Same job, same income, and the bank will now lend you noticeably less than it would have two years ago. It is not your imagination and it is not personal. Three mechanics explain most of the gap, and two of them you can do something about.
1. The assessment rate buffer
Lenders do not test you at the rate you would actually pay. They add a buffer on top and check you could still afford the repayments if rates climbed. So the rate that decides your maximum is materially higher than the rate on your loan.
When actual rates rose, the buffered assessment rate rose with them. Every increase compounds through a 30-year calculation, which is why a couple of percentage points on paper turns into a large change in the maximum loan.
You cannot argue with this one. What you can do is know that the buffer size and the way it is applied differ between lenders — which is one reason the same borrower gets meaningfully different numbers from different banks.
2. Expense benchmarks went up
Lenders compare your declared living expenses against a benchmark for a household of your size and income, and they assess on whichever is higher. Those benchmarks have risen with the cost of living.
There is a practical consequence: if your declared expenses are unrealistically low, you gain nothing, because the benchmark floor applies anyway. But if your genuine spending is above the benchmark, that higher figure is what gets used. Tidying up discretionary spending in the months before you apply is not gaming the system — it is presenting an accurate picture of what you actually spend.
3. Your commitments are assessed harder than you think
This is the one where people recover the most ground:
- Credit cards count on the limit, not the balance. An unused $20,000 card can cost around $80,000 of capacity. Closing it is an afternoon of phone calls.
- Buy-now-pay-later shows in your statements even where there is no limit to count, and many lenders read regular use as a signal about cash flow.
- Personal and car loans bite hard because the repayments are large relative to the balance.
- HECS counts as a commitment, though usually less than people fear.
What actually moves the number now
- Clear or shrink credit limits. The single fastest lever available to almost everyone.
- Pay out a small personal loan if you can do it without gutting your deposit. Removing a $600 monthly repayment does more than most people expect.
- Choose the right lender. The spread between the most and least generous assessment is often larger than anything you can change about yourself in six months — particularly if your income includes overtime, bonuses, casual work or self-employed profit.
- Check how your income is being counted. Some lenders take 100% of overtime for certain occupations where others take 80% or less.
The part worth keeping in perspective
A lower maximum is not the same as a worse outcome. The buffer exists because borrowers who maxed out at the bottom of a rate cycle are the ones who struggle when it turns. Being assessed at a higher rate than you pay is uncomfortable at application and useful for the next twenty years.
What matters is that the number you get reflects a lender whose rules actually fit your situation — not the first one you walked into.
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General information only — it does not take your objectives, financial situation or needs into account and is not credit assistance. Figures are illustrative. Assessment rates, benchmarks and policies vary between lenders and change over time. Easy Loan Finance is a Credit Representative (CRN 568863) of Beagle Finance Pty Ltd, Australian Credit Licence 383640.
