Recently we were reviewing a case with a client who wanted to buy an apartment.

The income was solid, and the deposit was in place. At first glance, it looked like a straightforward application.

But the bank identified a problem: insufficient serviceability.

The reason turned out to be unexpected. The bank calculated 100% of the household expenses, even though the client shared them with a partner.

Formally, it looked like this:

The client’s income was fine.

But the entire household expense load was attributed to them.

As a result, the assessment suggested that servicing the loan would be difficult.

And this is where an interesting nuance of credit policy comes into play.

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What is Apportioning of Commitments

In some situations, banks can apply the principle of apportioning of commitments.

This means that when calculating serviceability, the bank may consider only the borrower’s share of expenses, rather than the full household budget.

For example:

Total household expenses

$4,000 per month

If the bank counts the full amount

→ serviceability looks weaker

If apportioning is applied

→ only the borrower’s share is counted, for example $2,000

The difference in the calculation can be significant.

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What Can Be Shared Between Partners

Depending on the bank’s credit policy, this may apply to:

• Household living expenses

• Repayments on joint loans

• Other shared financial commitments

Each bank interprets these situations slightly differently. Major lenders such as Commonwealth Bank, Westpac, and ANZ may apply different approaches when assessing serviceability.

That’s why one bank may decline an application, while another may approve the exact same borrower.

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How the Client’s Situation Was Resolved

When we recalculated the client’s serviceability using apportioning of expenses, the picture changed.

Expenses that had initially been counted in full were redistributed between the partners.

After that adjustment, the client’s serviceability met the bank’s requirements.

Situations like this happen more often than people think.

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Why Buyers Rarely Know About This

Most people assume the mortgage calculation is very simple:

income – expenses = ability to service the loan

In reality, banks use far more complex assessment models. These frameworks are influenced by regulatory guidelines from the Australian Prudential Regulation Authority (APRA).

Within those models, there are many nuances in each lender’s credit policy.

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What Property Buyers Should Keep in Mind

If one bank says your serviceability isn’t strong enough, it doesn’t always mean the loan is impossible.

Sometimes the issue isn’t income — it’s how the expenses are assessed.

The right application structure and the right choice of lender can completely change the outcome.

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If you’re interested, I can share a few more less obvious credit policy nuances that sometimes make the difference between a decline and an approval.

In the comments, let me know which topics you’d like me to cover next.

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