How Lending Is Assessed
in Australia
A structured reference framework explaining
how Australian lenders assess income,
expenses, assets, security risk
and policy sensitivity within credit assessment.
Why Lending Outcomes Differ
Many borrowers begin researching finance after a lender has already completed its assessment process.
In Australia, lending outcomes are not determined solely by interest rates or product selection.
They reflect structured credit assessment methods applied consistently across lenders.
Each assessment considers interaction between:
- income recognition and servicing capacity
- existing commitments and living expenses
- assets and available equity
- property security characteristics
- borrower profile and policy sensitivity
Understanding these assessment principles helps explain why similar borrowers may experience different lending outcomes.
The Model Mortgages Lending Framework
Australian lenders assess applications using structured evaluation models designed to measure repayment sustainability and risk.
Model Mortgages documents these mechanics through five core assessment pillars used across residential, commercial and asset finance lending.
The 5 Assessment Pillars of Australian Lending
The Five Assessment Pillars
Income & Serviceability
How income is recognised, verified and tested for repayment sustainability.
Expenses & Commitments
How living costs and existing debts influence servicing calculations.
Assets & Equity
How deposits, ownership structures and equity positions affect lending strength.
Security & Collateral Risk
How property characteristics influence lender risk acceptance.
Borrower Profile & Policy Sensitivity
How employment type, residency status, profession and scenario complexity interact with lending policy.
Lending assessment pillars describe what lenders assess.
Canonical lending questions explain how those assessments are applied in practice.
Understanding Lending Assessment Questions
Lending assessment is ultimately shaped by a series of recurring questions applied within lender credit policy frameworks.
Across thousands of lending scenarios, lenders consistently evaluate many of the same underlying considerations — regardless of borrower type, profession or loan purpose. Within Model Mortgages, these recurring assessment considerations are referred to as canonical lending questions.
A canonical lending question represents a commonly applied credit assessment factor used by lenders to evaluate repayment capacity, financial position, security risk and policy alignment.
Rather than operating in isolation, these questions typically interact and form recognisable patterns within lending assessment.
Model Mortgages organises these commonly recurring questions into ten structured canonical question clusters, reflecting how lenders interpret real-world financial scenarios.
The Ten Canonical Lending Question Clusters
- Income Recognition
- Living Cost Modelling
- Existing Debts
- Borrowing Capacity
- Deposit & Equity
- Credit Conduct
- Ownership Entities
- Security Risk
- Timing & Policy Changes
- Policy Sensitivity
Each cluster explains how lenders define risk, apply policy settings, calculate buffers and assess sustainable borrowing capacity.
Start With Structure
If you are reviewing your position:
- Begin at Start Here
- Identify which pillar dominates your scenario
- Review the relevant canonical cluster
- Then complete a structured snapshot
Model Mortgages provides the assessment framework.
Execution pathways operate separately.
A Structured Framework, Not a Comparison Site
Model Mortgages does not publish rates.
It does not rank lenders.
It does not offer instant approvals.
It explains structure.
When structure is clear, product selection becomes secondary.
Model Mortgages Pty Ltd
Australian Credit Licence 387460
Educational reference framework for Australian lending structure.
Authorship
Model Mortgages is authored by an Australian Credit Licence holder and reflects real-world credit assessment frameworks
applied across residential, commercial, and asset finance markets in Australia.
→ Author and professional background-
Part of the Model Mortgages Lending Framework
This page forms part of the Model Mortgages structured reference framework explaining how Australian lenders commonly assess income, expenses, assets, security risk and policy sensitivity under Australian credit policy settings.
The information provided is general educational information only and does not constitute credit advice, financial advice, legal advice or a recommendation.
It has been prepared without considering any individual’s objectives, financial situation or needs and must not be relied upon when making borrowing, investment or financial decisions.
Lending policies and outcomes vary between lenders and individual circumstances.
Model Mortgages Pty Ltd operates under Australian Credit Licence 387460.
Continue exploring the framework:
→ Explore the Five Assessment Pillars
→ Browse Canonical Lending Questions
© 2026 Model Mortgages Pty Ltd | Australian Credit Licence 387460 | ABN 82 108 681 063
General educational information only. Personal credit assistance is provided only through separate authorised engagement with Model Mortgages Pty Ltd.