Pre-Approval After the RBA Rise: What First Home Buyers Should Check

Written by Ferns Finance. Last updated 13 October 2026.

If you got your home loan pre-approval before the Reserve Bank of Australia (RBA) lifted the cash rate to 4.60% on 29 September 2026, it is worth checking it again. A pre-approval is not a guarantee, and lenders can reassess it if rates or your circumstances change. Lenders are also now raising their variable rates, which can reduce how much you can borrow.

At Ferns Finance, we help first home buyers across Logan, Beenleigh and the Gold Coast. The question to ask right now is simple: is my pre-approval still good?

Key takeaways

• Lenders have announced variable rate rises of around 0.25% p.a. since the RBA's 29 September 2026 decision, with effective dates in the first half of October.
• Pre-approval is conditional. It typically lasts a limited time, often a few months, and varies by lender.
• Banks and other APRA-regulated lenders must test whether you could afford repayments at 3 percentage points above your loan rate (APRA, 28 May 2026), so a rate rise can cut borrowing power by more than the size of the rise suggests.
• Speak to your broker before you make an offer, and ask whether your approval needs to be re-run.

What is pre-approval, and is it a guarantee?

Pre-approval is a lender's conditional indication of how much it may lend you, based on your income, expenses, debts and credit history. It is not a final approval and not a guarantee. The lender can change its decision if your circumstances change, if the property does not meet its requirements, or if rates and lending policy change.

Most pre-approvals are valid for a limited time. Industry sources commonly put this at about three to six months, but it varies by lender, and some are shorter. Check the date on yours.

How can the RBA rate rise affect my pre-approval?

It can affect it in two ways. First, your pre-approval was assessed at the rates and policy that applied when it was issued. If your lender has since raised its variable rate, it may reassess your borrowing power at the new rate before it finalises your loan. A lender may absorb a small rise, but do not assume yours will.

Second, some lenders set cut-off dates for applications already in progress. Applications formally approved by the cut-off may keep the earlier assessment, while others may be reassessed at the new rate. Cut-off dates and rules differ by lender, so your broker needs to check the specific lender you are using.

How much can borrowing power fall?

Here is an illustrative example, not a lender assessment. Lenders test whether you could afford repayments at a higher "assessment rate". APRA has confirmed the serviceability buffer at 3 percentage points above your loan rate (APRA, 28 May 2026). Say a lender assesses a buyer as able to afford about $3,500 a month. At an assessment rate of 9.00% (a 6.00% loan plus the buffer), that supports a loan of about $435,000. After a 0.25 percentage point rise, the assessment rate becomes 9.25% and the same $3,500 supports about $425,000.

That is roughly $9,500 less in borrowing power from one rise, on the same income. It shows why a rate rise can quietly shift your price range. Your actual figure will depend on your income, expenses and debts, and each lender assesses these differently.

What about falling prices and my deposit?

Cotality reported that national home values fell 1.1% in September 2026, the sixth monthly fall in a row. That can give you more choice and room to negotiate, but if your borrowing power falls at the same time, the benefit may be smaller than the headline suggests. Your deposit still matters, because a bigger one means a smaller loan and may help you avoid Lenders Mortgage Insurance (LMI). As a hypothetical example, on a $650,000 home a 5% deposit is $32,500 and a 20% deposit is $130,000.

What can I do to protect my borrowing power?

Small changes can add up. Reducing or closing unused credit card limits can lift borrowing power, because lenders assess limits, not just balances. Paying off small debts, trimming regular expenses and showing stable income also help. Avoid taking on new debt, such as a car loan or buy now pay later, before you apply for finance. Keep your documents current, because out-of-date payslips and statements can slow things down.

What should I ask my broker before making an offer?

Ask these questions first, so there are no surprises:

• Is my pre-approval still valid, and when does it expire?
• Has my lender changed its rate or policy since it was issued?
• Do I need to be re-assessed at the new rate?
• What price range is realistic now?
• Does my contract have a finance condition, and how long do I have to arrange finance? Speak to your solicitor or conveyancer about the contract terms.

Next steps: things you can do this week

1. Check your pre-approval date and conditions. Find the expiry date and any conditions on the letter.
2. Ask for a re-check. Find out whether your lender has changed its rate or policy since you were approved.
3. Reduce limits. Cut unused credit card limits.
4. Track your spending. Lenders review spending closely, so know your numbers.
5. Check schemes. Ask us whether the government 5% deposit scheme could apply to you.
6. Use our tools. Try the borrowing power calculator.

Buying your first home? Let's talk.

Book a free discovery call and we will check where you stand.

See also our first home loans page.

Common questions

Does my home loan pre-approval expire?

Yes. Pre-approvals are valid for a limited time that varies by lender, commonly a few months. Check the expiry date on your letter. If it has expired or is close to expiring, your broker can ask the lender to extend or re-assess it, which usually means refreshing your documents.

Can a lender change my pre-approval after the RBA rate rise in September 2026?

Yes. Pre-approval is conditional, and a lender can reassess it if rates, policy or your circumstances change. Lenders have started raising variable rates after the RBA's rise to 4.60%, so ask your broker whether your lender needs to re-run your assessment before you make an offer.

How much does a 0.25 percentage point rate rise reduce borrowing power?

As a hypothetical example, a buyer assessed as able to afford about $3,500 a month could borrow about $435,000 at a 9.00% assessment rate and about $425,000 at 9.25%. That is roughly $9,500 less. Your actual change depends on your income, expenses and your lender's assessment.

Should I get a new pre-approval or ask my broker to re-check the old one?

Start by asking your broker to re-check the existing one. If it is still valid, they can confirm whether your lender needs to reassess it at the new rate. If it has expired, or your income, expenses or debts have changed, you will usually need a fresh assessment with updated documents.

What should first home buyers do if their pre-approval was issued before 29 September?

Contact your broker and ask whether your lender has changed its rate or policy since then. They can check whether your approval is still valid, whether it needs to be re-run at the new rate, and what price range now makes sense. Do this before you make an offer.

What if I have already signed a contract to buy a home?

Speak to your broker and your solicitor straight away. Check whether your contract has a finance condition and when it ends. Your broker can confirm where your loan application stands and whether the lender's rate change affects your approval, so you know your position before the deadline.

General information only. This article is general educational content and is not financial, tax or legal advice. Speak to a qualified professional about your circumstances.