How Lenders Assess Property, Business & Asset Finance in Australia
Model Mortgages is a reference site explaining how lending decisions are made — across structure, policy, risk, and timing. This site is designed to be used like a reference, not a guide. Pages stand alone and can be read in any order.
What this site is
Model Mortgages explains the assessment logic lenders use when making decisions about:
- home loans and first home buying
- investment property
- portfolio and sequencing decisions
- complex and non-standard income
- business and equipment finance
It focuses on how decisions are made, not what someone should do.
You can read any page independently.
There is no required starting point.
What this site is not
Model Mortgages does not:
- recommend lenders or products
- compare rates or loan options
- assess your personal eligibility
- replace licensed advice
This site explains the lending system itself.
Applying it to a specific situation is a separate step.
Why this site exists
Most public lending information focuses on products, rates, or simplified examples.
In practice, lending decisions are shaped by assessment frameworks, policy interpretation, structure, and timing — factors that are rarely visible until after an outcome occurs.
Model Mortgages exists to document those mechanics clearly and without product bias, so lending outcomes make sense when they happen
How lending decisions are actually made
Lending decisions in Australia are not based on a single rule, calculator, or interest rate.
Lenders assess applications using structured credit frameworks designed to test risk, sustainability, and policy compliance under stressed conditions.
They are not asking:
“Can this person afford the loan today?”
They are asking:
“Can this loan be repaid over time, under stress, in line with policy?”
To answer that, lenders assess multiple areas together, including:
- how income is treated and stress-tested
- existing debts and commitments
- deposit and equity position
- security quality and property risk
- borrower profile and stability
- policy settings at the time of assessment
Strength in one area does not override weakness in another.
Start with the question you’re trying to understand
Most people don’t need a step-by-step guide.
They need clear answers to the specific question blocking them.
The pages below explain the questions people most often get wrong.
Assessment explainers (canonical answers)
- Why borrowing capacity caps out
- How income is assessed (PAYG, bonus, overtime, self-employed)
- Why higher income doesn’t always increase borrowing power
- How serviceability buffers actually work
- Why offset vs redraw matters to lenders
- Why sequencing affects future borrowing
- Why reassessment changes outcomes
- Why expat and overseas income is treated differently
Browse all assessment explainers
These pages explain why outcomes differ — not what to choose.
The shared credit assessment framework
Most lenders use variations of a shared assessment framework.
This framework is commonly described using the Four Cs of Credit, supported by assessment pillars that test risk from different angles.
Together, they explain:
- why similar borrowers receive different outcomes
- why outcomes change over time
- why decisions can’t be reduced to a calculator
How lending is assessed (framework overview)
Orientation: how home loans actually work (optional)
If you want a big-picture explanation of how property and lending decisions play out in practice — including common mistakes, sequencing issues, and reassessment — you can use the orientation page below.
This is a reference page.
You do not need to read it in order.
How home loans & property finance actually work in Australia
Mapping where you sit (optional)
Different people are constrained by different parts of the lending system.
If you want to see which assessment areas matter most in your situation, you can create a structure snapshot.
This:
- is not a loan application
- does not provide recommendations
- does not assess eligibility
It maps structure, constraints, and sensitivities only.
Create a structur snapshot
Technical reference material
For detailed mechanics and definitions:
Product fact sheets (technical reference)
- loan types and purposes
- repayment structures
- offset and redraw
- fixed vs variable
- ownership and structure basics
These explain features and mechanics, not suitability.
How to use this site
- You do not need to read everything
- Pages stand alone
- Use search freely
- Follow links only where relevant
This site is designed to help you understand how the system works, so you can make informed decisions when you’re ready.
Applying this information in practice
Model Mortgages explains how lending decisions are assessed.
Applying those principles to a specific situation requires licensed advice, full financial context, and current policy interpretation.
Many readers use this site to understand the system first — and then work with a licensed broker to apply that understanding when they’re ready.
Authorship
Model Mortgages is authored by an Australian Credit Licence holder and experienced mortgage professional, and reflects real-world lending assessment frameworks used across residential, business, and asset finance.
Important note
This site provides general information only.
No personal advice or recommendations are provided.
Model Mortgages
A reference site explaining how property and lending decisions actually work in Australia — across structure, policy, risk, and timing.