Getting pre-approval feels like the hard part is over. But pre-approval is an indication, not a guarantee — and plenty of buyers are still knocked back at the final step. Here are the five most common reasons it happens, and how to make sure it doesn't happen to you.
A decline is stressful, and it can put a purchase at risk if it comes late. The good news: almost every reason on this list is avoidable with the right preparation and the right lender. Here's what to watch — and how a broker heads each one off.
1. Your financial situation changed
The most common one. If you've lost a job, dropped to fewer hours, changed employers, or taken on a new commitment (a car loan, a big purchase) between pre-approval and formal approval, the lender reassesses — and the answer can change.
How we prevent it: we tell you plainly what to keep steady after pre-approval — don't change jobs, don't take on new debt, don't make large unexplained transactions until you've settled.
2. Your credit score slipped
Applying for other credit (including "buy now, pay later" and car finance), or missing repayments on existing debt, can dent your credit file after pre-approval — and lenders re-check it before formal approval.
How we prevent it: we review your credit file up front, flag anything that needs cleaning up, and advise you to avoid new applications during the process.
3. The lender's policy changed
Lenders adjust their credit policies regularly — tightening how they treat certain income types, deposit sources, or borrower profiles. A loan that fit last month's rules can fall outside this month's.
How we prevent it: we track policy across 60+ lenders and place you with one whose current policy genuinely fits — not one you'll fall foul of at the last minute.
4. The lender had reservations about the property
Even a strong borrower can be declined over the property. Lenders can be wary of very small apartments, high-density developments, unusual construction or locations they consider harder to resell — and a low valuation can shrink how much they'll lend.
How we prevent it: we match the property type to lenders comfortable with it, and manage the valuation to reduce the risk of surprises on settlement.
5. Serviceability tightened (often after a rate move)
Lenders assess you at an interest rate above the actual rate (a "buffer"). If rates rise between pre-approval and formal approval — or your expenses climb — the lender may decide you can no longer comfortably service the loan.
How we prevent it: we build in a servicing buffer from the start and choose lenders whose assessment approach best fits your income, so a small change doesn't tip you over the line.
If you've already been rejected — don't just reapply
The instinct is to try the next bank straight away. Resist it. Every formal application records an enquiry on your credit file, and a string of them in a short window makes you look higher-risk to every lender. Instead: find out exactly why you were declined, fix what can be fixed, and approach a lender whose policy actually suits you. A decline with one lender is frequently a clean approval with another — the trick is knowing which, before you apply.
Why a broker changes the odds
Most rejections come down to a mismatch between your situation and a single lender's rules. A bank branch can only offer its product and its policy. As your broker, we assess your position against 60+ lenders first, place you where you genuinely fit, and manage the file through to settlement — so you're not collecting knock-backs on your credit file. Under Best Interests Duty we're bound to act in your interests, and our service is free to you — the lender pays us on settlement.
Worried about getting knocked back — or already been declined? Get in touch or book a chat below and we'll find the right lender for your situation. Our guides on LMI and home purchase finance are useful next reads.