Subject to finance condition explained

What is a subject to finance condition?

A subject to finance condition means your offer to buy a property depends on getting formal approval for your home loan. If your finance falls through, you can walk away from the contract without losing your deposit.

When would you use it?

• You’re applying for a home loan
• You haven’t received formal approval yet
• You want to secure the property without risking your finances

How it works

1. You make an offer on a property
2. The contract includes a subject to finance clause
3. You’re given a set timeframe (usually 14 to 21 days) to get finance approved
4. If your loan is approved, the contract goes ahead
5. If it’s declined, you can terminate the contract (with written proof from your lender)

Why it matters

Even if you’ve got pre-approval, things can change. Interest rates, lending criteria, or your financial situation might shift. A subject to finance clause gives you breathing room to get everything locked in before you commit.

Pros and cons

Pros

• Protects you from financial risk
• Gives you time to finalise your loan
• Keeps your deposit safe if finance is declined

Cons

• Less appealing to sellers
• May slow down the sale process
• You’ll need to act fast to meet the deadline

What to expect

• Your broker or bank will need to move quickly
• Your agent and conveyancer will guide the process
• Be ready to provide documents and updates during the finance period

Final tip

Subject to finance is common and smart. Just make sure you’ve got the right support. Chat with your Kindred agent and your broker early so you can move with confidence and avoid last-minute stress.