Being outside a lender's standard borrowing criteria doesn't always mean your home loan application will be rejected.
New figures from APRA, the banking regulator, show that 5.8% of loans funded in the June quarter involved exceptions to lenders' standard serviceability policies, up from 5.1% in March and 4.8% a year earlier.
Serviceability is a lender's assessment of whether you can afford your mortgage repayments, including a buffer for possible rate increases.
In some cases, a lender may approve a loan that falls outside its usual serviceability rules, provided the borrower can still demonstrate an acceptable ability to repay.
Why this could be encouraging
A borrower with a strong repayment history might be able to refinance even if they don't satisfy the usual assessment requirements.
Similarly, someone experiencing a temporary income reduction might have other evidence demonstrating their ability to repay.
The increase suggests some borrowers are securing loans through exceptions to standard policies – although lenders still need to be satisfied they can afford the repayments.
Not meeting a lender's standard criteria doesn't necessarily mean you're out of options. Reach out and we can discuss whether another lender or a suitable exception pathway might be available.
