17/08/2026
52 things I wish I knew about property - Part 4 Your income isn’t the main thing that gets you approved
High Income ≠borrowing capacity.
After tax, living expenses and all existing and proposed commitments — assessed under our stressed repayment assumptions — is there enough surplus?
And someone earning $120k with no debt and low commitments can sometimes be in a stronger borrowing position than someone earning $180k with substantial commitments.
The easiest rule to remember
HEM = ordinary day-to-day household living costs.
The easiest rule to remember
HEM = ordinary day-to-day household living costs.
Outside HEM = major financial commitments or additional costs specific to that client’s circumstances.
So groceries, utilities, basic transport, clothing and general recreation → normally within HEM.
Whereas $15k/year private school fees, childcare, child support, existing debts, etc. → don’t assume HEM takes care of them; identify them separately.
Conduct — How the accounts are being managed. Look for dishonours, overdrawn accounts, late payments, missed direct debits, arrears or persistent low balances.
Commitments — Regular financial obligations. Look for loan repayments, credit cards, BNPL, HELP-related deductions where visible, child support, rent, leases and other recurring commitments.
Costs — What the client is actually spending. Look at groceries, eating out, transport, subscriptions, childcare, school fees and other living expenses to check whether declared expenses appear reasonable.
Credit — Evidence of credit facilities or debts that may not have been disclosed. For example, repayments to another lender, Afterpay/Zip, personal loans or credit-card payments.
Character — Overall financial behaviour. You’re looking for patterns that could indicate higher risk, such as frequent gambling transactions, repeated cash advances, consistent overdrawing or unexplained large transfers.
I earn $180k. The bank still said no. Income isn’t the problem most people think it is — it’s everything else on the file. Want the full breakdown of what actually gets checked before you apply? DM me and I’ll walk you through it. 👇 #
