What’s the difference between settlement date and finance date in a Victorian contract?

If you have just signed (or are about to sign) a contract on a place in Melbourne, your head is probably spinning with dates.

Cooling off date. Finance date. Building inspection date. Settlement date.

A lot of buyers quietly assume that settlement date and finance date are basically the same thing, or that one will just slide if the other is delayed. Then the bank drags its feet, finance is not quite ready, and suddenly your lovely new home in Coburg or Clyde North feels very shaky.

You are not alone in feeling unsure. Victorian contracts can look dry and technical, yet the dates inside them have real consequences for your money, your moving plans, and even whether the deal survives.

Let us clear up the key difference between settlement date and finance date in a Victorian contract, and how to use both to your advantage rather than letting them become nasty surprises.

The Big Picture: What Are These Two Dates?

What Is the Settlement Date?

The settlement date is the finish line of the contract.

It is the day the balance of the purchase price is paid to the seller, the property title transfers into your name, and you usually get the keys and can move in. In Victoria, Consumer Affairs explains that the seller sets the date of settlement in the contract of sale and that the settlement period is usually between 30 and 90 days, although it can be negotiated.

That period between signing and settlement gives everyone time to do their job:

You finalise your loan
The bank orders valuations and prepares mortgage documents
Your conveyancer checks the title, orders searches, and prepares the statement of adjustments
The seller moves out and clears any mortgages on the property

By the settlement date, the contract is meant to be unconditional. The idea is that all the hurdles, like finance approval and building checks, have been dealt with already, so settlement is a relatively smooth transfer rather than a last minute scramble.

Under the standard Law Institute of Victoria (LIV) contract, time is treated as being of the essence. That means the settlement date is not a soft guideline. If you do not settle on that day and there is no agreed extension, you are at risk of default interest, penalty fees and, in serious cases, the seller ending the contract and claiming losses.

So, in short: settlement date is the legally binding handover day.

What Is the Finance Date?

The finance date, sometimes called the finance approval date, belongs to the subject to finance condition in your contract.

If your contract is subject to finance, it is conditional on your lender giving you loan approval by a specific date. That date is the finance date. Victorian commentary on the standard LIV contract explains that subject to finance clauses are usually in general condition 20 of the contract of sale and that they give the purchaser a set period to obtain finance approval.

Local practitioners often see finance dates in the range of 10 to 14 days from the day you sign, although it can be longer or shorter depending on negotiation. Guides aimed at Victorian buyers describe subject to finance clauses as giving the buyer time, usually up to about 14 days, to obtain loan approval for the property.

If your finance is not approved by that date and you genuinely cannot get suitable finance, you can usually:

Ask for an extension of the finance date, or
End the contract under the finance clause, provided you follow the exact steps and time limits in the contract

Several Victorian firms stress that if finance approval has not been obtained by the approval date, the purchaser should immediately contact their lawyer or conveyancer so that notice can be given and rights are preserved.

Subject to finance is there to protect you as the buyer. It lets you lock in the property while you go through the bank's hoops, without risking your deposit if the lender says no.

So, the finance date is not the handover date. It is the deadline for your bank to say, in writing, that they are happy to lend you the money on the terms you need.

Who Does Each Date Protect?

A simple way to remember the difference is to think about who each date is trying to protect.

Finance date mainly protects the buyer. It gives you a window to secure finance and a way out if that does not happen, provided you follow the contract.

Settlement date mainly protects the seller. It tells them when they will be paid in full and can move on, and it puts pressure on the buyer to be ready.

Of course, both dates matter to both sides. A seller also wants you to get finance in time. A buyer wants a clear settlement date so they can organise removalists and give notice on their current rental. Consumer Affairs Victoria explains that settlement is the point when the buyer pays the balance of the purchase price, becomes registered owner and generally takes possession, so everyone plans around that day.

In a Typical Melbourne Deal:

The finance date might be 14 days after the contract date
The settlement date might be 60 days after the contract date

Those two dates work together. The finance date sits early in the deal; the settlement date sits at the end.

Side by Side: Settlement Date vs Finance Date

Here is a quick comparison:

Main Purpose

Finance date: Deadline for your lender to approve your loan under the subject to finance condition
Settlement date: Date when legal ownership transfers and the balance of the price is paid

Typical Timing

Finance date: Often 10 to 14 days after contract date, but can be longer or shorter
Settlement date: Commonly 30, 60, or 90 days after contract date in Victoria

What Happens on the Day

Finance date: You should have written loan approval and your conveyancer confirms whether the contract can proceed or needs to be ended or extended
Settlement date: Your conveyancer and bank exchange money and documents with the seller's side, and you usually receive the keys

Who It Mainly Protects

Finance date: Buyer, by allowing an exit if finance fails and the clause is properly used
Settlement date: Seller, by locking in the date they will receive the balance of the sale price

What If You Miss It

Finance date: If finance is not approved and you do not give notice correctly and on time, the contract can become unconditional and you may lose the protection of the finance clause
Settlement date: If you are not ready to settle, you can be in default, risk penalty interest, extra fees, or even termination and claims for loss

Once you see it laid out like that, you can feel how dangerous it is to blur the two.

