How Does Income Impact My Serviceability Assessment?

What's classified as income and what to do if your income changes.

A serviceability assessment is completed to determine whether you can afford the repayments on your loan. When a serviceability assessment is being completed, your income is one factor that can impact the result of your loan application.

What kind of payments are classified as income?

Income is classified as payments that are regular and ongoing, and can come from a number of sources including PAYG employment, self employment, rental income and government payments.  

Specifically, we consider:

  • Permanent employment base salary: This is the regular salary that you earn from your employer. It can be full-time or part-time.
  • Allowances: These are payments that are made to you in addition to your base salary. They are usually related to the type of work that you do, such as motor vehicle allowances or shift allowances.
  • Overtime for emergency frontline employees: This is overtime that is paid to emergency frontline employees, such as firefighters, police officers, and paramedics.
  • Commission: This is a payment that is made to you based on the amount of sales that you make.
  • Bonus / Short Term Variable Reward (STVR) payment: This is a payment that is made to you in addition to your base salary for performing well or reaching a specific target.
  • Casual, Temporary & Seasonal work: This is work that is not permanent. Casual employees do not get paid sick or annual leave, and their hours of work may vary. Temporary employees are usually employed for a specific period, such as six months or one year. Seasonal employees are only employed during certain times of the year, such as during the summer or winter.
  • Rental income: This is the income that you earn from renting out a property including rental income received under the National Rental Affordability Scheme (NRAS).
  • Self-employment: This is when you work for yourself and earn income from your own business. Additionally, income received via a holding company or trust are allowable provided the income is transferred into the borrower’s personal accounts.
  • Government payments and pensions: This is income that you receive from the government including:  
  • Aged Pensions, Veteran Affairs Pensions, Disability Pensions, Widows Pensions
  • Family Tax Benefit Part A & B
  • Carer’s Income
  • Supplement Payments
  • Investment income: This is income that you earn from investments such as dividends from shares and distributions from managed funds.
  • Income from Superannuation Fund: This is income that you receive from your superannuation fund.  

Learn more about what documents can be used to verify your income here.

What is excluded from income classification?

Unacceptable income includes:

  • Workers' compensation
  • Income protection insurance
  • Foreign currency income
  • Scholarships
  • Superannuation payments from Self-Managed Superannuation Funds (SMSFs)
  • Credit interest on cash balances
  • Income from individual room rental and board
  • Income from proposed future investments
  • Guarantor income / servicing support / servicing guarantee

What happens if my income changes?

Your income can change based on a number of factors including:

  • Parental leave
  • Maternity leave
  • A temporary reduction in working hours, or sabbatical, etc.

If your income changes, you should let us know as soon as possible by contacting us or updating your information in the digital application.

Learn more about serviceability assessments and how it’s calculated here.

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000.

Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement.

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.

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