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How you can get a home loan as a low income earner

Rates and fees last updated on

Buy a home even if you have a low income.Low income home loans

Most people believe that if they have a low income, they’re not eligible for a home loan. This can include those who are unemployed, who are receiving retirement pensions or who are living on government benefits. Similarly, many borrowers with bad credit rating assume that they can no longer be approved for a home loan.

For lenders, income is a driving factor when it comes to approving home loan applications. Typically, what you earn should be able to cover your loan repayments and take into account other expenses that come with being a homeowner, such as repairs, taxes and insurance. The higher your income, the higher amount you can generally borrow.

This doesn't mean a lower income will price you out of the market entirely. While there are no specific low income home loans, you can increase your chances of approval following the tips listed below.

Basic home loan comparison

Rates last updated July 26th, 2017.

ME Basic Home Loan - LVR <=80% (Owner Occupier, P&I)

Interest rate decreased by 0.10%

January 4th, 2017

HSBC Home Value Loan - Resident Owner Occupier only

Application fee waived for Resident Owner Occupier only.

February 15th, 2017

Beyond Bank Low Rate Special Home Loan - LVR <70%

New special offer rate of 3.83%

March 7th, 2017

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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Essentials - Variable (Owner Occupier, P&I)
A basic home loan with a competitive rate and low fees.
3.64% 3.66% $0 $0 p.a. 80% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.85% 3.86% $0 $0 p.a. 90% Go to site More info
UBank UHomeLoan Variable Rate - Standard Variable Rate Value Offer (Owner Occupier P&I)
Combine a low variable interest rate and free redraw with no application or ongoing fees.
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive variable rate with a redraw facility. NSW, QLD and ACT residents only.
3.99% 3.99% $0 $0 p.a. 85% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.17% 4.21% $600 $0 p.a. 95% Go to site More info
Heritage Bank Discount Variable Home Loan - Special Rate Offer (Owner Occupier) New Customers Only
Pay no application fee and get access to this discounted rate for a limited time.
3.99% 4.04% $600 $0 p.a. 90% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
Get a competitive rate without features you may not use.
3.97% 4.02% $445 $0 p.a. 90% Go to site More info
4.87% 4.91% $0 $395 p.a. 95% Go to site More info
Beyond Bank Low Rate Special Home Loan - LVR <70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
3.83% 3.83% $0 $0 p.a. 70% Go to site More info
3.69% 3.72% $0 $0 p.a. 80% Go to site More info
ME Basic Home Loan - LVR <=80% (Owner Occupier, P&I)
A low variable rate loan with no application or ongoing fees.
4.09% 4.11% $0 $0 p.a. 80% Go to site More info
St.George Basic Home Loan - Promotional Rate (Owner Occupier, P&I)
A no frills loan with a competitive rate and a maximum LVR of 95%.
3.80% 3.81% $0 $0 p.a. 95% Enquire now More info
3.78% 3.79% $600 $0 p.a. 90% Enquire now More info
Teachers Mutual Bank Classic Home Loan - Owner Occupier
A basic home loan without all the bells and whistles you may not use with your home loan.
4.14% 4.19% $600 $0 p.a. 85% Enquire now More info

How much do I need to earn to qualify for a home loan?

Home loan providers have their own criteria for lending, and these are usually kept a secret. Don't let that deter you from applying for a loan. Start by using a borrowing power calculator, like the one below, to get a rough idea of how much you could borrow with your income.

When you apply for a loan, lenders evaluate the amount you can borrow by looking into your capacity to repay. The amount of money you have in your bank account is a factor, as it shows that you can save money despite your expenses (daily expenses, utility bills, other loan repayments, etc.).

Other costs that may come into play are legal or processing fees, pre-purchase inspection fees, maintenance and repair fees, and insurance. Don't forget to factor in possible rate increases over the time it will take to repay your loan.

The kind of loan you are applying for, and the terms in which it’s to be kept, are also factors. Low income loans for shorter periods may help get you approved for a higher amount. The best way to get the amount you need is to be prepared, and ensure that the loan you are aiming for will suit you.

About comparison of home loans

What income sources qualify for a home loan?How much income do I need for a home loan

Income is the biggest factor when it comes to home loans, but many lenders consider different kinds of financial sources when evaluating loan applications. Aside from having a job, receiving rental income, or regular government payments, lenders also look into allowances such as Centrelink payments, child support payments, pensions (disability, retirement, overseas, veterans, etc.), and other money sources that augment your living. Provide proof of these sources to submit with your application form.

In some instances, lenders will approve applications for people who are not earning actively, but have a certain amount of money in the bank. This is usually when you’re applying for a loan from the same bank with which you have your savings and other accounts, but other lenders may accept this as well.

The terms and conditions of each lender vary so it’s best to compare each and pick the one that will work best for you.

