01 Jan 2023

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The Benefits of Using the Household Expense Measure (HEM) for Australian Mortgage Loans

If you’re considering taking out a mortgage loan in Australia, you may have heard of the Household Expense Measure (HEM). This is a tool that regulated Australian mortgage lenders use to help determine how much you can afford to borrow. While you may not have given it much thought, the HEM can actually be quite beneficial for Australian mortgage borrowers.

Why Use the HEM for Mortgage Loans

One of the benefits of joining a well-known and established mortgage company, such as Mortgage House, is allowing customers to have access to fair calculations of house home expenses. Mortgage lenders generally rely on using the Household Expenditure Measure (HEM) to determine their customer’s borrowing powers during the loan application and approval processes.

How the HEM Works

The HEM is a benchmark that is used to estimate the minimum amount of money that a household needs to cover its essential living expenses. It is based on data from the Australian Bureau of Statistics (ABS) and takes into account the number of people in the household, their ages, and where they live. However, this may provide an inaccurate measure of a customer’s calculated household expenses. Instead of relying solely on the HEM process, Mortgage House and their branches will instead review their applicants’ financial statements to fairly determine their monthly household expenses and calculate their borrowing power.

Contact Mortgage House for More Information

Mortgage lenders who are interested in learning more about partnering with Mortgage House and opening a branch should reach out to our professionals for further information and assistance. We look forward to hearing from you!

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