Getting approved for a home loan on a single income is definitely an option, though your success depends on how much you earn and your current cost of living. You'll need to carefully work out how much you can borrow and repay comfortably and make sure that your spending is under control before you apply.
Follow our tips below and you'll find yourself in a much better position.
Your chances of approval depend in large part on how much money you want to borrow. From a lender's point of view, a realistic borrowing amount takes into things like:
Use a borrowing power calculator to estimate how much a lender will give you.
The bigger the home loan deposit you can save, the easier the home loan approval process becomes. If you had a 60% deposit, lenders wouldn't think twice about lending to a borrower on a single income. Of course, that's not very realistic for the average borrower.
Saving a 20% deposit, however, is more realistic and a good way to strengthen your application as a single income applicant. It's not essential, as low deposit home loans are available for borrowers with deposits as low as 5%. But approval does get a lot harder, especially on a single income.
Check out our complete deposit saving guide
In the months leading up to submitting your home loan application, get your spending under control. Review how much you're spending each month, identify areas where you can cut back (if any), set a budget and stick to it. This will make your lender happy and makes you a more reliable borrower, whether you're on a single income or not.
If you have urgent debts, such as personal loan or credit card debt, you should focus on paying them down before anything else. These debts will weigh against you in any mortgage application.
Read Finder's expert money saving tips
The property you wish to buy is your lender's security in the event you can't repay your loan. It minimises the lender's risk because they can take the property (in a worst case scenario).
This means your lender cares about the property you're buying. Your lender will have the property valued to make sure you're not paying too much for the property. And if the property is in a poor condition or in an undesirable location the lender may reject your application or limit how much they can lend you.
Some lenders also have postcode restrictions for apartments, meaning they are more cautious about lending to people buying apartments in areas with a high saturation of such buildings.
You might be buying a property on one income but you're not alone. There may be help available in the form of government grants and concessions.
Depending on your circumstances you may be able to get help from your family in the form of a guarantee.
Before applying anywhere as a single income home loan applicant, consider speaking to a mortgage broker.
Brokers are experts at helping borrowers find home loans they can qualify for and then guiding them through the application process. If you don't feel confident and want some help with the process a broker is a good starting point.
They might even be able to help you boost your borrowing capacity and get a slightly larger home loan.
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I have split up from my partner and now need to find a home for myself and my son. I only work part time, I may be able to borrow from a family member for a deposit, but is it likely that anyone would give me a home loan on a such a low wage? Thanks
Hi Jane,
Thank you for your inquiry.
There are lenders out there that would be willing to offer you a home loan and there are multiple ways that you can learn about this, as well as the information on this page, we also have low-income home loans and also guarantor home loans, if you are able to get a family member co-guarantor on your loan.
You might also find it helpful to speak to a mortgage broker as they can take all your circumstances into consideration and offer you advice on the options that are best for your specific needs.
I hope this helps.
Regards
Jodie
My husband is bankrupt and I wanted to go for a home loan. am I able to take into account his wages or not?
Hi Cara,
Thanks for your question.
If you apply with your husband as a joint application, his credit history will have an impact on the application.
In this unique situation, it may be best to speak to a mortgage broker or approach a bad credit lender to see if they will consider your husband’s income. They will be able to help you further in narrowing down a suitable home loan option for you.
Cheers,
Shirley