Finance Conditions Explained | The Complete VIC Buyer’s Guide

In Victoria, a finance clause (or “subject to finance” condition) lets you sign a contract of sale before your lender gives final approval. If the loan is refused, you can end the contract and get your money back.

The catch is that the finance condition in Victoria works on a very tight timetable. You get just 2 clear business days after the approval date to end the contract, and you must send proof that the loan was refused.

Here are the four things every Victorian buyer should know before signing.

The short answer

• The finance condition only applies if the particulars of sale say the contract is subject to a loan, and name the lender, loan amount and approval date.
• You must apply immediately and do everything reasonably required to get the loan approved.
• If the loan isn’t approved, you must serve a written notice ending the contract, with written evidence of the refusal, within 2 clear business days after the approval date.
• Miss that window and you generally lose the right to end the contract under the finance condition.
• The finance condition is separate from your 3 clear business day cooling-off right and from the vendor’s Section 32 statement.

1. A finance condition in Victoria only applies if the particulars say so

Most Victorian homes are sold using the Contract of Sale of Land published by the Law Institute of Victoria (LIV) and the Real Estate Institute of Victoria (REIV). The current edition is dated September 2025.

In that edition, the loan condition is general condition 20. Older editions of the contract numbered it differently (for example, general condition 14), so check the version you are signing.

General condition 20 only works if the particulars of sale (the front pages) are filled in. They should show:

• the lender you will borrow from;
• the loan amount; and
• the approval date, the deadline for loan approval.

If the loan section is left blank, your purchase is not subject to finance. Agents sometimes prepare contracts quickly, so read the particulars before you sign, not after.

Choose the lender and amount carefully

Victorian courts hold buyers to what they wrote down. If you apply to a different lender from the one in the contract, or give notice late, your notice may not end the contract.

If you aren’t sure which bank you’ll use, talk to your lawyer about wording that gives you more flexibility.

2. You must apply immediately and do everything reasonably required

You can only rely on the finance condition if you immediately applied for the loan and did everything reasonably required to get it approved. You also must not be in default under any other condition of the contract when you give notice.

In practice, that means:

• lodging a full application on the day you sign, or as soon as possible after;
• applying for the same loan amount shown in the particulars;
• sending your lender every document it asks for, promptly;
• arranging access for the lender’s valuation; and
• keeping a written record of every step and date.

Small mistakes can matter. If you apply for a loan amount that doesn’t match the contract, a court may find you have not done everything reasonably required. You could then lose your deposit.

3. The 2 clear business day notice rule

This is where the Victorian finance condition differs most from other states. Under general condition 20, if your loan isn’t approved by the approval date, you may end the contract only if you serve on the vendor:

1. a written notice ending the contract; and
2. written evidence that the loan was rejected or not approved (for example, a letter or email from the lender),

within 2 clear business days after the approval date, or any later date the vendor allows.

What does “2 clear business days” mean?

“Clear” days don’t count the approval date itself. Weekends and public holidays don’t count either. Here’s an example:

If a public holiday falls in that window, the count changes. Always get your lawyer to confirm the exact deadline.

Your notice must be clear

A vague letter is not enough. A letter that says finance wasn’t approved and asks for more time, but only says the vendor “may treat” it as notice, may not end the contract. The contract could then go ahead unconditionally.

Your notice should say plainly that you are ending the contract under general condition 20.

Need more time?

The contract allows a later date only if the vendor agrees. Ask before the approval date and get the extension in writing. Don’t assume the vendor will say yes.

4. How finance fits with cooling-off and the Section 32 statement

Victorian buyers have two other protections under the Sale of Land Act 1962 (Vic). They work differently from the finance condition.

The cooling-off period (section 31)

• You can end the contract within 3 clear business days of the day you sign it.
• You must give written notice to the vendor or the vendor’s agent, or leave it at their address, within that time.
• You get back everything you paid except $100 or 0.2% of the price, whichever is more. On a $750,000 home, that is $1,500.

There is no cooling-off right if, for example:

• you bought at a publicly advertised auction, or on the day of the auction;
• you bought within 3 clear business days before or after a publicly advertised auction;
• the property is used mainly for industrial or commercial purposes, or is over 20 hectares and used mainly for farming;
• you and the vendor previously signed a contract for the same land on substantially the same terms; or
• you are an estate agent or a corporate body.

The Section 32 vendor statement

The vendor must give you a vendor statement (often called a “Section 32”) before you sign. It covers things like the title, mortgages, rates, planning, building permits and any owners corporation.

Read it before you apply for finance. Owners corporation fees, easements or planning issues can affect the lender’s valuation. If the statement is missing or materially wrong, you may have a right to end the contract before settlement, depending on the circumstances.

Changes are coming. Under the Consumer Legislation Amendment Act 2026 (Vic), sellers will generally need to make the Section 32 statement available earlier, and the rules on early deposit release will change. Consumer Affairs Victoria says the Section 32 changes start on 1 June 2027 and the deposit changes on 1 July 2027.

What happens to your deposit?

If you validly end the contract under the finance clause, general condition 20 says all money must be immediately refunded to you.

If your notice is late, unclear or not backed by reasonable steps, the contract usually continues. If you then can’t settle, the vendor may be able to end the contract, keep the deposit (often 10% of the price) and claim further losses.

If finding the deposit is the hard part, a deposit bond may help. If a parent is helping you borrow, read our guide to family guarantees first.

Frequently asked questions

Can I buy at auction subject to finance in Victoria?

Usually not. Auction contracts are normally unconditional unless the vendor agrees otherwise before the auction. Get your finance sorted before you bid.

What counts as written evidence that the loan was refused?

Usually a letter or email from the lender (or broker on the lender’s behalf) saying the loan was declined or not approved. Ask for it as soon as you know.

Is conditional approval good enough?

Be careful. If you let the notice window pass because you have conditional approval, and the lender later refuses, you may still have to settle.

What if the approval date falls on a weekend?

Check the particulars and talk to your lawyer. The safest approach is to treat the earliest possible date as your deadline.

Need help with a finance condition in Victoria?

We can check your contract and Section 32 statement before you sign, diarise your approval date, and prepare a clear notice if your loan falls through. Learn more about our property buying and conveyancing service.

Alternatively, you can give us a call, send us a message or book a call with us by clicking the buttons below.

This article is general information only and is not legal advice. It reflects Victorian law at the date of publication. Please contact us for advice about your circumstances.