Ask three lenders how much you can borrow and you may get three different answers. The payslips, savings and credit file are identical, yet the figures can sit tens of thousands of dollars apart. That doesn't necessarily mean anyone made a mistake. Each lender runs your details through its own serviceability model, and small differences between those models add up quickly.
Knowing where the gaps come from can change which properties you inspect and how you prepare your application. It's also why many buyers speak with a broker such as ADA Financial Services, now part of Search Mortgages, who can compare how different lenders are likely to assess the same position before a formal application goes in.
Credit Policies Differ Within Regulatory Requirements
Every lender starts with the same question: once tax, living costs and existing debts are covered, how much is left for a mortgage? Banks must meet APRA's prudential requirements, and lenders providing regulated consumer home loans also have responsible lending obligations. Within those boundaries, each sets its own credit policy and risk appetite.
That's where the differences come from. One lender might count your overtime in full while another discounts it. One might assume a higher credit card repayment than the next. Credit policies also change during the year, so the lender that offered the most six months ago may not lead today.
Assessment Rates Can Differ Between Lenders
Banks must assess new borrowers at a rate at least three percentage points above the loan's product rate, and APRA confirmed in May 2026 that the buffer would stay at that level.
The regulatory minimum is the same across APRA-regulated lenders, but the result isn't. Because the buffer sits on top of each lender's own rate, a lender with a sharper product rate may test you at a lower assessment rate. Some lenders also apply a floor rate, which can override that difference. Non-bank lenders fall outside APRA's prudential standards, so some set their own buffers, although responsible lending obligations still apply to regulated consumer home loans.
The test matters more when rates move. Rate rises in 2026 have increased repayments for many variable-rate borrowers, and assessment rates have climbed with them. Your income can stay the same while your capacity shrinks.
Debt-to-Income Limits Add Another Variable
Since February 2026, APRA has limited banks to writing no more than 20% of new mortgage lending at a debt-to-income (DTI) ratio of six or more. The limit applies separately to owner-occupier and investor portfolios, and some loans are exempt, including owner-occupier bridging loans and loans to buy or build new homes.
This is a portfolio limit, not a personal borrowing cap. A bank can still approve someone above six times income, provided its overall share of that lending stays within the limit. In May 2026, APRA reported that high-DTI lending sat well below the limit across the system. If your application lands near that threshold, though, one lender may have more room than another.
How Lenders Treat Your Income
Base salary is straightforward. Almost everything else varies.
Take a nurse whose pay includes penalty rates and regular overtime. One lender may count all of it once there's a consistent history. Another may discount the extras or accept only base pay.
Rental income works the same way. Most lenders count only a portion to allow for vacancies and running costs, but the portion differs. Self-employed borrowers see even wider gaps. Some lenders want two years of tax returns and average them, while others will use the most recent year if it's higher.
Living Expenses Go Beyond the Benchmark
Most lenders compare your declared spending with a benchmark, commonly the Household Expenditure Measure (HEM), and use the higher figure as a baseline. HEM isn't a complete household budget, though. Lenders also account for relevant costs that may sit outside it, such as private school fees, child support or investment property expenses, and the way they apply benchmarks and loadings varies.
Bank statements fill in the rest. Lenders look at your overall spending levels, your ongoing commitments and whether your declared expenses match what the statements show. A noticeable gap can slow an application or reduce the amount offered. Before applying, review your last few months of statements and make sure your figures reflect how you actually spend.
Existing Debts Weigh Differently Too
Credit cards catch many borrowers off guard. Lenders assess the full limit rather than the balance and calculate a notional monthly repayment from it. A card with a $15,000 limit and nothing owing still reduces your capacity, and the assumed repayment rate isn't the same everywhere.
Car loans, personal loans and buy now pay later accounts all reduce what's left for a mortgage. Policies also differ on debts close to being paid off. One lender may exclude a loan you'll pay out at or before settlement, while another counts every repayment until the account is formally closed.
HECS-HELP works differently. The issue is usually the compulsory repayment, which reduces the income available for a mortgage. Under APRA guidance, banks may exclude those repayments when the debt is expected to be repaid soon, with 12 months given as an example. Lenders don't all apply that flexibility in the same way.
Using the Differences to Your Advantage
The highest figure isn't automatically the right one. A larger approval doesn't mean repayments will feel comfortable, especially if rates keep rising. Treat borrowing capacity as a ceiling and budget around repayments you can sustain.
Be careful about shopping around through formal applications. Each one can leave an enquiry on your credit file, and several in quick succession may make later lenders more cautious. Compare likely outcomes first, narrow the field, then apply to your preferred lender.
Weigh policy against price, too. The lender with the lowest rate may not assess your income the way you need, and the most flexible lender may charge more. The best fit usually balances both.
