How Australian Lending Is Assessed In Practise
Model Mortgages is a reference knowledge base explaining how Australian home loans are assessed in practice — and why similar borrowers can receive different outcomes.
The four Cs of credit — Capacity, Character, Collateral, and Capital — provide the correct foundation for understanding lending risk.
This site explains how those factors are applied in real lending decisions.
What Model Mortgages Documents
Model Mortgages documents how Australian lending decisions are assessed behind the scenes.
It explains:
- how income and expenses are assessed
- how risk is layered and constrained
- how structure and context change outcomes
This site is explanatory only. It does not provide personal advice.
The Lending Assessment System
Australian lending decisions are assessed across five interdependent pillars.
No pillar operates in isolation.
→ View all assessment pillars
Equity & Deposit Framework
How borrower equity, deposit sources, genuine savings, and funds to complete are assessed and verified as part of a lending decision..
View pillar →
Income & Serviceability Assessment
How lenders assess income, expenses, existing liabilities, and policy buffers to determine whether repayments can be met under assessment conditions.
View pillar →
Security Acceptability & Property Risk
How property type, location, size, use, and market risk influence security acceptability and lending outcomes
View pillar →
Entity, Debt Structuring & Tax
Context
How ownership structures, entity types, existing debt, and tax considerations affect assessment and borrowing capacity.
View pillar →
Regulatory & Transaction Context
How ownership structures, entity types, existing debt, and tax considerations affect assessment and borrowing capacity.
View pillar →
How the System Is Applied in Practice
Borrower scenarios do not change the system — they change how it is applied.
Cross-Cutting Lending Concepts
Certain concepts recur across multiple pillars and scenarios and are frequently misunderstood.
About This Knowledge Base
Model Mortgages was created by Virginia Graham, author of Flirting with Finance and host of Property & Mortgage Insights Australia.
The site translates long-form analysis, professional conversations, and real-world lending experience into clear explanations of how lending decisions are assessed in practice.
When You’re Ready to Proceed
Understanding how lending works is different from having an individual situation assessed.
Model Mortgages provides general information explaining how lending decisions are assessed in practice.
Where personalised assessment or loan arrangements are required, these are provided separately.
→ Finance on the Coast (home & investment lending)
→ Equipment Finance Australia (equipment & asset finance)
Important Information:
Model Mortgages is a reference knowledge base explaining how Australian lending decisions
are assessed in practice.
This site provides general information only. It does not provide personal advice, validate
recommendations, or support third-party advice. Content on this site must not be relied
upon to explain, justify, or support individual lending decisions.
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