Income is verified and adjusted
Lenders may treat salary, overtime, bonuses, rent and self-employed income differently. Some income is averaged or shaded, and the required history varies by source and lender.
Expenses and debts reduce capacity
Declared living costs are checked against lender benchmarks. Credit limits, personal loans, HELP debt and other commitments can reduce assessed capacity even when their current repayment appears manageable.
The assessment rate includes a buffer
The proposed loan is generally tested at a rate above the offered rate. The buffer is designed to assess whether repayments remain manageable if rates or circumstances change.
Key points
- Serviceability is not the same as a household budget
- Income treatment varies by lender
- Credit limits can reduce capacity
- The assessment rate is higher than the offered rate
Frequently asked questions
Why do two lenders calculate different borrowing amounts?
They may use different income shading, expense benchmarks, debt treatment and policy limits.
Does passing serviceability guarantee approval?
No. Credit history, deposit, property, documents and lender policy also form part of the decision.
Important: This guide provides general information only and does not constitute financial, credit, or legal advice. Finance options depend on individual circumstances, lender criteria, and assessment. Envision Finance is a comparison and referral service helping you find suitable options from our panel of lenders.