20 Subtle Factors That Can Change Your Borrowing Power

When most people think about how much they can borrow, they assume it’s purely about income and expenses.

But in reality, borrowing power is shaped by dozens of hidden variables - and each lender interprets them differently. The result? Two people with identical financials could be approved for very different loan amounts (and sometimes different rates) simply because of how their situation is assessed.

Here are 20 lesser-known factors that can quietly change your borrowing power in today’s market.

1. Treatment of Self-Employed Income

Some lenders average your last two years of business income; others take the most recent year if it’s higher. For a growing business, that single difference can mean a much larger loan amount.

2. Addbacks for Non-Cash Expenses

Items like depreciation, amortisation and interest expenses can be “added back” to income - but not every lender handles these the same way.

3. Business Liabilities and Director Loans

Some banks count company debts against you personally; others exclude them if serviced by the business. The difference here can completely change the outcome for business owners.

4. HECS-HELP Debt Thresholds

Certain lenders ignore study loans under certain thresholds (e.g. under $20,000); others include them regardless. A minor balance can unexpectedly impact capacity.

5. Shading of Rental Income

While most lenders use 70–80% of your rental income, some accept up to 90–100% with supporting evidence - a big win for investors.

6. Negative Gearing Benefits

Some lenders factor in the tax benefit from negative gearing, effectively increasing your usable income for serviceability.

7. Treatment of Bonus, Overtime or Commission Income

One lender might count 50% of variable income; another could use 100% if it’s consistent. For medical, sales, or trade professionals, this is often decisive.

8. Longevity of Employment

If you’ve just changed jobs, some lenders want six months of payslips. Others are comfortable with just one, provided you’re in the same industry.

9. Residency or Visa Status

Permanent residents, temporary residents, and non-residents are all treated differently. Some lenders restrict maximum loan-to-value ratios (LVRs), while others specialise in these segments.

10. Professional Industry Recognition

Doctors, dentists, accountants, engineers and certain other professionals often qualify for premium loan packages - higher LVRs, waived LMI, and sharper rates.

11. Credit Card Limits (Not Balances)

Your limit matters more than your balance. A $15,000 limit can reduce capacity even if you owe nothing. Different lenders apply different repayment assumptions here (2% vs 3.8%).

12. Stress Test Buffer on Existing Loans

Each lender tests your ability to repay at a higher notional rate. While the regulatory minimum is 3%, some still use higher buffers - which can significantly reduce borrowing capacity.

13. Family Size and Dependents

Lenders use varied household expense benchmarks. For a family of four, those differences can change your borrowing power by $50,000 or more.

14. Secondary Income (Side Business, or Trust Distributions)

Some lenders won’t count it at all; others will accept it with evidence of consistency - even if it’s part-time or derived from investments.

15. Interest-Only vs Principal & Interest Treatment

Interest-only loans are assessed more conservatively, but the difference in approach between lenders can equate to a 10–15% swing in capacity.

16. Car Allowances

Some lenders treat a car allowance as additional income; others assume it offsets running costs and exclude it.

17. Short-Term or Airbnb Income

Certain lenders ignore short-stay income unless there’s a long-term lease in place; others accept it with verified statements and a track record.

18. Age and Remaining Working Life

Borrowers nearing retirement can face reduced loan terms with some lenders. Others allow longer terms if there’s strong evidence of future income or superannuation support.

19. Living Expense Verification

Some lenders rely on the Household Expenditure Measure (HEM) benchmark. Others forensically analyse your actual bank statements, which can work for or against you depending on your habits.

20. Debt Consolidation in Refinancing

Rolling smaller loans or credit cards into your mortgage can reduce monthly outgoings, improving serviceability - but not every lender allows this approach.

Why This Matters

Each lender’s appetite for risk, income types, and loan structures is unique. Understanding these differences can easily mean the gap between approval and decline - or between a conservative figure and your true borrowing potential.

It’s also why two borrowers with similar circumstances can walk into different banks and receive completely different answers.

Working with someone who understands these nuances can help ensure your application is positioned in the best possible light - not just for approval, but for long-term affordability and rate competitiveness.

If you’re thinking about buying, investing, or refinancing, it’s worth reviewing your situation through the lens of today’s lending environment.

If you’re planning your next move and want to see how much you could really borrow, reach out for a quick chat.

It’s often the small details that make the biggest difference.