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Why did the bank say no to my home loan?

Bayley Clarke · Mortgage broker on the road · Last checked 25 August 2026 · 5 min read

If your bank just said no and all you got was one line about their criteria, that line was never going to tell you anything.

They said I didn't meet their criteria. That's all I got.

Most lenders won't say which bit of their policy your file tripped. It didn't meet their criteria. It is not that you are someone who gets declined.

Your file came up short on one page of one lender's rulebook, and the front desk can only ever show you that rulebook. The rest of that story is on the loan rejection answer.

I earn plenty. Why did they only count some of it?

The bank's going to go, okay, here's your pay, and then it starts crossing bits out. Unpredictable gets shaded.

• Casual hours. Most lenders want around six months in the same casual job, then some count fewer weeks of the year than you actually work.
• On probation, or just switched jobs. Most lenders are fine with it in the same industry. Some want probation finished, and a gap between employers can tip it.
• Your bonus. Most lenders count around 80%, and a lot average two years or take the lower one.
• Shift penalties, allowances and overtime. Typically the same 80% haircut, and some lenders count irregular loading at nothing.
• Working for the family business. Payslip, plus that wage on a lodged tax return before the bank will rely on it.

Same payslips, different desk, different answer.

I don't even use that card. Why does it matter?

The bank doesn't count what you spend. It counts what you could spend tomorrow.

• Credit card limits. For every thousand dollars of limit, not balance, limit, times it by five. Rough rule of thumb for what comes off your borrowing capacity. Cutting it only helps if you don't run it back up.
• Afterpay and buy now pay later. A lot of lenders treat the limit like a card limit. One account won't stop you. Four stack.
• The car loan. A fixed repayment counted in full, and a big slice of capacity goes with it.
• HECS. It's all about how much you earn, not how much you owe, so a higher wage means a bigger deduction.
• Living at home, paying no rent, buying a place you won't live in? Most lenders add a rent line anyway. They're assuming you won't be at mum and dad's forever.

My credit score is bad, so I assumed that was it.

It's less about the score and more about what your credit file actually shows. An outstanding default, or missed repayments on a car loan, tells the bank you don't pay on time. A low number on a clean file is usually not the barrier.

Then there's the enquiry pile. Too many applications in one month can be the reason on its own, so reapplying blind can turn one no into three.

Pull your own file first. Clean, and the no came from somewhere else on this page. Not clean, and it's the file that has to change, not the lender.

I've got the deposit. It just wasn't in the account long enough.

The last thing a bank wants to see is 30 grand in savings from one day to the next. A lot of lenders want around 5% of the price built up over roughly three months. Gifted money is a flat no for that test at most lenders.

No deposit at all? Without family willing to put their property up as extra security, you can't really buy with a $0 deposit. Pick your hard. Normally it's the three months, or the guarantor.

It's a great little place. Why won't they lend on it?

• Tiny homes. On a trailer, with a rego, most lenders see a vehicle, not a dwelling, until it's fixed to land and connected to services.
• Vacant land. It earns nothing and houses nobody, so a lot of lenders won't go above 80% and want 20% plus costs.
• A loan above 80% of the value. Mortgage insurance usually gets added and pricing is often higher. The easier refinance test, with a smaller buffer on your repayments, stops at 80% at most lenders.

The property tripped the gate, not you.

I've got equity. Why isn't that enough?

Equity does not equal borrowing power. Just because it's there doesn't mean you can use it. Pulling it out is a new loan, so the bank still has to see income that repays the bigger number. It's an income versus expense conversation.

So what do I do now? Apply somewhere else?

Not blind. You don't want to keep spamming applications to a bank. That's not going to do you any favours. Every one lands as an enquiry on your file.

Find your gate above. Then it's one application, to a lender whose policy lines up with what your financial world actually looks like. Not three to find out why. How soon you can go again comes down to the reason for the first one: how soon can I reapply after a decline?

What to bring to the call

The decline letter, even if it's one line. Your last few payslips. Every debt and every limit, including the card you never use and the buy now pay later accounts. Where the deposit came from and how long it's been there. The property address, if there is one.