Ask three lenders what you can borrow. Expect three answers

Send identical financials to three lenders and three different numbers come back. People usually assume someone has made an error. Nobody has — you have simply met three different sets of rules.

Nobody uses the same maths

Each lender runs your figures through its own servicing calculator, and no two of those calculators agree. Three things move the number more than anything else.

How far they stress you. No lender tests you at the rate you will actually pay. They add a margin on top and ask whether you could still cope. How much margin, and what minimum rate sits beneath it, is a policy decision that differs from one lender to the next.

Which parts of your income they believe. This is where the biggest gaps open up. Overtime, bonuses, commission, a second job, rent from an investment property, distributions from a trust, profit retained in a company — every one of these is treated differently. One lender might accept a bonus in full, another only half of it, another none at all without two years of history.

What they assume your life costs. Lenders compare your declared spending against a benchmark and use whichever is higher. The benchmark itself varies. So does the treatment of credit cards, which are frequently assessed on the full limit available to you rather than what you owe.

The more unusual your income, the wider the spread

On a flat salary with nothing else going on, lenders tend to cluster fairly close together. The distance grows quickly once there is anything to interpret — you work for yourself, you draw from a company, a decent share of your pay moves around, or you already hold property.

Which is exactly when chasing the sharpest advertised rate can cost you the most. A good rate is worth nothing from a lender who reads your income conservatively and declines you, or approves far less than the lender next door would have.

Practical things that help

• Find out where your income is read most generously before applying anywhere
• Remember that every formal application is recorded on your credit file, including declined ones
• Deal with credit card limits you never use — they can cost you capacity at a zero balance
• Ask about the buffer and the expenditure benchmark, not only the rate

None of this is about finding whoever will lend you the most. It is about finding the lender whose rules happen to suit your circumstances — then checking the number still works if things change.

General information only. This article does not take into account your objectives, financial situation or needs, and it is not personal financial, legal or taxation advice. Lending criteria, fees and conditions apply, and all applications are subject to lender assessment and approval.