Bank said no, or offered less? How specialist lenders work

Why two lenders can give you two different answers

Every licensed lender and broker in Australia, bank or not, must meet the same responsible lending obligations. ASIC sets them out: ask about your situation, check your information, and make sure the loan is not unsuitable for you. Within that rule, each lender decides how to count your income, which living costs to allow, and how much of a safety margin to test your repayments against. That is why the same household could get noticeably different answers from different lenders.

Banks carry an extra layer of rules from APRA, the regulator that supervises them. APRA expects banks to test whether you could still repay if your rate were 3 percentage points higher than the rate you would actually pay. Since 1 February 2026 APRA has also limited how many new bank loans could go to people borrowing six times their income or more: no more than 20 per cent of a bank's new owner occupier loans, and 20 per cent of its new investor loans.

Specialist lenders that aren't banks sit outside APRA's supervision. The Reserve Bank has noted that some adopted the same 3 point buffer while others use their own way of testing repayments. They still have to meet ASIC's responsible lending obligations.

Who specialist lenders often help

The Reserve Bank's research found non bank lenders tend to focus on borrowers the banks serve less well, with a larger share of loans to self employed people and more loans assessed on lighter documentation. In practice, situations a specialist lender might look at differently include:

• Self employed with a short or uneven history, where income is shown through business activity statements, an accountant's letter or bank statements rather than two years of tax returns.
• A past credit problem, such as a default or late payments, that a bank's policy won't accept.
• Borrowing a high multiple of your income, where a bank is limited by the debt to income rules above.
• Income or property that doesn't fit a standard box, such as contract work, several income sources, or a property type some banks avoid.

What it usually costs

Specialist loans often cost more, because the lender is taking on more risk or funding itself differently. The Reserve Bank found non bank housing rates were about 0.6 percentage points above the major banks' on average between 2019 and 2021, widening to around 1 point in 2022. Some also charge higher fees, or ask for a bigger deposit for the same loan.

A specialist loan doesn't have to be forever

One approach worth discussing is to use a specialist loan to buy or refinance now, then move to a bank loan once the reason the bank said no has passed: two years of tax returns, a repaired credit history, or more equity in the property. Moving costs money too (discharge and application fees, and possibly mortgage insurance again), and no lender can promise to approve you later, so the plan should still work if you stay where you are.

How to weigh it up

1. Start with the banks. Know what you could borrow the standard way first, so you can see exactly what the specialist option adds.
2. Compare the full cost. Look at the rate, the fees and the comparison rate together, over the time you expect to keep the loan.
3. Ask whether a smaller bank loan would do. Sometimes a slightly lower price or a bigger deposit gets you a cheaper loan.
4. Plan the exit. Know what would need to change for you to move to a cheaper loan later, and what that move would cost.
5. Ask your broker why. Mortgage brokers must act in your best interests and explain why a recommended loan suits you (ASIC RG 273).

How Borrowable and Joshua fit in

Borrowable works out what you could borrow the way the major banks typically assess a loan today. That is your starting point. Joshua James works with Ace Lending Solutions and a wide range of lenders, from the major banks to specialist lenders, and can show you what each realistic option would look like, costs included, so you can decide with the full picture.