No-one want’s to be rejected with the words “It’s not you, it’s me”, however that might be preferable to hearing “it’s just you”.

Yet that’s exactly what some banks have recently been saying, when in fact it’s probably been them.

Your loan will always be part of a bigger portfolio of loans. That means the bank is always assessing a risk bigger than just you. The more they lent in the good times, the greater their overall risk will be in the not so good times.

Recently there has been increased lending scrutiny of a type usually only seen in times when banks are concerned about a decline in the economy.

This is when their problem becomes your problem. How this shows up is that the discretionary component of the loan application plays a bigger part, even if you tick all the boxes on paper.

In other words, even if the loan application looks good, the lender might simply prefer to hang out for stronger loan applications.

Also concerned about lending risks are APRA and ASIC, the collective watchdogs of banks and credit licensees. And while they are the enforcers of responsible lending, they’re also the go-to excuse for when a lender doesn’t have room for any more risk – and wants to cherry pick only the strongest loan applicants.

As brokers, the best we can do is find lenders that actually want your debt; present the strongest possible case; and be guided by our experience of which lenders will follow their own lending criteria.

The guidelines that most banks are following at the moment is that when they work out your affordability for a 30 year loan, you need the ability to pay it off in about 17 years if interest rates stay where they are.

We’ve also found that older borrowers (even those with a realistic exit strategy) need a loan term that ensures the loan is paid off by the time the oldest borrower is 75 – even if they plan to sell the property well before that.

That means if you can get a loan at 55 it will need to be a 20 year loan, and as a buffer you will need the capacity to pay it off in about 14 years. And even with that affordability, some lenders still might ask for more.