A practical guide to borrowing readiness in the current market
As we move into 2026, the lending landscape continues to evolve. While interest rates still dominate headlines, it’s the less-visible lending criteria that often determine whether an application is approved quickly, delayed, or requires additional information. The positive news is that many of these factors are within your control, and understanding them early can make the process smoother.
Whether you’re buying your first home, refinancing, or growing your business, understanding what lenders are looking for can help you prepare with confidence.
Bank behaviour after recent APRA changes
Recent updates from the Australian Prudential Regulation Authority (APRA) in mid-2025 have reinforced key expectations around responsible lending, and these are shaping how banks assess applications heading into 2026.
Two developments stand out:
- Reinforced 3 per cent serviceability buffer
APRA reiterated that authorised deposit-taking institutions (ADIs) are expected to test a borrower’s ability to repay a loan at least 3 per cent above the actual interest rate. This reinforces lenders’ focus on long-term resilience and ensures borrowers can manage changes in economic conditions.
- Clarification on HELP (HECS) debt treatment
APRA also clarified that lenders should assess HELP debt based on the borrower’s actual repayment amount rather than using higher assumed figures. For some borrowers, this may improve borrowing capacity or reduce unnecessary shading of income.
Together, these settings highlight that lenders remain focused on stability and sustainability. For borrowers, this underscores the importance of strong, consistent financial behaviour and clear documentation.
Spending habits and financial behaviour
Heading into 2026, lenders continue to rely on bank statements to understand a borrower’s financial conduct. Whether reviewed directly by the lender or summarised through a broker, the last 3–6 months of financial activity offers a realistic picture of income, expenses, and ongoing commitments.
Key areas they consider include:
- Patterns of discretionary vs essential spending
- Buy-now-pay-later (BNPL) usage and short-term credit activity
- Recurring commitments, such as memberships, school fees, or existing loan repayments
- Consistency of savings behaviour, especially for those building a deposit
The focus is not on being perfect. Instead, lenders look for predictability, capacity, and overall responsibility.
Responsible spending over time makes a difference
Rather than “tightening up” right before applying, the goal is to demonstrate healthy, sustainable financial habits. This includes:
- Being mindful of recurring BNPL and other short-term credit arrangements
- Avoiding major discretionary purchases when you know you will soon apply for finance
- Showing regular savings contributions over time
- Ensuring your recurring commitments align with long-term affordability
This approach builds a clearer, more accurate picture of your financial position and supports a stronger application.
Documentation that tells a clear, complete story
Strong documentation remains essential heading into 2026. Accurate, complete information speeds up assessment times and helps lenders understand your financial position.
Depending on your situation, lenders may request:
- Payslips and employment contracts
- Tax returns, financial statements, and BAS (for self-employed borrowers)
- Bank statements showing income and expenses
- Statements for existing loans and liabilities
- Proof of savings or deposit sources
- Identification documents
The more accurate and complete your documentation, the smoother your approval process is likely to be.
Credit scoring and how it shapes your options
Lenders assess credit history to understand how reliably a borrower manages their financial commitments.
They consider:
- Repayment history across loans, credit cards, and utilities
- Recent credit enquiries, including the number and timing
- Any late payments or defaults
- Total available credit limits
- Overall credit conduct over time
A healthy credit score helps keep lending options open, while a poor score can restrict or even prevent access to finance. Paying bills on time, limiting unnecessary credit applications, and reducing unused credit limits can all help maintain strong credit conduct.
Bringing it all together
The lending landscape heading into 2026 rewards borrowers who are proactive, organised, and consistent. It’s much less about quick fixes, and far more about long-term responsible financial habits.
At AP Finance, we help borrowers get lending-ready with confidence. That includes reviewing your situation, explaining what lenders will look for, and matching you with the loan products that best support your goals.
If you’d like support understanding your borrowing capacity or preparing for a loan application, we’re here to help.
Written by Andrew Whelan, General Manager – AP Group
AP Group are the leading pharmacy experts in Australia and specialise in helping first time buyers find the right pharmacy and secure the finance to support their purchase.
We connect existing owners with over 5000 ready and eager investors via our cutting-edge online Data Room. Our Data Room keeps confidential listing data secure and allows buyers to make informed decisions on each of our pharmacies for sale.
AP Group have built connections with all the major banks and a host of smaller lenders, ensuring that first time pharmacy buyers find a better deal.
About the Author:
When Andrew Whelan is not out pedalling his bike or looking after his two marvellous kids, he’s pedalling through pharmacy finance and strategy development.
Having been with AP Group since the beginning, Andrew has more than a decade experience in pharmacy and is an asset to the sales and finance division. He’s a numbers wizard, people person and sustainability champion — leading AP Group to achieve official Carbon Neutral Certification with Climate Active.
Before AP Group, Andrew spent more than a decade in the telecommunications and media industry including 7 years at Telstra in a variety of senior management roles and 3 years in the United Kingdom managing the commercial function for the British Sky Broadcasting — a time where it was the fastest growing broadband provider in the UK.
So it’s no surprise that he is well equipped to help customers with some of the biggest decisions they will ever make — buying a home or investing in a pharmacy — and helping to show them what’s truly possible.