Being a single parent doesn't necessarily make it harder to get a home loan, it all depends on your financial situation.
If you receive Centrelink payments, many banks and lenders accept these as forms of income.
The federal government also offers The Family Home Guarantee for single parents to buy a home with as little as a 2% deposit.
What are the obstacles for single parents getting a home loan?
When lenders assess home loan applications they'll look at the applicants' financial situation. As a single parent applicant, you'd need to prove you can repay your loan on a single income, on top of the costs of having dependents. With only one income it can also be harder to save for the deposit needed, even though you'd be able to meet the loan repayments comfortably.
Single parents may also be receiving Centrelink payments, such as the Parenting Payment. While some Centrelink payments are viewed by lenders as secondary sources of income, child support payments are generally considered primary income.
Finder survey: Do Australians use a mortgage broker to help choose a low-deposit loan?
Response
Yes
70%
No
30%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023
Can I use Centrelink payments as income?
As a single parent, you may be eligible to receive the Parenting Payment from Centrelink. Most lenders will accept these as part of your income. In addition to this, you may be eligible for the Child Care Subsidy, which is also an acceptable form of income.
The federal government also offers the Family Tax Benefit, depending on your income. Once again, most lenders will accept this as a form of income, depending on the age of your children.
If you're receiving child support payments from a former partner, these are also taken into account when assessing your income.
For a full list of the Centrelink benefits lenders accept as income, read our guide.
What is The Family Home Guarantee?
The Family Home Guarantee is a federal government scheme which allows single parents with incomes below $125,000 to qualify for home loans with 2% deposits.
You need to borrow the remaining 98%, but you can avoid the extra cost of lenders mortgage insurance. This can save you thousands and help you buy a home sooner. It does mean borrowing quite a large amount of money, with minimal equity. So it might not be a good option, depending on your circumstances.
There is a limit of 5,000 places a year for the scheme in FY2024-25.
How can I apply for the Family Home Guarantee?
Not every lender is participating in the Family Home Guarantee. See our full guide for the lenders that are participating and more in-depth information. You will need to contact a participating lender to discuss their eligibility criteria. You can then apply directly through that lender or through a mortgage broker.
Our expert says: Compare home loans to keep costs low
"When you've established your eligibility for a home loan and saved your deposit, it's important you find the right loan for your needs.
Finding a loan with a low interest rate and no or low fees will really help you keep those mortgage costs down. You might also pick a loan with more flexibility and features to help you save money - and hopefully pay the loan down early!"
Trying to put together a deposit for a home while raising a child on a single income can be difficult, especially as the costs of both are increasing. Take note of the following if you're looking for ways to save for a home and you're the provider for a dependent child.
Government assistance. Single income parents may be eligible for the federal government’s Family Tax Benefit A & B, Parenting Payment and the Child Care Benefit. Government assistance can help cover the incidental day-to-day expenses and larger expenses like rent and child care, which can give you a little more room in the budget to save.
Estimate your borrowing power. It's hard to save if you don't have a goal in mind. By using Finder's calculators you can work out your borrowing power and calculate possible repayments. This will give you some direction in the amount you can borrow, and therefore the amount of deposit you'll need.
Budgeting. A budget is essential to any financial plan. List all the money you get, your income, and look at ways to cut down on your spending.
Separate your savings. Lumping all of your savings into one account can mean it's hard to see what your progress is. Split your savings into different accounts so you have a specific one for your home loan deposit.
Mortgage brokers specialise in helping borrowers in difficult or unique circumstances, including borrowers with Centrelink payments. They can help you find lenders who accept government assistance as a source of income, and will help you work out how much you'll realistically be able to borrow to avoid being rejected for a loan. Mortgage brokers get a commission from the lender, meaning you don't have to pay for their help.
Frequently asked questions about home loans for single parents
As with anyone searching for a home loan, there is no best one for a single parent. One home loan that's the best for one single parent, won't be what's best for another.
To compare and find the best home loan for you, you should look at:
Your income, including whether you receive Centrelink payments
Whether or not your income is consistent
How much of a deposit you have saved
What features you want with your loan (e.g. offset account, redraw)
The type of property you want to buy
It may also help to speak to a mortgage broker about your circumstances so they can help you find the best loan.
Yes, you can get a home loan if you receive child support Centrelink payments. Lenders will look at these payments alongside other income, but mostly they will be accepted as primary income.
It's not always that simple though, as lenders will look at several factors to decide if you can manage the loan repayments. You may need to provide evidence that you'll be able to pay the loan over the full loan term, beyond the child support payments.
Yes, if you've owned property before then you may be eligible for the Family Home Guarantee. You cannot intend to own a separate property from the one you are purchasing as part of the guarantee.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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Does a single parent qualify for a first home buyers grant?
jonathan.chan@findercrew.comJune 1, 2017
Hi Lisa!
Thanks for the comment.