Treating the finance date as just a suggestion, or assuming it will quietly move with settlement, is a bit like treating a red light as if it were amber. You might get through once or twice, but eventually there will be a crash.

Why Buyers Mix Them Up

Here is a common Melbourne story.

You bid at an auction in Preston, sign an unconditional contract on the day, and agree to a 60 day settlement. There is no finance clause at all, because auction contracts normally do not contain one and you do not have an automatic right to insist on it.

Your broker had told you that your pre approval looked fine, so you assume finance is locked in. Then the bank valuation comes in a bit low. The lender wants more documents, then more time. Suddenly you are three weeks from settlement and the bank still has not given unconditional approval. You do not have a finance date in the contract to fall back on, and the settlement date is not moving unless the vendor agrees.

Even in Private Sales, Buyers Sometimes Think:

"My finance date is 14 days but my settlement is 60 days, so the bank has 60 days really."
"If my finance is late, the agent will just sort something out."
"Surely they cannot kick me out if I am waiting on the bank."

The standard Victorian contract does not work that way. Under the LIV conditions, the settlement date is fixed and changing it usually needs written agreement from both parties. There is no automatic right to delay settlement just because your lender is running behind.

That is why the finance date is there. It is designed to flush out finance issues early, while there is still time to either fix them or bring the deal to an end before you are in deep water.

What Really Happens If Finance Is Not Ready by the Finance Date?

Let us talk about the stressful part.

If you reach the finance date and you still do not have a clear, written loan approval, you and your conveyancer need a plan.

Subject to finance clauses in Victorian contracts usually spell out that if you have used reasonable efforts to obtain finance and cannot secure it by the approval date, you can either:

Ask the seller to extend the finance date, or
End the contract by written notice within a tight time frame, often within 2 business days of the finance date

Some Key Points:

You must follow the contract wording. The clause usually requires written notice, delivered to the right person, in the right way, and within the time limit.

You need genuine non approval. You cannot use the finance clause simply because you changed your mind. Many contracts allow the seller to ask for proof that your loan was not approved.

If you do nothing, the contract can become unconditional. Letting the date slide without giving notice can mean you lose the safety net of the finance clause.

In Practice, What Does That Look Like?

Say you buy a townhouse in Point Cook on 3 March. Your contract date is 3 March, your finance date is 17 March (14 days), and your settlement date is 3 May (60 days). On 16 March, your bank adviser tells you they are still waiting for some internal sign off.

On 17 March, you sit down with your conveyancer. If the bank cannot give unconditional written approval that day, your conveyancer might:

Contact the agent or seller's lawyer to request an extension of the finance date, and
Prepare a notice to end the contract, ready to serve if finance is formally refused or if the seller does not agree to extend

If an extension is granted in writing, the finance date moves. If finance is refused and you have complied with the clause, you may be able to end the contract and receive your deposit back.

If no extension is given and you say nothing, you risk losing all of that protection.

And What If You Are Not Ready by Settlement Date?

Missing the settlement date is a different story altogether.

If you are not ready to settle on time, and there is no agreement to change the date, the seller can usually:

Charge default interest on the balance owed
Recover extra costs arising from the delay
Serve a default notice, and, if you still do not settle, end the contract and claim losses

The sums can be scary. If the seller later re sells the property at a lower price, they may pursue you for the shortfall, plus costs. That is rare in a stable market, yet it is a real risk, especially if the market softens between your contract date and the seller's re sale.

In short: the finance date is where you decide whether the deal should continue; the settlement date is where you must actually pay and complete.

A good conveyancing team spends weeks preparing you for settlement, checking that the bank has certified loan documents, lining up booking on the electronic settlement platform, and confirming final figures on the settlement statement.

Common Traps Melbourne Buyers Fall Into

1. Treating Pre Approval as a Green Light

Many buyers assume that a pre approval means the bank is locked in. Victorian finance guides warn that pre approvals are often subject to valuation and further checks.

If the valuation on your new unit in Brunswick East comes in lower than the price you paid, or your situation changes, the bank can still say no. That is exactly why the finance date exists.

