Loan serviceability
Serviceability
A lender’s assessment of whether you can afford a loan and keep making repayments under stress.
What Serviceability means
The lender tests income, living expenses and existing debts, then assesses repayments at a higher rate than the loan rate to leave a safety margin.
Why it matters
Serviceability can cap borrowing even when you have a large deposit or substantial equity.
Timing changes the answer
APRA-regulated banks must currently apply a mortgage serviceability buffer of at least 3.0 percentage points above the loan rate, unless APRA determines otherwise. Lenders also apply their own assessment rules.
A definition cannot see your position. Heyward can.
Start with: “What is constraining my serviceability and which inputs matter most?”
Sources
Primary & official where availableGeneral educational information only. It does not account for your objectives, financial situation, legal position or tax circumstances.