The new tech that could help get your mortgage approved

November 15, 2025 — 5.09am

Have you clocked the unexpected thing that rate cuts accomplish? They unlock mortgage prison. While previously you might not have been able to refinance because you could not clear the 3-further-per-cent capacity hurdle to qualify, now you might.

And you should try. As I wrote last week, the average variable mortgage rate is charging 6.13 per cent, Mozo says. Meanwhile, the best – quality, comparable products with offset accounts – are way down at 5.2 per cent.

Getting approved for a home loan these days is no easy feat.Credit: Istock

Lenders offering deals at that level include Up, Tiimely Home, G&C Mutual Bank/Unity Bank (for essential workers) and Bank of China, while Police Credit Union and People’s Choice come close.

What difference would it make to refinance? Assuming you move a fairly typical $600,000 loan from 6.13 to 5.2 per cent, your $3914 minimum monthly repayment would fall to $3578. That is a monthly difference of $336.

But that word “capacity” that I used at the start is key. You should think of it as a question about the “fat” in your finances. And it’s not just the extent of your interest obligations that affects this; it’s also the expense of your day-to-day life.

Those two things, in tandem, are what determine whether you’ll get a loan over the line – or not.

Whatever your situation, it’s vital you don’t apply for a loan until your budget is ready.

Under what’s formally known as a serviceability assessment – and unofficially, as the stress test – you need to prove to a lender that you could cope with 300 basis points of interest rate rises from where we are today.

Last week, a new fintech product launched that might greatly help those trying to prove their level of serviceability. Called WealthX, it gives prospective borrowers a real-time picture of their income and expenses, then translates that into a dynamic picture of their borrowing power.

In other words, if you indulge a bit too much, you see immediately that it’s docking what a lender will advance you.

Loading

You should already know, when applying for a loan, about the “Netflix test”. This is an assessment of your optional or discretionary spending – how much you go out, or order in, your streaming services and all the other luxuries we love, which spans the three months before applying for a loan.

It is – along with your fixed costs, including a potential minimum mortgage repayment – what tells a lender if your finances could stretch to that “3 per cent higher” repayment.

Now, rather than cutting back where you can in the three months before you apply for a loan and saying a Hail Mary that you’ve done enough, apps such as WealthX show you exactly how you are tracking. And how much your every spending decision affects your future loan size.

Whatever your situation, it’s vital that you don’t apply for a loan until your budget is ready – otherwise, you risk not being approved for nearly the amount you want. Even more seriously, a loan rejection will push down your credit score and make you less likely to be approved next time.

The technology behind these apps hinges on a thing called open banking, which essentially lets third-party apps and services patch into your bank accounts to interrogate and transact with them.

No, that’s not as sinister as it sounds: syncing other products to your accounts can be the ticket to optimising your finances. It’s how, for example, round up and micro-investing apps work: they deduct and invest what you tell them to – in the background of your busy life.

On the home loan front, there is now no escaping the comprehensive data scraping that is the Netflix test, but borrowers are gaining better control over it.

Nicole Pedersen-McKinnon is author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, X and Instagram.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.

Most Viewed in Money

Loading