But today's lenders are looking for a lot more than that, putting the complete financial history of an aspiring home-buyer under the microscope to determine whether they are ever going to get their money back.
Credit cards, personal loans, HECS/HELP debts, rental history: all these payments are pored over by lenders before they give a `"yes'' or ``no''.
According to the financial comparison website ratecity.com.au, the number of lenders requiring only a 3 per cent deposit for a home loan has doubled to 5 per cent since January.
Despite this, lenders are still keen to avoid the kind of risky loans that precipitated the global financial crisis and comply with new responsible lending practices.Redfern homeowner Kai Lebens, who was approved for a $450,000 loan for his two-bedroom unit last year, says his stepfather gave him sound financial advice.
"He told me to not, under any circumstances, take up the banks' offers of increasing my credit-card limit,'' he says.
"They will assume that if you have a $30,000 limit you will spend that after you've taken out a loan. They consider the worst-case scenario.''
Lebens never maxes out his credit card. He pays his bills on time and paid off his HECS when he had the chance. Earning $130,000 a year in a steady job worked in his favour as well.
A credit-risk manager at one of the big four banks, who asks to remain anonymous, says an applicant's credit scores -- obtained through credit agency Veda Advantage -- is one of the biggest determinants of whether they will offer a home loan.
"We also discriminate on postcodes as well, with more remote postcodes and certain areas presenting a higher risk for the bank,'' he says.
"We also look at bills that haven't been paid on time and see if there's a pattern.''
With age, he says, even a 70-year-old would probably have a loan approved if they had a good credit history.
Other factors considered are whether applicants have been in steady jobs for longer than six months and their assets and liabilities.
Smartmove professional mortgage adviser Simon Orbell says potential home-loan borrowers need to take action now to ensure there are no skeletons lurking in their financial closets.
"Get a copy of your credit report from Veda Advantage (mycreditfile.com.au) if you suspect there may be some previous misdemeanours on your file,'' he says.
"Knowing about them up front allows you to overcome any issues that may arise in the credit-application process. Take up a My Veda Alert subscription from the website to maintain and take measures to keep your credit file clear.''
Orbell says the subscription also protects against identity theft. "Also, make sure you notify all current or potential creditors -- company, personal or otherwise -- of changes to your address details to ensure that bills don't get lost,'' he says.
"Finally, and most obviously, ensure all bills are paid on time and set up direct debits for bill payments wherever possible to automate this process to keep your credit file as clean and tidy as possible.''
But just because would-be property buyers get knocked back from one lender, that doesn't mean they should not shop around.
There are more than 100 banks, credit unions and mortgage companies competing.
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