Why Serviceability, Not Your Deposit, Is What Holds Most Investors Back
Lenders test your loan at 3% above the real rate. Learn why serviceability stalls investors, and what you can do about it.
The short version
- Most investors who get stuck are not short of a deposit. They are short of serviceability: the lender’s view of whether you can afford the repayments.
- Lenders test your loans at a rate 3 percentage points higher than the real one.
- Existing debts, credit card limits and how much of your rent they count all change the answer.
- The right lender and the right structure can make a big difference.
Many investors think the hard part is saving a deposit. For a lot of people, it is not. They have the equity or the cash, then hear “sorry, we can’t lend you that much.” Here is why, and what you can do about it.
What is serviceability?
Serviceability is how lenders measure your ability to repay a loan. They take your income, subtract your living costs and existing debts, and see what is left. Then they test whether you could afford the new repayments if interest rates were 3 percentage points higher than your loan’s actual rate. APRA kept that buffer in place in May 2026.
What helps and what hurts
| Tends to help | Tends to hurt |
|---|---|
| Higher, stable income | High credit card limits, even unused ones |
| Fewer existing debts | Car loans, personal loans and buy-now-pay-later |
| A partner’s income as a co-borrower | High living expenses on your statements |
| Rent from the new property, which lenders usually count in part | Interest-only loans being assessed as if they were repaid over a shorter period |
| A lender whose policy suits your situation | Applying to the wrong lender first |
Lenders differ in how much of your rental income they count and how they treat other details. Many count only a portion of the rent. A broker can compare these policies.
Why the lender you choose matters
Every lender has its own rules. One may count more of your rental income, another may treat your bonus differently, and another may be stricter on credit cards. Two lenders can give the same person a very different borrowing limit.
That is why shopping around for the lender that fits your situation can matter as much as the interest rate.
What you can do about it
- Cut your card limits to what you really need.
- Clear small debts before you apply.
- Plan the order of your purchases. Each new loan reduces what is left for the next one.
- Get a clear picture of your spending, so it is not a surprise.
- Talk to a broker early, before you commit to a contract.
Get the Investor Serviceability Playbook
See what lenders look at, how to improve your position, and how to plan your next purchase.
Send me the playbookWe will email it straight to you.Your next steps
- List your income, debts and card limits.
- Decide the order of the properties you want to buy.
- Book a chat so we can check your numbers against several lenders.
Sources and when we checked
Figures checked on 16 October 2026. Sources: APRA (macroprudential settings, 28 May 2026); Reserve Bank of Australia (cash rate decisions in 2026). Lender policies vary. Rules, rates and thresholds can change, so confirm with the official sources or a broker before you act. This article is general information only and is not personal advice.
Want to talk it through?
Book a chat with Richard. He will listen first, then explain your options clearly. No pressure, no jargon.
This article is general information only and does not take into account your personal financial situation, needs or objectives. Consider whether it is appropriate for you before acting on it. Figures and rules can change, so always check the latest details with the relevant authority.
Richard Morris is a Credit Representative (CRN 570376) of Strategic Mortgages Perth (ACR 570592), authorised under Connective Broker Services Pty Ltd (Australian Credit Licence 389328). This is not tax or legal advice. Please speak to your accountant or solicitor about your own situation.