Despite getting their pre-approvals up to six months before finding the property that they want to buy, property buyers are increasingly being let down by lenders who change their terms and conditions at the last minute, forcing renegotiations or even prompting them to pull out of deals.

While this is common for off-the-plan purchases, there is an increase in renegotiations among short-term agreements because lenders are discreetly changing loan conditions, imposing new borrowing terms, changing rates, or reducing the amount a buyer qualifies for.

“It is forcing a lot of buyers out of the market,” said Jessica Darnbrough, a spokesperson for Mortgage Choice. “They have to look for another place to buy, or find another lender.”

The Australian Prudential Regulation Authority has instructed lenders to keep their loan growth under 10 per cent a year, so lenders nearing this limit are either raising rates and fees or not accepting more loans until demand has cooled.

There are also other cases wherein criteria used to assess a property loan are tightened, hence increasing living expenses and reducing assessable incomes. Other lenders are not even taking into account other types of income, like bonuses, overtime, and commission payments. There is also a ban on discretionary pricing that makes it tougher for some temporary and provisional visa holders to be included in special borrowing and saving packages.

Christopher Foster-Ramsay, director of Foster-Ramsay Finance, recommends that buyers try to make sure that their financial circumstances do not change. He also suggested to keep saving so that they remain attractive to lenders.

“If there is a policy change at lender A that excludes a borrower, there is always B, C, D, and E that might suit,” he said.