Home loans for Centrelink recipients

If you're receiving Centrelink payments that doesn't mean a home loan is off limits. You may be able to get a mortgage, but the process is a little tougher.

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If you currently receive Centrelink benefits, that doesn’t necessarily mean you have to give up your dream of owning a home.

There are some lenders who accept some Centrelink payments as part of your income. You'll need to do some research or contact a mortgage broker to find out which lenders can help you.

Speak to a mortgage broker about your circumstances

How do mortgages for people on Centrelink work?

If you're receiving a Centrelink benefit, your home loan will be processed the same as any other: you save a deposit and then borrow money from the lender, which you pay back with interest. If you're looking for a lender that accepts Centrelink payments as a form of income, then you have fewer options, as not all lenders accept Centrelink payments as income. Those that do, have a stricter application process.

That's why getting in touch with a mortgage broker is a good idea. Brokers specialise in finding loans for borrowers in unique circumstances.

Example: Jane applies for a home loan while on Centrelink

Jane is a divorced mother of two children. She has a job and receives the Child Support payment. She has saved a deposit and is looking for lenders who will accept her Centrelink benefits as a source of income.

Jane calculated how much she could borrow based on her income alone and found that she would be able to look at homes that cost around $390,000. Once she added the additional $200 she received weekly through her Centrelink benefit that number jumped to $410,000. Since her children were still young, she was able to find a bank that met her in the middle and allowed her to borrow $400,000 to purchase a new home.

If you receive a pension, check out our home loans for pensioners guide

Is my Centrelink benefit accepted by lenders?

Not all Centrelink benefits will be considered by a lender as an acceptable form of extra income. The information below is a general guide only. Please remember that each lender might treat the below benefits in different ways:

Age pensionYesAge pension will only be considered as a secondary form of income. You must have another source of earnings in addition to the benefit.
Carer's AllowanceYesThis type of benefit will require that you have an additional source of income. Earnings from a job would be your primary source, while the allowance is considered supplemental.
Child SupportYesYou will need to provide documentation including the Family Law Court Order, bank statements showing a steady deposit history, a letter from your solicitor and a letter obtained from the Child Support Agency (CSA).
Disability PensionYesIf you receive a disability pension you will need to show proof of a second source of income.
Family Tax BenefitsYesThis applies if you are receiving Family Tax Benefits part A and B. Lenders will look at the age of your children before deciding if this is an acceptable form of income.
Foster Care AllowancesYesAllowances for foster care are accepted so long as you are receiving another source of income.
Overseas PensionYesOnly in the event that your pension is coming from one of the following countries: Austria, Belgium, Canada, Chile, Croatia, Cyprus, Denmark, Finland, Germany, Greece, Ireland, Italy, Japan, Korea Republic, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Slovenia, Spain, Switzerland or the United States of America.
Veterans and Widows PensionYesWhile there are typically no conditions to be met, your application will be better received if you have another form of income as well.

If the benefit you receive from Centrelink is not listed on the chart above, then it may not be considered by lenders as a genuine form of income. In this case it might be best to speak to a lender directly about your options and eligibility.

How to find a mortgage while receiving Centrelink payments

Make a strong application

  • Get your documents together. Make sure you collect all the necessary documents for your mortgage application, including bank statements, payslips and identity documents.
  • Avoid over-applying. Be sure that you do your research before you begin applying for a home loan if you are including Centrelink benefits as income. Too many rejected applications will further damage your credit history.
  • Ensure you can make your loan repayments. While the idea of owning a home may be enticing, you should first make sure you're able to take on that type of financial commitment.

Find the right lender

To ensure that you are getting the right home loan for your circumstance make sure that you are comparing the criteria and what is being offered by different lending institutions.

  • Eligibility criteria. Certain lenders will only accept applications if you are only receiving Family Tax Benefits. Look at the restrictions very carefully before applying for a home loan if you are receiving Centrelink benefits.
  • Lender. Make sure you choose a lender that you think will be understanding of your situation.
  • Employment. In most cases, Centrelink benefits will only be considered as a secondary form of income. Check to see if you have to be employed as well. If you're filling out a joint application, check if your partner needs to hold a steady job.

