Home loan pre-approval in NZ: how long it takes and how long it lasts

What is home loan pre-approval?

Pre-approval is a checkpoint. A buyer gives a lender their documents. The lender looks at income, debts, deposit and how money is managed. Then it says in writing roughly what it may be willing to lend, if everything stays the same and the home chosen meets its rules.

It is not a loan. Nothing has been borrowed, and no one has agreed to borrow. Lenders also use the word “conditional approval” for the same step, and the name varies between banks.

How long does pre-approval take?

As a guide, getting pre-approval usually takes about 5 to 10 working days once your documents are in. Some lenders move faster, and a missing document slows things down. Most of the wait is usually getting the paperwork together.

A rough timeline looks like this:

1. The buyer gathers the documents. This is the part within their control.
2. They go to a lender, either directly or through a home loan specialist.
3. The lender checks them, usually in about 5 to 10 working days as a guide.
4. A letter arrives. It’s usually valid for 90 days, but it pays to check with your lender.
5. House-hunting can follow, with the lender's conditions still in place.

How long does a pre-approval last?

Usually 90 days, but it pays to check with your lender. Lenders set their own terms, so the letter itself is the place to look. If a search runs past the end date, ask whether it can extend. It may want updated payslips and statements, and new debt taken on while waiting can change the answer.

What documents do I need for pre-approval?

The list changes by lender, but these are common:

• Photo ID, such as a passport or driver licence.
• Proof of your deposit and where it came from, such as bank and KiwiSaver statements.
• Income evidence. Employees often give about 3 months of payslips.
• If you are self-employed, accountant-signed financial statements.
• Bank statements for about 3 months, including credit cards and other loans.
• Details of any gift, such as a letter from the person giving it.

The full list is on the first-home buyer checklist. Your home loan specialist or lender will say what they need.

What is the difference between pre-approval, conditional and unconditional?

• Pre-approval is early. It is about you, not a specific home.
• Conditional approval on a home means the lender likes you and the home, but some conditions are still open, such as a valuation or insurance.
• Unconditional approval means the lender has signed off on that home and the conditions are met.

Your offer on a home can also be conditional or unconditional. A finance condition in an agreement gives time to sort the loan. Your lawyer explains the wording.

Can a pre-approval change after it is issued?

We could not find a published rate for this, so we will not guess. What lenders and home loan specialists do say is that pre-approval is conditional, and it can change if:

• your income, job or hours change;
• you take on new debt, or lift a card limit;
• the valuation comes in below the price;
• the property does not fit the lender’s rules; or
• the lender’s own policy or lending limits change.

A change in circumstances is something a lender or home loan specialist will want to know about. If one lender does not go ahead, another lender may see it differently, but that is not a promise.

If a lender says no, this guide to a declined home loan covers the next steps.

Can I use pre-approval at an auction?

Auctions carry extra risk. A winning auction bid is unconditional. There is no finance condition, and buyers usually pay a deposit of about 10% on the day. If the finance then falls over, the buyer may lose the deposit or face legal action. KiwiSaver cannot be used for that deposit on the day.

Many buyers ask a home loan specialist about finance for that exact home before bidding, and have a lawyer read the paperwork. Pre-approval is a start, not a promise that the lender will accept a particular home.

Common questions