2. Forgetting That Auctions Are Usually Unconditional

At auction in Victoria, you typically sign a contract that is not subject to finance, building inspection, or a cooling off period.

So there may be no finance date in the contract at all. The only big date is settlement. If your lender declines the loan in that scenario, your position is very shaky.

3. Missing the Notice Period Around the Finance Date

Lawyers and insurers regularly warn that buyers lose their rights because notice about finance is late or unclear. Articles directed at Victorian practitioners stress that any request for an extension should be made in advance of the due date and that any notice to end the contract must be clear and served within the required time frame.

Relying on a chatty phone call with the agent is not enough. If finance is not approved by the finance date, you need proper written notice, drafted in line with the contract wording.

4. Assuming Settlement Can Be Shifted at the Last Minute

Victorian property specialists point out that the settlement date in the standard contract is legally binding and cannot be changed without written agreement from both parties.

If your bank is running late with document checking a week before settlement, you cannot simply tell the agent you will settle next week instead. Any extension needs to be negotiated and documented, and the seller does not have to agree.

A Simple Timeline Example

Let us walk through a simple private sale in Melbourne.

Contract date: 10 April 2026
Finance date: 24 April 2026 (14 days)
Settlement date: 9 June 2026 (60 days)

You are buying a weatherboard in Reservoir.

Contract day (10 April). Your offer is accepted. You sign the contract, which includes a subject to finance clause. The agent sends a copy to your conveyancer and to your broker or bank.

Days 1 to 10. The bank orders a valuation of the property, checks your payslips and bank statements, and asks questions. Your conveyancer reviews the contract and Section 32 statement, and raises any concerns.

Finance date week (around 24 April).

If the bank has given unconditional written approval, your conveyancer confirms that the finance condition can be satisfied and the contract becomes unconditional as to finance.
If the bank has not approved the loan, your conveyancer may request an extension of the finance date or, if the bank declines, prepare to end the contract under the finance clause.

Between finance date and settlement. With finance sorted, your conveyancer focuses on title searches, council and water rate checks, and the statement of adjustments. Your lender sends you mortgage documents to sign and return so they can be ready for settlement.

Settlement day (9 June). Your conveyancer attends electronic settlement with the bank and the seller's side. Funds are transferred, stamps and lodgement fees are paid, and the transfer is lodged so you become registered owner. You collect the keys from the agent not long afterwards.

Notice how the important decision about whether the contract should go ahead happens around the finance date, not at settlement. By the time you reach settlement, the ship is basically sailing. The focus is on execution, not on deciding whether you can afford to be on board.

How a Melbourne Conveyancer Keeps Both Dates Under Control

A good conveyancer is part lawyer, part project manager and part calm voice on the phone when you are panicking about bank delays.

For Victorian property deals, that usually includes:

Reviewing your contract and Section 32 before you sign. This is where they can suggest sensible finance and settlement dates for your situation and your lender. Pearson Chambers often explains how other Victorian timing tools, like Section 27 early deposit release, fit into the wider picture of a sale.

Negotiating dates. If you know your bank is overloaded, your conveyancer can try to negotiate a longer finance period or a 60 day settlement instead of 30 days. Their aim is to give you breathing space without scaring off the seller.

Diarising and chasing. They will keep a very close eye on the finance date and settle date, reminding you and your broker, and stepping in early if things are slipping.

Preparing and serving notices. If finance is delayed or refused, your conveyancer can draft a clear extension request or, if needed, a notice ending the contract under the finance clause, so your rights are protected.

Managing settlement logistics. As settlement approaches, they co ordinate with your lender, the seller's lawyer, and the electronic settlement platform so that money and documents are all ready on the day.

In short, they help make sure your finance date does its job as a safety net and your settlement date happens without drama.

Ready to Get Clear on Your Dates?

Buying property around Melbourne, whether it is a unit in Southbank, a family home in Geelong, or an off the plan townhouse in the outer suburbs, already comes with enough stress. You do not need extra anxiety from confusing contract dates or last minute finance chaos.

If You Are:

About to sign a contract and want to be sure your finance and settlement dates make sense, or
Already under contract and feeling nervous about an upcoming finance date or settlement deadline,

Pearson Chambers Conveyancing can help.

They Can:

Review your Section 32 and contract before you sign
Explain, in plain language, exactly what your finance and settlement dates mean for you
Negotiate better timing where possible
Keep your dates diarised and your lender on track, so there are no nasty surprises near settlement

For Tailored Advice and a Complimentary Section 32 Contract Review, Get in Touch:

Email: contact@pearsonchambers.com.au