Can I Get a Home Loan If I'm on Maternity Leave?

You've been working full-time for years.

You earn $110,000 a year, you've saved a decent deposit and you and your partner have been talking about buying a home.

Then you have a baby.

Suddenly, your income looks very different.

You're receiving parental leave payments instead of your usual salary, and you start wondering whether the bank will even consider your home loan application.

The good news? Being on maternity leave doesn't automatically mean you can't get a home loan.

But there are a few things lenders will want to understand.

Will a bank approve a home loan while I'm on maternity leave?

Potentially, yes.

Some Australian lenders will consider your usual employment income when assessing a home loan application, even if you're temporarily receiving less money while on parental leave.

However, they generally want to understand when you're returning to work, how much you'll be earning and how you'll manage your expenses until then.

And not every lender assesses maternity leave the same way.

That's why choosing the right lender can make a difference.

What if I'm returning to work part-time?

Let's say you earned $110,000 before having your baby.

You're currently on maternity leave, but you've decided to return to work three days a week instead of five.

Your new salary will be approximately $66,000.

A lender may assess your application using your expected part-time income rather than your previous full-time salary.

That could change how much you're eligible to borrow.

And that's important because there's no point getting a loan approved based on an income you don't intend to return to.

I'd much rather help you understand what you can comfortably afford based on the life you're planning to have.

What documents will the bank ask for?

If you're applying for a mortgage while on maternity or parental leave, lenders may ask for:

A letter from your employer confirming your employment, expected return-to-work date, hours and salary.
Recent payslips or evidence of your income before leave.
Details of any employer-funded or government-funded parental leave payments.
Evidence of savings available to cover your expenses while your income is reduced.
Information about your household expenses, including expected childcare costs.

The exact documents depend on the lender and your circumstances.

For information about government Parental Leave Pay, visit Services Australia.

What if my partner is still working full-time?

Your partner's income may help support your application if you're borrowing together.

For example, imagine your partner earns $125,000 and you're returning to work on a salary of $66,000.

A lender will consider your combined financial position, including income, existing debts, living expenses and dependants.

But here's something I'd want you to think about.

Would the mortgage still feel manageable if one of you wanted to stay home longer?

Because having a baby changes things.

You might plan to return to work after six months, then realise you'd prefer another three months at home.

Or you might decide that four days of work feels better than five.

Those decisions are easier when your mortgage leaves you some flexibility.

Does childcare affect how much I can borrow?

Yes, childcare costs can affect your borrowing capacity.

And this is something I think many couples underestimate before having children.

Let's say you're returning to work four days a week.

Your childcare costs are expected to be $2,000 per month after any applicable Child Care Subsidy.

That's $24,000 a year going towards childcare.

A lender may include those expected costs when assessing your living expenses, which can reduce the amount you're able to borrow.

It doesn't mean you can't buy a property.

It means we need to consider the numbers properly.

I've written more about this in my article, Does Childcare Affect How Much I Can Borrow for a Home Loan?

You can also check your potential Child Care Subsidy eligibility through Services Australia.

Should I apply for a home loan before going on maternity leave?

I get why people ask this.

If you're earning your full salary today, you might think it makes sense to apply before your income drops.

But applying before your leave starts doesn't necessarily mean the lender can ignore your upcoming change in circumstances.

You need to provide accurate information about your employment, income and any known changes that could affect your ability to repay the loan.

And if your circumstances change before settlement, the lender may need to reassess your application.

My preference is to work through your parental leave plans from the beginning.

That way, we're choosing a loan based on what your household finances are going to look like, not just what they look like today.

What if I'm already on unpaid maternity leave?

You may still have options.

Some lenders can consider applications where a borrower is on unpaid parental leave and has a confirmed return-to-work arrangement.

They may also want to see that you have enough accessible savings or other acceptable income to manage the period before you return to work.

Other lenders may take a more conservative approach.

The outcome will depend on your return-to-work arrangements, household finances and the lender's policy.

This is where comparing lenders becomes particularly useful.

My advice if you're planning to buy while on maternity leave

If you were sitting across from me with a six-month-old baby, a healthy deposit and plans to return to work in a few months, I wouldn't automatically tell you to wait until you're back at work.

I'd want to understand your situation first.
What were you earning before maternity leave?
When are you planning to return?
Will you be working full-time or part-time?
What will childcare cost?
And how much money will you have left after buying the property?

Once we understand those numbers, we can work out whether buying now is realistic or whether waiting might put you in a better position.

Because the goal isn't just to get a home loan approved.

It's to make sure the repayments work for your family.

Buying a home while on maternity leave?

I'm Eshanee, founder of April Six Finance and a Sydney-based mortgage broker.

I work with individuals, couples and young families who want to understand their home loan options without feeling overwhelmed by the process.

If you're on parental leave, preparing to return to work or planning to have a baby, we can look at your circumstances and explore which lenders may be suitable.

Chat to Eshanee by clicking here.

Frequently asked questions

Can I get a mortgage while receiving government Paid Parental Leave?

Potentially. Lenders differ in how they assess government parental leave payments and your future employment income. Your return-to-work arrangements and overall financial position will be important.

Will the bank use my salary before maternity leave?

Some lenders may consider your confirmed return-to-work salary, subject to their lending policies and evidence requirements. If you're returning on reduced hours, they may assess your lower expected income.

Do I need to be back at work before applying for a home loan?

Not always. Some lenders accept applications during parental leave, provided their requirements are met.

Does having a baby reduce borrowing capacity?

It can. Lenders generally consider dependants and household living expenses when assessing borrowing capacity. Childcare expenses and changes to income may also affect the assessment.

Can I refinance my mortgage while on maternity leave?

Potentially, yes. Refinancing generally requires a new assessment of your financial circumstances, so parental leave income and return-to-work plans may be relevant.

Any information or advice contained on the April Six Pty Ltd website is general in nature only and has been prepared without considering your individual personal objectives, financial situation or requirements. Before acting or relying on this information, you must consider the appropriateness of this information with regard to your individual circumstances and objectives.

Eshanee Collins is the founder of April Six, a Sydney-based mortgage broker for first home buyers and first-time property investors across Australia.

📱 0488 471 888 | @eshanee_thebroker | aprilsix.com.au

Can I Get a Home Loan If I'm on Maternity Leave?