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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.

If you currently receive Centrelink benefits, you may be able to borrow money from a bank for a small home loan. There are some lenders who accept some Centrelink payments as part of your income, but it's likely you'll need to purchase with another buyer in order to have enough income to satisfy a loan assessment.

How do mortgages for people on Centrelink work?

If you're receiving a Centrelink benefit, your home loan application 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. However, not all lenders accept Centrelink payments as income and those that do, have a stricter application process.

Getting in touch with a mortgage broker is a good idea. Brokers specialise in finding loans for borrowers in unique circumstances such as this, and their services are 100% free. They get paid in commission from the bank for successfully settling the loan, so you can get access to a service that helps you find the right lender without it costing you any money.

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

Is my Centrelink benefit accepted by lenders?

The following Centrelink benefits may be considered as an acceptable form of extra income. The information below is a general guide only; please remember that each lender treats Centrelink income differently:

Type of benefitAccepted?Notes
Age pensionYes - secondary incomeAge 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 AllowanceYes - secondary incomeThis 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 SupportYes - primary incomeYou 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 PensionYes - secondary incomeIf you receive a disability pension you will need to show proof of a second source of income.
Family Tax BenefitsYes - primary incomeThis 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 AllowancesYes - secondary incomeAllowances for foster care are accepted so long as you are receiving another source of income.
Overseas PensionYes - primary incomeOnly 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 PensionYes - primary incomeWhile there are typically no conditions to be met, but your application is more likely to be approved 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 boost your chances of mortgage approval 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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