What income documents will home loan lenders typically expect?

Applying for a home loan is simple. All you need to do is provide the documents the bank or lender requires, fill out an application and submit it. The lender will then evaluate your documents, and after a set number of working days (this varies for each lender), you’ll be informed if your loan has been approved or not.

Traditional loan applications require several documents. Proof of your identity (passport, birth certificate, citizen’s certificate, driver’s licence, and in some cases, credit cards) and proof of your income (recent payslips, letters of employment, tax assessments). Lenders also require your Australian Tax File Number, and proof of residence (utility bills, recent bank statement, rate notice, valid driver’s license with photo).

If you are self-employed, you need to provide both personal tax returns and business tax returns for the past two years, and your balance sheet and profit and loss accounts for the same period. Contractors would need to provide their most recent employee contract that includes their income details. If you are earning any other income, such as from rent or through government benefits, you will need to present proof of that too.

Most lenders require a regular income and a show of assets. Others require GST registration, or if self-employed, you must be working in the same industry for at least 12 months. Business Activity Statements (BAS) are also required.

Tips when applying for a home loan with a low income


You can increase the chances of being approved for a home loan, even on a low income. Here are a few options to think about:

  • Joint application - Consider applying for a loan with your partner or a co-signer. This combines two different income sources, raising your capability to repay the loan. It also takes into consideration the financial history of both borrowers, so be sure you both have good credit histories. It’s important to note that before you apply for a home loan, you should come to a legal agreement first as to how the property is to be divided in case anything happens.
  • Borrow less - The lower the amount you apply for, the bigger the chance of it being approved. This is because it's less of a risk to the lender, and the lower loan size means lower repayments that are more likely to fit within your budget.
  • Lessen existing liabilities - Lenders look not just at your income, but also at your other financial activities. The few liabilities or less outgoing cash flow you have, the more of your income you can comfortably devote to home loan repayments.
  • Larger deposit - Low income earners can get a better chance of approval if the amount of money they have deposited in a bank account is high. A larger deposit indicates less money is needed, which means a lower income can suffice. It also shows the lender that you have financial discipline and you can pay back your loan on time.

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at Talk to him to find out more about home loans.

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26 Responses

  1. Default Gravatar
    MahmoudApril 7, 2016


    I came across your website and would like to know more information.

    We would like to purchase a home (either build or buy something already built) however our issue is a low deposit. I have already received the first home owners grant in 2002 before we were married.

    If my husband applies for the first home owners grant, the worry is his low income. Can I be named on the loan to increase the income and therefore increase the chances of getting a better loan?

    I am currently working full-time and my husband is working on a casual basis.

    If you could offer us any help we would much appreciate it.

    • Staff
      BelindaApril 8, 2016Staff

      Hi there,

      Thanks for getting in touch.

      While the eligibility requirements for the First Home Owner Grant (FHOG) are determined by the state in which the property is located, generally you are not eligible if one applicant has already received the grant and/or has owned residential property in Australia. You can read our FHOG guide to learn more.

      We also have an article about home loans for casual workers which you might find useful. If you are applying for a home loan together, the lender will take into account your combined income, assets, credit history and debts. In short, if you have a higher income and better job security, this will help. However, some lenders may still be skeptical about lending to you given your husband’s non-traditional income source.

      You may want to speak to a mortgage broker to find a suitable home loan product.

      All the best,

  2. Default Gravatar
    janineApril 1, 2016

    we are moving interstate, and have a large deposit of 300.000 , we need an extra 80.000 and my hubby will leave work as settlement has reached of our house sale and like to buy a house interstate for 380.000 will the banks lend us the money if my husband is out of work and our income will only be centrelink and newstart allowance.

    • Staff
      BelindaApril 4, 2016Staff

      Hi Janine,

      Thanks for reaching out.

      Generally, it will be harder for you to qualify for a home loan if your husband is currently out of work and if you’re currently receiving Centrelink benefits. When applying for a home loan, most lenders prefer that all applicants have been in their current job for at least 12 months, or the same industry for 2 years, as this demonstrates that you have a stable source of income.

      You might be interested to read our page about home loans for Centrelink recipients where you can enquire with a mortgage broker to discuss your options. In the table provided, you’ll see which government benefits are accepted by most lenders, but please keep in mind that most benefits are only accepted as a secondary income source.

      We also have an article that explains how you can refinance and/or apply for a home loan once you’ve started a new job.

      Ultimately, your ability to qualify for a home loan will depend on a range of factors; your joint income, assets, credit history and any existing debts that you have (e.g. credit cards or personal loans). Also, most lenders will treat these types of applications on a case-by-case basis.

      All the best,

  3. Default Gravatar
    peterOctober 15, 2015

    after i sell my home i will have around $680,000 as a deposit, i would like to borrow around $120,000 to buy another home. my wife and i are both unemployed and together we earn about $27000 from centrelink per year, can we still borrow money from a lender, we could easily pay back 1000 a month.

