Why Borrowing Power Varies $200,000 Between Lenders
ADS Team
Author
August 17, 2026
25 days ago
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In short: Every lender builds its own servicing calculator within APRA's requirements, and the assumptions differ enough to move the outcome by $200,000 or more on identical inputs. The main variables are how much of your variable income counts, how living expenses are benchmarked, and how existing commitments are treated.
Key takeaways
- Rental income shading of 70% vs 80% alone can move capacity six figures.
- HECS-HELP treatment varies from full inclusion to disregard when nearly repaid.
- Credit card limits are assessed at 3-3.8% of the limit depending on the lender.
- Negative gearing add-backs are accepted by some lenders and not others.
The variables that move the number
| Input | Range across lenders |
|---|---|
| Rental income shading | 70% - 80% |
| Overtime / bonus | 50% - 100% |
| Credit card limit assessment | 3.0% - 3.8% monthly |
| HECS-HELP | Full inclusion to disregard near payoff |
| Negative gearing add-back | Accepted or not |
| Retained company profits | Counted or ignored |
| Living expenses floor | HEM variants differ |
A worked difference
An investor couple with $180,000 salary, $35,000 rental income, a $20,000 credit card limit and $18,000 of HECS remaining:
- Lender A - 80% rental shading, HECS disregarded, 3.0% card assessment.
- Lender B - 70% rental shading, HECS in full, 3.8% card assessment.
The assessed surplus differs by several hundred dollars a month, which at a 9.5% assessment rate over 30 years is well over $200,000 of borrowing capacity - on exactly the same household.
What to do with this
If your application is constrained by serviceability rather than deposit, the lender you choose matters more than the rate you chase. The specific policies above are not published in comparison tables - they sit in credit policy documents brokers work with daily.
Before assuming you cannot borrow what you need, check whether it is your circumstances or that particular lender's calculator.
Frequently asked questions
Can I ask a lender for their calculator?
Most publish a consumer version that is heavily simplified. The full credit policy is not public, which is why brokers who work across a panel see these differences directly.
Does applying to several lenders help?
It creates multiple enquiries, which harms your file. Better to identify the right lender first through policy, then apply once.
Do all lenders use HEM?
Most use a version of the Household Expenditure Measure as a floor, but the variant and how it scales with income and household size differs, which is another source of variance.
Related reading
- Why Home Loan Applications Get Declined: The Top 12 Reasons
- Big Four vs Regional Banks vs Neobanks vs Non-Banks
- AFCA Complaints: How the Process Works
Sources
- Prudential Practice Guide APG 223 — APRA
- Household Expenditure Measure — Melbourne Institute
Rates checked as at 2 September 2026. Interest rates, lender policies and government schemes change frequently. Figures in this article are illustrative and were accurate at the date shown.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.
Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.
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