Avocado Toast Isn’t the Reason Why Your Loan Got Declined!

It’s become a cultural meme—blaming smashed avo for financial struggles. But when it comes to getting your foot in the property market, your brunch order isn’t what’s holding you back. Lenders aren’t judging your café habits—they’re looking deeper into your financial profile.

The truth is, home loan application success comes down to how your finances stack up overall. Banks and lenders assess far more critical factors like income stability, debt levels, and most importantly, how you manage your living expenses.

Let’s cut through the noise and unpack what really matters when applying for a mortgage—and what you can do to improve your chances of approval.

Why Living Expenses Are More Than Just a Budget Line

When assessing a home loan application, lenders go beyond your income figure—they want to know exactly how you manage the money you earn. That’s where your living expenses come into play. These aren’t just numbers in a spreadsheet; they paint a picture of your financial habits, lifestyle choices, and overall capacity to handle loan repayments.

Here are some key living expenses lenders examine in detail:

Essentials: Rent or mortgage payments, groceries, utilities, fuel, and insurance. These are necessary costs that affect your baseline affordability.
Discretionary Spending: Dining out, takeaway, shopping, gym memberships, and holidays—these can signal lifestyle inflation if not managed.
Subscriptions and Services: Monthly payments for Netflix, Spotify, meal delivery apps, and even Buy Now Pay Later services like Afterpay.
Family & Dependent Costs: Childcare fees, school tuition, medical expenses, or costs for financially dependent family members.

Tracking and adjusting your living expenses not only improves your cash flow but also shows lenders that you’re financially responsible, boosting your approval chances.

Wondering how your daily spending impacts your loan? See why living expenses could make or break your application.

The Real Mortgage Approval Factors Lenders Look At

To understand what really affects a home loan application, it helps to see it from a lender’s perspective. Here are the key mortgage approval factors that can make or break your chances:

1. Income and Employment Stability

Lenders prefer borrowers with consistent income streams. A full-time job with regular hours is favourable, while casual, freelance, or contract work may raise red flags—unless backed by a strong financial history.

2. Debt-to-Income Ratio

Your existing debts (credit cards, personal loans, car loans) are weighed against your income. High levels of debt can severely limit your borrowing power and reduce your chances of approval.

3. Credit History

Your credit score, payment history, and existing credit limits all contribute to your lending risk profile. Missed bills or maxed-out credit cards may signal financial stress.

4. Deposit Size and Savings Habits

Lenders want to see genuine savings over time, not just gifted money or last-minute lump sums. A strong deposit shows financial discipline and reduces their risk.

5. Living Expenses

We can’t stress this enough—high discretionary spending (even if it seems harmless) can derail your application. Cutting back before applying can make a big difference.

How to Strengthen Your Home Loan Application

If you’re planning to apply soon, here’s how to get loan-ready:

Track your spending for at least 3 months
Lenders often request your recent bank statements. Give them something strong to review.
Reduce or eliminate unnecessary expenses
Think before tapping that “subscribe” button—every dollar counts toward your overall risk profile.
Pay down existing debts
Reduce your credit card balances and avoid taking on new personal loans prior to applying.
Avoid major financial moves before approval
Switching jobs, buying a new car, or even applying for another credit card can affect your standing.
Speak with a broker who understands your goals
A professional can help you navigate lender policies and find solutions tailored to your situation.

Start your homeownership journey with confidence by learning the essentials of getting a mortgage.

It’s Not the Avocados

Buying a home is about smart planning, not sacrificing every indulgence. While social media may joke about millennial spending habits, the real challenge lies in managing your living expenses, reducing debts, and presenting a strong, stable financial picture.

At LiveInvest Finance Solution, we go beyond cookie-cutter to help Australians prepare strategically for their home loan application. We’ll work with you to ensure your financial profile aligns with lender expectations, without the guesswork.