loan payments all factor in. Cleaning up credit conduct in the months before applying typically has more impact than chasing the lowest rate.

Assessment rate

APRA 3pt buffer · actual rate

APRA-regulated lenders apply at least a 3 percentage point buffer above the actual loan rate when assessing repayments. A 6.5% actual rate is assessed at 9.5%. This is the single largest factor that makes the "loan you qualify for" smaller than the "loan you would actually repay."

Pre-approval vs approval

What pre-approval actually means.

Pre-approval is a useful starting point but it is not unconditional approval. Understanding the difference avoids surprises later.

What pre-approval gives you

A documented indication from a specific lender that — based on the disclosed income, assets, liabilities and deposit — they would be willing to lend up to a stated amount, subject to property valuation and final credit assessment.

What pre-approval does not give you

Pre-approval does not lock the lender into the loan. The lender can decline at the unconditional approval stage on valuation, policy, contract terms, or a change in your circumstances. It is also typically time-limited (3–6 months).

When pre-approval makes sense

House-hunting in a competitive market, attending auctions, signing contracts with a finance clause, or simply wanting confidence in your price range. Most buyers benefit from going through this step.

When pre-approval may not be the right first step

Where the borrowing position is straightforward and the application is fast to assemble at the time a contract is signed, going directly to full application may be appropriate. We confirm at scoping.

Process

From scoping to pre-approval — typically 1–3 weeks.

Document collection drives the timeline. Pre-assessment is run before any credit-file enquiry.

Scoping call

Understanding what you are trying to buy, your income shape, deposit, existing facilities and timeline. We confirm whether pre-approval is the right next step.

Document collection

A tailored checklist based on your income shape. Read-only access to bank accounts where possible, identification documents, debt statements.

Pre-assessment & shortlist

Multi-lender modelling of borrowing capacity with the policy reasons documented. Pre-assessment is run before any credit-file enquiry.

Formal application

Application submitted to the shortlisted lender. Lender applies its own credit assessment; we track progress and respond to lender queries.

Pre-approval issued

Lender issues conditional pre-approval. Period of validity, conditions and exclusions documented and provided to you in writing.

Property to full approval

Once you have a property, the application progresses to unconditional approval — covered in detail on the Home Loans and Refinancing pages.

Frequently asked questions

Pre-approval — common questions.

Pre-approval is a conditional indication from a lender — based on the income, assets, liabilities and deposit you have disclosed — of the maximum amount they would be willing to lend, subject to property valuation, final credit assessment and any specific conditions attached. It is not unconditional approval. Pre-approval is typically valid for 3–6 months depending on lender, and is usually subject to the actual property satisfying the lender's valuation and policy.

How we are paid

How we are paid: Eternity Mortgage Solutions typically receives commissions from the lender for loans arranged on your behalf. A full explanation of how we are paid, our lender panel and any potential conflicts of interest is provided in our Credit Guide and Credit Proposal Disclosure document, available on request before any loan application is submitted.

Related

Where this fits in the bigger picture

Pre-approval is the start of a home-loan journey. The connected pieces are home loans themselves, refinancing, the self-employed pathway and the One Roof engagement model.