What lenders look at before they say yes

Lenders don't assess you at the rate you'll actually pay. They add a buffer on top and test whether you could still meet repayments if rates rose. That buffer is the single biggest reason people can borrow less than they expect — the sums are run against a rate you're not currently paying.

It isn't there to annoy you. It's there so a rate cycle doesn't put your household under water.

Base salary is straightforward. Overtime, bonuses, commission and contract income are often counted at a discount or need a longer history. Self-employed applicants are usually assessed on lodged tax returns, sometimes two years of them. If your income is irregular, the paperwork matters more than the headline figure.

Every loan, car lease, buy-now-pay-later account and HECS/HELP balance reduces your capacity. Credit cards are assessed on the limit, not the balance — an unused $20,000 card can cost you far more borrowing capacity than it's worth to keep. Tidying this up before applying is often the fastest improvement available.

Lenders compare your declared expenses against benchmark figures for your household size and income. Recent statements get reviewed. Understating spending doesn't help; it just produces questions and delays.

Expected rental income helps your application, but lenders typically count only around 70 to 80% of it. That discount covers vacancies, management fees and maintenance. So a property advertised at $600 a week may only contribute the equivalent of $450 to the assessment.

A pre-approval tells you a lender is broadly comfortable, subject to conditions. It's usually time-limited, it depends on the property valuing up, and it can be withdrawn if your circumstances change. Useful for confidence at auction — not a guarantee, and not a reason to stretch to the top of the range just because the number exists.

The more useful exercise is working out what you're comfortable repaying, then checking whether a lender agrees — in that order.

Start with your usable equity, then the upfront costs. When you'd like someone to look at the whole picture, share your numbers and we'll match you with one independent specialist. Free, no obligation, and we don't assess or approve credit ourselves.