Can You Get A Home Loan While On Maternity Leave?
Yes, obtaining a home loan while on maternity leave is possible, because:
- Some lenders assess applications based on future income rather than just current earnings.
- Flexible lenders consider 100% of your return-to-work salary, job stability, and financial reserves.
- A strong credit profile and savings can offset temporary income reductions.
Do You Have To Disclose Your Pregnancy?
While it’s not legally required, disclosing your pregnancy can help.
- Hiding it may create issues if income verification is needed.
- Disclosing your return-to-work plan builds lender confidence.
If you’re expecting a baby, it’s best to apply while you’re still working. Doing so gives you access to a wider range of lenders and better loan options.
Planning your finances in advance ensures you won’t be stressed about them when the baby arrives.
How Does Maternity Leave Affect Your Loan Application?
Maternity leave affects home loan applications because of:
- The temporary reduction in income.
- There are uncertainties around returning to work after maternity leave ends.
Fortunately, there are ways to mitigate these risks:
- Provide clear documentation of income, savings and employer support.
- Choose a lender that allows projected return-to-work income.
Eligibility For Getting A Home Loan While On Maternity Leave
- Income assessment: Lenders can consider your return-to-work plans and your partner’s income.
- Type of maternity leave: Paid leave is viewed more favourably than unpaid leave, as it includes a steady income.
- Return-to-work details: You need to provide a signed letter from your employer with their ABN, confirming your return date, working conditions (full-time or part-time), and expected salary upon returning to work.
- Savings requirement: If there’s an income shortfall during maternity leave, lenders may require savings to cover the mortgage repayments until you return to work.
How Do Lenders Assess Your Application?
Most lenders evaluate repayments based on your current income, but some take a more flexible approach by considering:
- Your return-to-work salary (confirmed by employer letter).
- Length of your maternity leave and when you expect your full income to resume.
- Savings to cover repayments during your unpaid leave.
- Your additional income sources, such as:
– Government parental leave payments
– Rental income
– Passive income streams
Paid maternity leave vs. unpaid leave:
- Paid leave is treated as standard income.
- Unpaid leave requires proof of financial stability.
A confirmed return-to-work date and employer verification will improve your approval chances.
Can I Refinance While On Maternity Leave?
Yes, but with stricter requirements.
If you have equity in your property, it can affect borrowing power when refinancing.
Tips For Getting Your Home Loan Approved On Maternity Leave
- Highlight your paid maternity leave income
- Provide a return-to-work date to your lender
- Maintain a good credit history
- Consider a joint application
- Reduce and repay existing debts
- Some lenders will partially accept government-paid parental leave as additional income
- Rental income and other passive earnings can strengthen your application.
- Consult a mortgage broker
Our mortgage experts help parents secure the right home loan, even when they’re on maternity or parental leave. Call us on 1300 889 743 or enquire online free, today.