Being a single parent doesn’t disqualify you from applying for First Home Owners Grant. Take note that the eligibility may vary from state to state and some basic requirements are needed to be met.
i am a single parent of a 2 1/2 yr old. I really want to buy my own first home of up to $100,000. its looking really good but i heard that you lose all of your rental assistance and family tax a altogether. i ring centrelink who dont pick up the phone – i leave messages and they dont answer so i just really want to know? does anyone know? thanks
AnndyMay 7, 2017
Hi Jess,
Thanks for your question.
In regards to Rent assistance, you will not be eligible to receive this benefit if you own or are buying the home you live in, except relocatable homes. Other eligibility criteria apply.
For Family Tax Benefit, I’ve checked the Department of Human Services website and can’t seem to find a stipulation about the connection of this benefit to purchasing a home. You may have to directly call the Department of Human Services on 136 150 to enquire.
Cheers,
Anndy
JessMay 7, 2017
thank you so much for that! ive just heard as well that after my child turns 8 i go onto newstart. im really concerned about meeting mortgage payments along with living expenses which i worked out to be about $490 pf.based on thats including mortgage payments of 192-223 pf.id like to know how much of newstart payments you receive when you child turns 8.if you know that it would be fantastic! thanks
AnndyMay 8, 2017
Hi Jess,
Thanks for getting back.
Yes, one of the benefits that the Department of Human Services offers to single parents is the Newstart Allowance for single parents whose youngest child is 8 years old or over, subject to eligibility criteria. You can generally earn up to $104 every 2 weeks before the agency start reducing your Newstart payment. You may have to contact Centrelink on 132 850 to learn more about Newstart Allowance.
Cheers,
Anndy
bitconfusedMarch 11, 2016
After reading bits & pieces on the net I’m a bit confused.Something that i thought could be simple is turning out to be more complicated
than I thought
My question if anyone knows
My parents own their property but are not financial, I was wondering if I can pay for an extension onto their house for myself to live- would I be able to get a home loan through their equity to do so, as a personal loan would be to costly and not much better than paying outside rent?
We are based in Victoria, I think that effects the granny flat options and I was wondering what effect this would have if any on their pension
BelindaMarch 14, 2016
Hi there,
Thanks for reaching out.
Your ability to borrow using your parent’s equity depends on whether or not your parents will co guarantor you on the loan and/or whether it will be a joint application.
It’s advised that you speak to a licensed mortgage broker as they will help you understand your borrowing options and they can review your financial situation to find a home loan that’s right for you. A broker can also assist you with the paperwork and negotiate for better terms on your behalf.
Getting a home loan deposit from family as a gift? Cash gifts can help you get on the property ladder, but you need some genuine savings, too.
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Does a single parent qualify for a first home buyers grant?
Hi Lisa!
Thanks for the comment.
Being a single parent doesn’t disqualify you from applying for First Home Owners Grant. Take note that the eligibility may vary from state to state and some basic requirements are needed to be met.
You can check those details on our state-by-state guide to the First Home Owners Grant.
Hope this helps.
Cheers,
Jonathan
i am a single parent of a 2 1/2 yr old. I really want to buy my own first home of up to $100,000. its looking really good but i heard that you lose all of your rental assistance and family tax a altogether. i ring centrelink who dont pick up the phone – i leave messages and they dont answer so i just really want to know? does anyone know? thanks
Hi Jess,
Thanks for your question.
In regards to Rent assistance, you will not be eligible to receive this benefit if you own or are buying the home you live in, except relocatable homes. Other eligibility criteria apply.
For Family Tax Benefit, I’ve checked the Department of Human Services website and can’t seem to find a stipulation about the connection of this benefit to purchasing a home. You may have to directly call the Department of Human Services on 136 150 to enquire.
Cheers,
Anndy
thank you so much for that! ive just heard as well that after my child turns 8 i go onto newstart. im really concerned about meeting mortgage payments along with living expenses which i worked out to be about $490 pf.based on thats including mortgage payments of 192-223 pf.id like to know how much of newstart payments you receive when you child turns 8.if you know that it would be fantastic! thanks
Hi Jess,
Thanks for getting back.
Yes, one of the benefits that the Department of Human Services offers to single parents is the Newstart Allowance for single parents whose youngest child is 8 years old or over, subject to eligibility criteria. You can generally earn up to $104 every 2 weeks before the agency start reducing your Newstart payment. You may have to contact Centrelink on 132 850 to learn more about Newstart Allowance.
Cheers,
Anndy
After reading bits & pieces on the net I’m a bit confused.Something that i thought could be simple is turning out to be more complicated
than I thought
My question if anyone knows
My parents own their property but are not financial, I was wondering if I can pay for an extension onto their house for myself to live- would I be able to get a home loan through their equity to do so, as a personal loan would be to costly and not much better than paying outside rent?
We are based in Victoria, I think that effects the granny flat options and I was wondering what effect this would have if any on their pension
Hi there,
Thanks for reaching out.
Your ability to borrow using your parent’s equity depends on whether or not your parents will co guarantor you on the loan and/or whether it will be a joint application.
It’s advised that you speak to a licensed mortgage broker as they will help you understand your borrowing options and they can review your financial situation to find a home loan that’s right for you. A broker can also assist you with the paperwork and negotiate for better terms on your behalf.
All the best,
Belinda