Under the Consumer Credit Code, before creditors can approve borrower's application, they must carry out an assessment of his ability to service any loan without financial hardship.
Creditors refusing to extend loans to people whose repayments exceeding ⅓ of their gross income (such persons are considered to be "mortgage stressed").
[1] Lenders establish the maximum amount of debt that borrower can afford to take on given his current income by applying a debt-to-income ratio.
[5] Also, some creditors apply number of measures to "protect" borrower from any changing circumstances (interest rate rises, income reduction etc).
[5] Some creditors not consider property investors' tax benefits they receive if their loan is negatively geared.