"Computer says no." Most people have heard it at some point. A form gets filled in, numbers go into a calculator and the answer comes back without anyone looking at the person behind it.
New figures from APRA (the banking regulator) show that isn't always where the story ends.
What the figures say
In the June quarter, 5.8% of new home loans were approved as exceptions to the lender's standard serviceability policy. That's up from 5.1% in March and 4.8% a year earlier.
'Serviceability' is the lender's test of whether you can afford your repayments. It includes a buffer in case rates rise. An exception means the loan fell outside the usual rules but the lender was still satisfied the borrower could repay.
Who might this help?
- A strong repayment history. You've made every repayment on time for years but a rate rise means you no longer pass the standard test to refinance. Some lenders will weigh your track record.
- A temporary drop in income. Parental leave or a short-term change in work might reduce your income for a while. Other evidence may show you can still meet the repayments.
The fine print
An exception is not a loophole and it's not a shortcut. The lender still has to be satisfied you can afford the loan (and so should you). Taking on a loan you'll struggle to repay helps nobody.
What the figures do show is that one lender's 'no' isn't every lender's 'no'. Policies differ from lender to lender. Knowing which lenders consider which circumstances is a big part of what a broker does.
Hot Tip: If you've been knocked back, don't apply again straight away with another lender. Multiple applications in a short time can show up on your credit file. Talk it through first.
Talk it through
Not meeting a lender's standard criteria doesn't necessarily mean you're out of options. Book a complimentary chat and we can look at whether another lender or an exception pathway might suit your situation.
Book a complimentary chatThis information is general in nature and does not take into account your objectives, financial situation or needs. All applications are subject to lender assessment and approval.
Frequently asked questions
It’s a loan approved outside a lender’s standard serviceability policy, where the lender is still satisfied the borrower can repay. APRA figures show 5.8% of new home loans in the June quarter were approved this way.
It’s better to get advice first. Several applications in a short time can show up on your credit file. A broker can check which lenders consider your circumstances.
Examples include borrowers with a strong repayment history who no longer pass the standard test to refinance, or people with a temporary drop in income such as parental leave. See our refinancing page for more.
