Short answer: If your bank pulls out days before settlement, you're usually still bound by the contract. Miss the date and the vendor can serve a notice to complete or a default notice. Still can't settle and you can lose a deposit of up to 10% and be sued for losses. Bridging finance against property you own can fund in as little as 24 hours.
First: you're still bound by the contract
When a bank withdraws an approval days before settlement, the contract you signed doesn’t change. A valuation came in short, a policy changed, a condition couldn’t be met: none of that moves the settlement date. Unless your contract was still subject to finance and that clause is still live, the date stands and the deposit is on the line.
This guide is for the buyer. You’re purchasing premises, an investment property or another business-related property, and the money isn’t going to arrive on time. Your conveyancer or solicitor is the first call, to confirm where you stand under your contract. A lender is the second, because funding is the part a lawyer can’t fix.
The good news is that a few days late is usually expensive but survivable. Failing to settle at all is what costs the deposit.
Why bank approvals fall over late
Knowing why the approval failed tells you two things: whether the bank is likely to come back, and how long the bridge needs to run.
- The valuation came in short. The bank will still lend, just less. That is a shortfall, and often the easiest gap to fill.
- A condition couldn’t be met in time. A lease, a set of financials or a document from the vendor didn’t arrive. The bank may well approve once it does, which makes a refinance a strong exit.
- Serviceability was recalculated. Updated figures or a change in the bank’s policy pushed the file outside its limits. Ask whether it is fixable or final.
- Something surfaced on a credit check. A default, an ATO debt or an old judgment. A different lender may take it; that bank probably won’t.
- The bank simply ran out of time. Formal approval was coming but not before the settlement date. This is the cleanest case for a short bridge.
Ask the bank which of these it was, in writing. Whoever refinances you later will want to read it.
What the standard contracts say happens if you can't settle
Below is what the standard contract in each state says. Your contract may have special conditions that change it, so check yours with your conveyancer.
New South Wales
Under the standard Law Society and REINSW contract, once a party is late, the other side can serve a notice to complete if it is otherwise entitled to. The notice must give a reasonable time to settle; about 14 days is common practice. If the buyer still doesn’t settle, the vendor can terminate, keep the deposit (up to 10% of the price) and sue for its losses, including a loss on resale within 12 months. The standard NSW contract has no automatic late-settlement interest. That only applies if a special condition adds it, so read yours.
Victoria
Under the standard LIV and REIV contract, money owing during a default attracts interest at 2% above the rate set under the Penalty Interest Rates Act 1983. With that rate at 10% (Supreme Court of Victoria), that is around 12% a year on the money owing. The vendor can serve a default notice giving 14 days to remedy. If the default isn’t fixed and the vendor ends the contract, the deposit of up to 10% is forfeited.
Queensland
The REIQ contract makes time of the essence, so a buyer who doesn’t settle on the day is usually in breach straight away. The seller can terminate, keep the deposit and sue, or keep the contract going and sue. REIQ editions since 2022 let either party extend settlement by up to 5 business days in total. That is a small buffer, not a rescue. The Property Law Act 2023, in force from 1 August 2025, allows extensions for adverse events such as system outages. A buyer who doesn’t have the money isn’t one of them.
How to fund settlement when the bank pulls out
- Bridging finance or a second mortgage against property you already own. The most common fix. Assessed on equity and the exit, not financials, from $20,000 to $5M, and funded in as little as 24 hours. In Victoria it can settle by caveat first; everywhere else it goes straight on as a registered second mortgage. See urgent bridging loans, 24-hour second mortgages and, in Victoria, urgent caveat loans.
- A first mortgage on the property you’re buying. In some cases the purchase itself can be the security, alone or alongside another property. It works best on standard residential, commercial or industrial property that values cleanly. Our page on commercial property finance covers premises purchases.
- A shortfall loan. If the bank is still lending but less than you need, often after a short valuation, a smaller loan can cover the gap. See settlement shortfall loans.
These combine. A first mortgage on the purchase plus a second mortgage on another property is a common way to reach the full amount. Our main bridging loans page explains how each structure works.
What a lender needs from you, fast
- The contract of sale, including every special condition.
- The settlement figures or settlement statement, so the exact amount needed to complete is known.
- The bank’s approval and why it failed. The withdrawal email is fine. It shows what needs fixing for the refinance.
- Details of any other property you own: the address, who is on the title, what’s owing and to whom.
- Your exit: which lender will refinance and how long it needs, or what will be sold.
- Who has to sign. Every director or trustee needs to be reachable this week.
Send it all in one go. Every round trip for one more document costs hours, and with three days left you don’t have many. Lead with the awkward facts, such as arrears, ATO debt or a dispute on a title. None of them necessarily stops the loan. Finding them on settlement morning does.
Days left: what's realistic
| Time to settlement | What’s realistic | What to do now |
|---|---|---|
| 5 or more business days | A good chance of settling on time if there’s equity and a clear exit | Apply today and tell your conveyancer funding is underway |
| 3 to 4 business days | Achievable for straightforward property with signatories available | Send every document at once and confirm who signs |
| 1 to 2 business days | Tight. Possible only if the security is simple and can be valued from a desk | Fund in parallel with asking for a short extension (in Queensland, the REIQ 5 business days) |
| Settlement date already missed | Often still recoverable in NSW and Victoria while the notice period runs | Fund inside the notice. In Queensland the seller may be able to terminate straight away, so move today |
Our median for property-secured loans is 36 hours from enquiry to funds. That is a median, not a promise, and it assumes the documents above arrive together.
The exit: how the bridge gets repaid
A settlement rescue loan is short-term by design. Know how it ends before you sign.
- Refinance once the bank approves. The most common exit. Whatever killed the first approval gets resolved, and the bank or another lender refinances. Ask the original bank now, in writing, exactly what it needs.
- A sale. Of the other property, or of the purchase itself if it was always going to be sold.
- Incoming funds with a date. The sale of a business, another settlement, or a contracted payment.
When is it the wrong answer? If the bank declined because the purchase doesn’t stack up, because the rent won’t cover the debt or the business can’t service it, then rescuing the settlement just moves the problem into a dearer loan. Sometimes losing the deposit costs less than owning something you can’t hold. That’s a hard call, and one to make with your accountant, not under the pressure of a settlement date.
Tell us your settlement date first
The date shapes everything: the structure, the security, and whether a desktop valuation will do. The eligibility check takes 60 seconds, makes no credit enquiry and costs nothing. Start with your settlement date and the amount you’re short, or call 1300 863 711 if settlement is this week.
Frequently asked questions
Can I get my deposit back if my bank pulled out?
Generally not under the standard contracts once any finance clause has passed or been satisfied. If you're still inside a finance clause, call your conveyancer today, because that clause may protect you.
Can the vendor charge me for settling late?
In Victoria the standard contract charges default interest on money owing during a default. The standard NSW contract has no automatic late-settlement interest unless a special condition adds it. Check your own contract.
Can the loan be secured on the property I'm buying?
Sometimes, as a first mortgage, on its own or with another property you own. It depends on the property, the amount and the exit.
Will the vendor agree to a short extension?
Some will, especially for a short delay with funding already underway, but most don't have to. Ask through your conveyancer and get any extension in writing.
Do I need financials for a bridging loan?
No. Property-secured loans are assessed on the equity and on how the loan will be repaid. Bad credit, ATO debt and overdue lodgements are considered.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
