Serviceability
Serviceability is a lender's test of whether your income can meet the proposed repayments after tax, living expenses and existing debts, assessed at a rate higher than the one you will pay.
Serviceability, explained.
Every lender runs its own version. Income is counted according to policy (salary in full, bonus and overtime often in part, rental income shaded), living expenses are the higher of what you declare and a benchmark for your household, and existing debts include credit card limits whether or not you use them.
The repayments are tested at your rate plus a buffer, currently at least 3 percentage points under prudential guidance. That is why a borrowing estimate at your actual rate overstates what a lender will approve.
Tools that use this term.
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A finance review starts with a conversation and a written position from Dayan Kasturiratna, who provides the credit assistance on every file. No credit check to start.
The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
