Because no two lenders assess income the same way. The payslip is identical, but the number each lender turns it into for lending purposes rarely is, sometimes by tens of thousands of dollars of borrowing capacity.
A worked example
Take a client on a $95,000 base salary plus roughly $18,000 a year in overtime, fairly consistent over two years. One lender’s policy might count 80% of that overtime; another might count only 50%, or ask for a longer history before counting any of it. On overtime alone, that’s a difference of roughly $5,400–$9,000 a year in income the servicing calculator actually “sees”, before it’s even run through each lender’s own assessment rate and expense treatment.
Three places the numbers diverge
Servicing calculators. Each lender runs its own model combining income, debts and living expenses into a maximum-loan figure. The assessment interest rate (usually a buffer above the actual rate offered), the inputs it accepts, and how it weights them are set independently by each lender, not by one shared industry formula.
Income shading. Overtime, commission, bonuses, rental income and casual earnings are common candidates for “shading”, being counted at a percentage of face value rather than in full. Across lenders, shading percentages and the history required to qualify for them vary by lender, by income type, and sometimes by how long you’ve been receiving that income.
Expense benchmarks. Lenders compare your declared living expenses against a benchmark figure (commonly derived from the Household Expenditure Measure) and use whichever is higher, or a blend of the two. How that comparison is structured, and how existing debts and credit-card limits factor in, differs by lender policy.
| Income element | What can vary by lender |
|---|---|
| Overtime / commission | Shading percentage and minimum history required |
| Rental income | Percentage counted, and whether a vacancy allowance is applied |
| Casual / second job | Whether it’s counted at all below a minimum tenure |
| Existing credit limits | Whether the limit or the balance is used in the expense test |
What to prepare
- Payslips covering enough history to show a pattern, not just a snapshot
- A simple list of other income (overtime, bonus, second job, rental) with roughly how long you’ve received each
- Current limits (not just balances) on any credit cards
- An honest monthly living-expense estimate, understating it rarely helps, since most lenders benchmark it anyway
None of this means applying everywhere and hoping one sticks. It means the research on which lender’s policy actually fits your income mix is worth doing before an application goes in, not after a decline.
Next step: the Calculator Lab‘s repayment and LVR tools give you a starting estimate; borrowing-capacity assessment itself depends on the lender-specific factors above, which is exactly what PolicyMatch researches against your actual scenario. Talk with KartikKumar about your specific income mix.