Applying for a loan next year? Your Christmas spending is already part of the application.
Quick answer: If you apply for a home loan in January, February or March, your December bank statements will very likely be read as part of your application. Lenders typically review around three months of recent statements to check how much you actually spend, and some ask for up to six. A big Christmas month can make your everyday spending look higher than it really is, and that can reduce how much you’re able to borrow.
Most people start thinking about their loan application in January. The lender starts reading it from December.
Whenever we prepare a home loan application early in the year, the same thing comes up. The client’s finances are in good shape, but their statements tell a different story, because the most recent month includes Christmas. Nothing about their income or their habits has changed, yet on paper it looks like they spend far more than they do.
You can’t undo it after the statements are printed. You can plan for it now.
Why does a lender care what I spent in December?
Lenders have to be satisfied you can afford the loan without hardship. That’s a legal requirement under Australia’s responsible lending rules, not a preference.
Part of that check is comparing three things:
the living expenses you declare on your application
what your bank statements actually show
a benchmark called the Household Expenditure Measure (HEM)
In most cases, the higher figure is the one that feeds into the assessment. The assessor reads the transactions in your statements, not just the balance.
Which months will my application actually show?
Count back about three months from when you expect to apply.
January: October, November and December
February: November, December and January
March: December, January and February
Statements usually need to be recent, generally within the last 30 to 60 days. Some lenders ask for six months, along with your credit card and Buy Now Pay Later statements. For most applications lodged before April, December sits inside the window.
What does Christmas spending look like to an assessor?
An assessor doesn’t see “Christmas”. They see lines on a page:
larger supermarket and bottle shop bills
restaurants, bars and takeaway, several times a week
gifts, flights and accommodation
a credit card balance higher than usual
a new Buy Now Pay Later plan
transfers to family or friends with no explanation
Each one is a question. If nobody answers it, the assessor can read your most expensive month of the year as your normal month. That can lower how much you’re able to borrow.
Does a new Buy Now Pay Later plan or credit card count against me?
Often, yes. New repayment plans show up as commitments.
Credit cards catch people out the most. Many lenders assess a credit card on its limit, not on what you owe. A card opened for holiday shopping, or a limit increase accepted at the checkout, can reduce your borrowing even if you pay it off in full.
What can I do before I apply?
Know your window. Work out which months your application will show before they happen.
Keep a note of one-off costs as they happen. Flights to see family or a once-a-year gift are easy to explain with the details in front of you, and harder three months later.
Think twice before a new card or payment plan. A small convenience in December can have a long tail in February.
Declare your expenses honestly. A figure that doesn’t match your statements raises more questions, not fewer.
Look at your statements before a lender does. You’ll see what they’ll see, while there’s still time to prepare.
Will one expensive month stop me getting a loan?
Not on its own. An explained one-off reads very differently from a pattern.
The risk is the month that nobody explains. When there’s no context, the assessor has to fill the gap themselves, and they’ll fill it cautiously.
The application starts before you fill in a form. For anyone planning to buy or refinance early next year, it started this month.
General information only. Not financial advice.
Frequently asked questions
How many months of bank statements do lenders check for a home loan? Usually around three months, and some lenders ask for up to six. The statements generally need to be recent, typically within the last 30 to 60 days.
Do lenders look at credit card and Buy Now Pay Later statements? Yes. Lenders can ask for statements for all your accounts, including credit cards and Buy Now Pay Later, to check your spending and your commitments.
Is it better to wait until after Christmas to apply? It depends on your situation and your timing. What matters more is knowing which months your application will show and being ready to explain anything unusual in them.
Can I explain a one-off expense to a lender? Generally, yes. One-off costs can be explained as part of the application, ideally with details such as booking confirmations. It’s easier to explain something upfront than after the lender has queried it.
Does a higher credit card limit reduce how much I can borrow? It can. Many lenders assess a credit card on its limit rather than its balance, so a higher limit can reduce borrowing even if the card is paid off each month.
About the author - Paul Frazis, Director, George Capital Finance Solutions Commercial Broker of the Year, Australian Broking Awards 2026. Paul is a former banker who now works with clients Australia-wide on commercial finance. (02) 9072 9288George Capital Finance Solutions operates under Connective Credit Services (ACL 389328).
