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How to get a home loan if you’re a casual worker

Low doc home loans are the most common type of home loans for casual workers.

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Sarah Megginson

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It's harder to get a home loan as a casual worker because lenders consider borrowers with casual incomes to be "higher risk". This is not always the case in reality, but all lenders create policies based around their risk perceptions. Some banks and lenders have friendlier policies towards casual works, and for the most part, the most common home loan option for casual workers is a low doc home loan.

Let's explore how these loans work and how to improve your chances of being approved for a home loan as a casual worker.

How do I get a home loan as a casual employee?

If you're a casual worker applying for a home loan, you'll need to show that you've been working steadily by providing the last 2 years' worth of ATO Notice of Assessments.

The lender will often use the year with the lowest income as an indication of what you're earning. This way they can make sure they are meeting their legal responsibility of ensuring you can afford the loan.

If you have not been with the same job for several years, it can be more difficult demonstrating proof of consistent income. Ongoing employment in the same industry can help. For instance, if you've had 2 casual jobs in the last 3 years, but they both involved working in hospitality, that can help provide evidence of consistency in employment to the bank.

The most common type of home loan for casual workers is a low doc home loan, which is a mortgage that is designed for the self-employed or those who receive an irregular income, rather than a consistent PAYG income. These types of loans are considered to be riskier than a regular home loan, so they often charge slightly higher interest rates. In some cases, lenders may implement lower LVR caps, which means they require you to save a larger deposit.

How to compare mortgages for casual workers

Consider the following when applying for your loan:

  • Documentation. You don’t need as much documentation with a low doc loan as you would with a full documentation loan, but the more income evidence you can provide, the better. Any income you receive cash in hand won't be considered as genuine income – you need a paper trail as income evidence.
  • Interest rate. If the bank considers you to be a riskier borrower, they may charge a slightly higher interest rate than PAYG borrowers. This could be a small price to pay in order to buy your own home; make sure you shop around for the best deal.
  • Loan type. You should consider whether the flexibility of a variable rate or the certainty of a fixed rate is better suited to your circumstances. Some loans will allow you to split your loan into variable and fixed rate portions.
  • Features. Check the list of features being offered and try to find the ones that will be most beneficial to you. Things to look for might be a 100% offset account, redraw facilities and flexible repayment options.

Because applying for a home loan as a casual worker is a little more niche, you might find that a mortgage broker will be able to guide you towards the right lenders and great deals.

Pros and cons of a home loan for a casual worker

Pros

  • Availability. Home loans are available for all types of casual workers, including those with fluctuating hours, freelancers, contracts and locum positions. As long as your income is taxed and you can show proof, then a low doc loan could be suitable.
  • Options. You will be able to choose from a number of different lenders who specialise in home loans for casual workers.
  • Opportunity. You can start building up equity and paying down the loan, and in a few years you'll be more likely to be approved by another lender with lower interest rates.

Cons

  • Higher fees and rates. Some lenders may charge you extra fees or higher interest rates for the higher risk they perceive you to have.
  • You may need an accountant. Lenders could request the contact details of an accountant to verify your income. If you don’t have an accountant, you may want to consider one just to sort out your documentation.
  • Loan-to-value ratio caps. Lenders may impose caps on the amount you can borrow against the value of your property. This means you'll need a higher deposit.

How long do you have to be a casual worker to get a home loan?

The more evidence you can give of being in steady casual employment, the better. But typically, you could be approved for a low doc home loan with a minimum of 12 months employment in the same industry. Even with applying for a traditional home loan, you typically need to have been in your current role for at least 6 months.

What if you have recently switched jobs?

That could be ok. You need to prove steady employment in the same industry. So if you've switched to a new job but it's in the same industry, that's probably fine. If you've completely changed industries, you might need to wait another 12 months before you can apply for a loan.

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Head of editorial

As an authority on all things personal finance, Sarah Megginson is passionate about helping you save money and make money. She is an editor and money expert with 20 years’ experience and an extensive background in property and finance journalism. Sarah holds ASIC RG146-compliant Tier 1 Generic Knowledge certification, and she's a regular media commentator, appearing weekly on TV (Sunrise, Channel 7 news, Nine news), radio (KIIS FM, Triple M, 3AW, 2GB, 6PR) and in digital and print media. See full bio

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Sarah has written 186 Finder guides across topics including:
  • Home loans
  • Personal finance
  • Budgeting and money-saving tips
  • Managing the cost of living
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4 Responses

    Default Gravatar
    AlfredJuly 13, 2021

    I have been working for a company for 4 year’s and recently moved to the same position but as a casual. I have been in this role as a casual for 6 weeks and will continue for another 5 Months until I take up a new role with a different company.
    I want to buy a property with My Parent who is retired but wants to do this as joint tenancy so if she passes her half will pass onto me.
    Can this be done?

      AvatarFinder
      SarahJuly 16, 2021Finder

      Hi Alfred,

      It is possible to get a loan as a casual employee. Partnering up with your parent could help you demonstrate to the bank that you have the capacity to pay your mortgage payments.

      Keep in mind that there are a number of factors that come into play when it comes to loan approvals and co-owning a property. Typically, a bank or lender will ask you for the last two years’ worth of tax records to prove that you have been continuously employed.

      If you’re planning to submit a joint application together with a parent, it’s best to check the lender’s eligibility, requirements and relevant terms and conditions. You may also want to consult a mortgage broker. On the top left of this page you’ll notice an option that says ‘Brokers’. Click on this to get a dropdown list of brokers; click on the name of the broker you want to learn more about, and you’ll be redirected to the Finder review page. From there, you can select your area and you’ll be connected to a broker in your area to help you with your home loan.

      As for joint tenancy arrangement, under this arrangement, the ownership of the property is split 50/50. If one joint tenant dies, their share of the property is automatically passed to the surviving joint tenant regardless of what their will says. Given your unique situation, it’s worth considering getting professional advice from a solicitor or conveyancer.

      Cheers,
      Sarah

    Default Gravatar
    EllieMarch 26, 2016

    Hi, I have a causal job and wounding to brow around 70,000 to 80,000 is there any that could help me,Regards Ellie

      Default Gravatar
      BelindaMarch 29, 2016

      Hi Ellie,

      Thanks for getting in touch.

      Typically, it can be difficult to qualify for a home loan as a casual worker as most lenders view you as a high-risk borrower as you do not have a stable source of income. But do not worry, each lender will treat these types of applications on a case-by-case basis so it will depend on the lender’s eligibility criteria and the type of home loan that you’re applying for.

      Keep in mind that the lender will review your income sources, assets, liabilities and debts (e.g. personal loans or credit cards) to determine your propensity to repay the loan.

      To further help you, we have a guide that explains how banks treat bonus or irregular income which you might find useful. Generally, if you can prove to the lender that your income is paid regularly and if you provide them with a letter from your employer outlining the nature of your employment, then the lender may view your application more favourably.

      I suggest that you enquire with a mortgage broker who will help you understand your borrowing options. However, you may want to consider approaching specialist lenders as they may have more lenient eligibility criteria.

      All the best,
      Belinda

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