    • Staff
      MarcOctober 15, 2015Staff

      Hi Peter,
      thanks for the question.

      While some lenders will use some or all of your Centrelink income when deciding whether or not to approve your home loan, as we’re not a lender we’re not able to say for sure if you’ll be eligible for a home loan. You might want to contact a mortgage broker to see if there are any lenders who would likely approve your application, or alternatively speak to a lender directly to find out what your chances would be.

      Sorry I couldn’t be of more help,

  4. Default Gravatar
    AprilOctober 9, 2015

    Hi my name is April
    My husband Jamie n I have a mortgage of 84000.00 and wish to refinance our home to do renovations we were wanting to know how much we can borrow!
    Thank you

    • Staff
      MarcOctober 12, 2015Staff

      Hi April,
      thanks for the question.

      You can get an estimate of your borrowing power using our calculator. For a more accurate estimation of how much you can borrow, please speak to a lender you’re interested in to see what they would be comfortable lending you.

      I hope this helps,

  5. Default Gravatar
    megApril 20, 2015

    I am 65, have $25,000 deposit and looking at buying within $120-130,000 range in rural area, can I get a loan at my age and for what period would I be needing to take it

    • Staff
      JodieMay 8, 2015Staff

      Hi Meg,

      Thank you for your question.
      Because each lender is different, the maximum age restrictions may differ depending on the lender. Lenders will also take into account your other financial factors such as your income, assets and debts when deciding whether to grant you a loan.
      I would suggest contacting a mortgage broker or financial advisor to discuss your specific circumstances and they will be able to assist you in securing a loan.


    • Default Gravatar
      deepakJune 9, 2015

      I am retaired persons my monthly pension only $ 16000.00 but I need home loan how it will be get.

    • Staff
      BelindaJune 9, 2015Staff

      Hi Deepak,

      Thanks for your enquiry.

      On this page, you can read more about home loans for pensioners and contact a mortgage broker to discuss your options.

      Lenders have different eligibility criteria regarding loans for pensioners, but ultimately they will assess whether or not you can service your loan using your pension benefit.


  6. Default Gravatar
    iriniMarch 26, 2015

    my husband is a joint tenant with his fathers house does that help with home loan application

    • Staff
      ShirleyMarch 26, 2015Staff

      Hi Irini,

      Thanks for your question.

      If your husband has a stable income, a good credit history and a large amount of assets then this generally helps with the home loan application.


  7. Default Gravatar
    BelindaMarch 25, 2015

    I am in receipt of a centre link payment and wish to get a loan of $16000 for a granny flat. Is there much of a chance as it will be my only out going monies.
    Thank You

  8. Default Gravatar
    MankMarch 16, 2015

    I got deposit $100K and I need to borrow 400K , My individual earning last year earning was $40K , Is there any possibility for me to borrow for first home construction ?

    Thanks for the reply

    What about if I add my wife income , so altogether it comes 60K before tax and my company made profit 17K tax ?
    Does that help ?
    Note : that’s all before tax

    • Staff
      ShirleyMarch 17, 2015Staff

      Hi Mank,

      Thanks for your question.

      Please use our borrowing power calculator to see where you stand.

      After using the calculator and you find that none of the loans listed above are suitable for your situation, there is always the option of speaking to a home loan broker. They’ll be able to help you further should need further help in narrowing down a suitable home loan option.


  9. Default Gravatar
    nolaFebruary 26, 2015

    I want to buy a property $140.000. I am on a disability pension. I am an emergency teacher. I do not have a deposit

    Can you please help me?

    • Staff
      ShirleyFebruary 26, 2015Staff

      Hi Nola,

      Thanks for your question.

      Unfortunately it’s not possible to get a home loan without a deposit, unless you have a guarantor who is willing to offer their property as security.

      If you find that none of these loans are suitable for your situation, there is always the option of speaking to a home loan broker. They’ll be able to help you further should need further help in narrowing down a suitable home loan option.


  10. Default Gravatar
    AntoNovember 3, 2014

    We are 2 pensioners (mother and son) and been looking for a home loan for a while now. The main hindrance is my mothers are (78), I’m 46. We’ve tried a mortgage broker with no luck. We only get a long based on my income alone. So we can only borrow $110K – not enough. We need double this. Any advice?

    • Staff
      ShirleyNovember 4, 2014Staff

      Hi Anto,

      Thanks for your question. There are a few options you may want to consider:

      1) Saving up for a larger deposit, though this may take some time

      2) Speak to a different mortgage broker who specialises in pensioner home loan; we compare mortgage brokers on this page

      3) Do some research and see if there’s any Government assistance possible. Getting in touch with Centrelink in this case could help.


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