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.
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 pension | Yes | Age 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 Allowance | Yes | This 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 Support | Yes | You 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 Pension | Yes | If you receive a disability pension you will need to show proof of a second source of income. |
| Family Tax Benefits | Yes | This 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 Allowances | Yes | Allowances for foster care are accepted so long as you are receiving another source of income. |
| Overseas Pension | Yes | Only 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 Pension | Yes | While 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.
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Ask an Expert
hi looking to buy land cheap or a home
Hi Brian,
At Finder we cannot help you buy land or a home directly. We can only give you general information.
If you’re receiving a Centrelink benefit, you may have fewer options and the lenders may have a stricter application process. It is worth noting that not all Centrelink benefits will be considered by a lender as an acceptable form of extra income. It is highly suggested that you reach out to a mortgage broker as they specialise in finding loans for borrowers in unique circumstances.
Regards,
Richard
I am buying my home and owe a very small amount on it however l have my special needs grandson that lives with me and we sleep in the lounge room as the home is so small. I get carers payment/allowance and want to buy another home as this one is does not meet in what we need with my grandson growing up and him having the use of his wheel chair is very difficult to get around in it. He doesn’t need it all the time, when he chooses to use it the space for him is very limited if you cannot help me is there someone else you could recommend please.
Hi Julie,
There are some lenders who accept some Centrelink payments as proof of your income to get a home loan. Receiving carer’s payment will require you to have an additional source of income. Earnings from a job would be your primary source, while the allowance is considered supplemental.
Your best bet is to contact a mortgage broker to find out which lenders may be able to help you. Their services are free, and they can do the legwork for you to help you find a lender.
Cheers,
Richard
I receive a disability pension. It is my sole income, I have no dependants (and don’t ever plan to), excellent credit rating and no debts. Can I get a homeloan with Centerlink being my only income source?
Hi Amy,
There are some lenders who accept some Centrelink payments as proof of your income to get a home loan. Typically, if you receive a disability pension, you will need to show proof of a second source of income, as the pension on its own is not enough to service a home loan.
Your best bet is to contact a mortgage broker to find out which lenders may be able to help you. Their services are free, and they can do the legwork for you to help you find a lender.
Good luck!
Cheers,
Sarah
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.
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
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?
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