Watch out for...

  • Higher interest rates. Due to your unique circumstances, lenders may only offer you a home loan at a higher rate. Compare rates to make sure you are getting the best deal.
  • Extra fees. A lender may impose extra fees for the paperwork involved in considering Centrelink benefits as a second form of income.
  • Higher LVR. Your lender may restrict how much you can borrow (known as a loan-to-value ratio) to 80% of a property's value or lower.

More guides on Finder

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132 Responses

    Default Gravatar
    NessDecember 20, 2018

    I receive a Disability Pension and earn between $11 and $13k per annum. I have one dependent remaining (only until July 2019!!) Can you tell me the best lenders to consider please? I have been declined from Bendigo Adelaide and another mortgage broker. Thank you.

      Avatarfinder Customer Care
      JohnDecember 20, 2018Staff

      Hi Ness,

      Thank you for reaching out to Finder.

      You may refer to our list of mortgage brokers. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Enquire now” button and you will be redirected to the provider’s website where you can proceed with your query. Hope this helps!

      Cheers,
      Reggie

    Default Gravatar
    DianeNovember 10, 2018

    Have no debts excellent credit rating yet cannot refinance home because bank will only accept 30% of US pension as income together with OZ Pension?

      Avatarfinder Customer Care
      JeniNovember 10, 2018Staff

      Hi Diane,

      Thank you for getting in touch with Finder.

      Every lender sets their own eligibility and income requirements on loans. Most lenders will review your application on a case-by-case basis. Your eligibility for a refinance home loan will depend on the amount of income you receive and how much of this can be used to service a loan. If you are having a hard time finding a lender to refinance your home loan, it is best to seek help from a mortgage broker.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

    Default Gravatar
    PhuongOctober 15, 2018

    I am Centrelink recipient, can I borrow money bank to buy a house?

      Avatarfinder Customer Care
      JhezOctober 16, 2018Staff

      Hello Phuong,

      Thank you for your comment.

      You will, of course, will be considered for a home loan even if you’re on a Centrelink benefit as long as you meet the eligibility criteria and you have proof of earnings. Most lenders that consider people on a pension will look at your capacity to repay a loan.

      Please read and review our guide above, see the tips and hopefully it will help you on your quest in finding the lender for your home loan.

      Should you wish to have real-time answers to your questions, try our chat box on the lower right corner of our page.

      Regards,
      Jhezelyn

    Default Gravatar
    AdrianSeptember 17, 2018

    Hi,

    I’m a single dad on disability pension and family tax A and B plus carers payment. I’m looking to see if I could get a home loan, sick of paying dead rent.

    Thanks!

      Avatarfinder Customer Care
      JeniSeptember 18, 2018Staff

      Hi Adrian,

      Thank you for getting in touch with Finder.

      According to the table above, disability pension, family tax benefits, and carer’s allowance are some of the Centrelink benefits accepted by lenders. You need to seek help from a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

    Default Gravatar
    QadsihAugust 18, 2018

    I need 250000 dollars to buy a house. I have 40000 deposit and I’m a single mum receiving Centrelink benefits. I just started a casual job, can I borrow? Please give me the information. Thank you.

      Avatarfinder Customer Care
      JhezAugust 24, 2018Staff

      Hello Qadsih,

      Thank you for your comment.

      There are some lenders and institutions that consider Centrelink benefits as income, so you may be eligible for a home loan. It generally depends on how much you earn, what kind of financial situation you’re in, and what kind of payments you receive. To find out if you are eligible, read our comprehensive guides to getting a loan on Centrelink benefits above. This will serve as your guide to getting home loans. You’re best to check with the lender your eligibility first before submitting an application.

      Furthermore, you can also check our guide on pensioner loans to see some tips on how to go about it.

      You’re also advised to seek advise from a mortgage broker and discuss options based on your needs.

      Should you wish to have real-time answers to your questions, try our chatbox on the lower right corner of our page.

      Regards,
      Jhezelyn

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