Serviceability

A lender's assessment of whether you can afford the loan repayments under stress-test conditions.

Serviceability is the calculation lenders use to decide your maximum loan amount. APRA requires Australian lenders to add a 3% serviceability buffer on top of the actual interest rate when stress-testing applicants — so a 6% headline rate is assessed at 9%. Lenders also haircut bonus income, rental income and casual employment, and apply HEM (Household Expenditure Measure) benchmarks to your declared expenses.