Different Banks, Different Policies

Your borrowing capacity can swing by tens or even hundreds of thousands of dollars depending on the bank you apply with. That’s because each lender has their own credit policies — rules they follow when deciding how much risk they’re willing to take. Some of the biggest policy differences include:

Living Expenses Policy:

Some banks use the Household Expenditure Measure (HEM), while others scrutinise your bank statements and take your actual spending into account. This can make a big difference if your lifestyle spending is higher than average.

Income Assessment Policy:

– Overtime, penalty rates, bonuses, and commissions may be counted at 100% with one bank, but only 60–80% with another.

– Rental income might be shaded (reduced) by 20–30% at some banks, while others accept the full amount.

– Government benefits, allowances, or second jobs may or may not be included depending on the lender.

Debt and Liability Policy:

Credit cards are a big one. Some lenders assume you’ll max out your card limit each month, while others just assess what you actually owe. Even a $10,000 limit can slash borrowing power if a bank applies a harsher rule.

Interest Rate Buffer Policy:

Lenders don’t just test your repayments at today’s rate — they add a buffer of around 3% or more. If a bank sets a higher stress rate than another, your borrowing power with them will shrink.

Age and Loan Term Policy:

Some lenders reduce loan terms for older applicants, while others allow full terms if there’s a clear repayment strategy. This is especially important for mature buyers and investors.

Why Investors Notice the Difference More

Property investors in NSW often experience the widest gaps in borrowing capacity. That’s because investment loans involve extra factors like:

– How rental income is assessed.

– Whether negative gearing benefits are included.

– The way different lenders look at multiple properties.

👉 If you’re considering investing, check out our guide on NSW Investor Loan Strategies for 2025
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How a Mortgage Broker Can Help

Going directly to one bank limits your options — and could mean missing out on your true borrowing potential. A mortgage broker like Truth Group I compare lenders for you, matching your profile with the ones most likely to give you the capacity you need.

I don’t just look at the rate; I look at the lender policy behind the numbers. That way, you don’t waste time with applications that will get knocked back.

Preparing to Maximise Approval

The key to boosting your borrowing power is preparation. Before applying, make sure you’ve:

– Reviewed your income and expenses.

– Minimized unused credit limits.

– Gathered the right documents.

👉 To learn more, see our article on How to Prepare Your NSW Home Loan Application in 2025
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Final Thoughts

Your borrowing capacity isn’t a fixed number — it depends on the lender, their policies, and how your finances are presented. By working with Truth Group, you’ll have a clearer strategy, better chances of approval, and more options for building your property portfolio.

And it doesn’t stop there — as a buyer’s agent, I can also help you find, shortlist, and negotiate the right property once your finance is sorted. That way, you’re not only maximising your borrowing power, but also making smart decisions about where and what to buy.