How Home Loans Are Assessed
How lenders assess home loan applications
Home loan decisions are assessed using structured credit frameworks that consider borrower income, deposit position, property security, ownership structure, and policy settings.
While the underlying credit logic is consistent across lending types, residential property lending places specific emphasis on serviceability models, deposit sources, and property acceptability.
This page explains how those factors are assessed and how they interact.
The home loan assessment framework
Home loan assessment applies the universal credit framework — including the Four Cs of Credit and assessment pillars — with additional rules specific to residential property.
Key differences in home loan assessment include:
- standardised serviceability models and buffers
- defined rules around deposit sources and genuine savings
- property-type and location acceptability
- ownership structures and guarantees
- reassessment triggered by policy or rate changes
This framework is applied consistently, but outcomes can vary depending on structure, timing, and risk profile.
What lenders focus on for home loans
When assessing a home loan, lenders place particular weight on the following areas.
Serviceability & buffers
How income is assessed, expenses are modelled, and buffers are applied.
Deposits, genuine savings & LMI
How deposits are sourced, verified, and treated at different LVRs.
→ Deposits, Genuine Savings & LMI
Property acceptability & location risk
How property type, use, and location affect security assessment.
→ Property Acceptability & Location Risk
Ownership structures & guarantees
How ownership, borrowers, guarantors, and entities affect outcomes.
→ Ownership Structures & Guarantees
Policy shifts & reassessment
How changes in policy, rates, or borrower circumstances trigger reassessment.
→ Policy Shifts & Reassessment
How borrower scenarios are assessed
Different borrower situations interact with home loan policy in different ways.
Rather than changing the assessment framework, scenarios affect how the same rules are applied — particularly around income treatment, deposits, and security.
Examples include:
Detailed scenario explanations are covered separately in the Home Loan Lending Scenarios section.
How to use this section
- Use this page to understand how home loans are assessed overall
- Explore individual focus areas for specific mechanics
- Refer to lending scenarios to see how the same framework applies in practice
This page provides general information about how home loan assessments work. It does not provide personal advice, product recommendations, or lender selection.