Home loan pre-approvals surge after rate cuts, says CommBank
New data from CommBank indicates an increase in home loan conditional pre-approval applications following two recent 0.25% per annum variable rate reductions.
The bank has reported a 12% rise in conditional pre-approvals nationally since the first two rate cuts, measured against the same time frame in 2024. Additionally, the average value of conditional pre-approval applications is up by 13% year-on-year.
CommBank attributes the increase in activity to Australians preparing to buy property, whether as first-time buyers, current homeowners seeking to upgrade, or property investors.
Regional numbers
National figures have been bolstered by significant increases in New South Wales and Queensland. New South Wales recorded a 25% rise in conditional pre-approval applications compared to last year, leading the nation. Queensland followed with a 16% increase. By contrast, activity in Victoria remained steady through the period.
According to CommBank, conditional pre-approval provides customers with a clearer understanding of their borrowing capacity before they start searching for a new home.
The bank stated that after the second variable rate reduction in May, there was a noticeable acceleration in applications. Home buyers appeared to move swiftly in response to lower interest rates, seeking to maximise increased borrowing power.
The bank anticipates a further uptick in conditional pre-approval applications with the implementation of another 0.25% per annum rate reduction for its customers, dating from Friday, 22 August 2025. CommBank advises that online applications for conditional pre-approval can generally be completed in around 10 minutes.
Borrowers' outlook
"It's encouraging to see more people feeling confident about their home buying options. The Aussie dream has long been anchored in home ownership, and this rise in conditional pre-approval activity reflects a renewed sense of optimism as borrowers respond to lower interest rates and increased borrowing power," said Executive General Manager Home Buying, Marcos Meneguzzi.
CommBank's updated figures signal a shift in consumer sentiment as lower rates appear to renew confidence among prospective buyers. The data, says the bank, highlights a pattern of market readiness that is a typical response to changes in lending costs.
Conditional pre-approval explained
Conditional pre-approval is a process that allows prospective borrowers to receive an indication of how much they may be able to borrow before starting to search for a property. It does not constitute a loan offer, but it can streamline the buying process by clarifying budget constraints early on and allowing buyers to act quickly in a competitive property market.
The increase in application volumes may impact property markets in the coming months, particularly in states where the surge has been most pronounced. However, application growth is not evenly distributed nationwide and, as indicated in the data, some regions, such as Victoria, have shown more subdued movement compared to others.
CommBank has positioned online conditional pre-approval as an accessible first step for buyers looking to navigate a changing interest rate environment. The process, according to the bank, is designed to be straightforward and time-efficient for customers preparing to enter or re-enter the property market.
The recent data provides further insights into how prospective buyers are adjusting to the current environment of rate reductions, with a focus on purchasing or investing amid changing market dynamics.
