Get the Finder app 🥳

Track your credit score

Free

Install
finder.com.au

Getting a home loan on maternity leave

While difficult, it's possible to get a mortgage while you're on maternity leave. Here's what you need to know.

Richard Whitten
Richard Whitten

Updated . What changed?

Fact checked

We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.

From a lender's perspective, applying for a home loan while on maternity leave reduces your borrowing power and makes you a riskier applicant because your income is temporarily reduced.

The good news is that some lenders will approve a home loan or a mortgage increase even though you're not receiving a permanent income. You'll just need to show that you can afford the loan, have a realistic borrowing amount and take the time to find a lender that will accept your application.

Tips for applying for a mortgage during maternity leave

The best suggestion is, if possible, to get a home loan before you need to take maternity leave. Once your lender has accepted your application you're in a safer position as long as you keep making repayments.

But sometimes that simply isn't possible. If you can't avoid applying for a home loan while on maternity leave then here are some tips to help you succeed:

  • Get documentation from your employer. If you're on paid maternity leave you could strengthen your application with a letter from your employer outlining the terms of your maternity leave including your return date, future employment terms (part time or full time, for example) and your salary upon return.
  • Save at least a 20% deposit. It's always harder to borrow more than 80% of a property's value. Having a minimum deposit of 20% will make your application stronger (and you won't have to pay lenders mortgage insurance).
  • Set a realistic budget and loan amount. Work out your income and expenses carefully to make sure you're borrowing an affordable amount. Be sure to consider how living on one income during maternity leave will affect your finances too.
  • Talk to multiple lenders before applying. Don't submit a full application without checking with a lender first. Some may reject your application once they know you're on maternity leave so be upfront about it. Rejected applications look bad on your credit score.
  • Consider talking to a mortgage broker. A mortgage broker has a good sense of which lenders will accept your application and can guide you through the whole process.

What will a lender consider when reviewing my application?

Lenders will typically take into account whether or not you are on paid or unpaid maternity leave as well as your ability to service the mortgage repayments using:

  • Assets such as genuine savings or shares
  • Equity that you have in existing property
  • Government benefits or monetary gifts (if applicable)

Applying for a home loan before taking maternity leave

If you're still working at the time you apply for the home loan then the whole application process will be a lot easier. While your lender has a legal responsibility to ensure you're able to repay the loan they can't knock you back just for being pregnant.

But if you know you'll be out of work soon due to childbirth you have a responsibility to crunch the numbers for yourself and make sure you can repay the loan.

Do the following:

  • Look at how much you're hoping to borrow, how much you earn and your other expenses.
  • Subtract your income from that calculation. Factor in maternity leave payments too.
  • Can you afford repayments in the scenario? Do you have other savings to cover the shortfall?

If the answer is no then you should probably rethink the home loan altogether or borrow a smaller amount. Getting into debt and then immediately missing repayments could be disastrous.

What about taking a repayment holiday if I take maternity leave later?

Some lenders include a repayment holiday feature in certain mortgage products, which allows you to take a break from your repayment responsibilities when you leave the workforce.

Generally, you need to have your home loan for at least 12 months before you can apply for a repayment pause. Enquire with your lender directly to see whether this feature is available.

Compare more brokers in the table below

Data indicated here is updated regularly
Name Product Upfront consultation fee Variable rates from Comparison rates from Lenders on panel Apply Now
Aussie
Aussie
$0
2.99%
3.02%
22
More Info
Aussie is a long-established mortgage brand with over 1,000 brokers across the country.
Finsure
Finsure
$0
3.03%
3.04%
35
More Info
Finsure has a large panel of lenders and offers flexible mortgage solutions for borrowers.
loading

Compare up to 4 providers

Need a home loan? Start comparing

More guides on Finder

Home Loan Offers

Important Information*
Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

More info
Logo for St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).

More info
Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

More info
Logo for UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate

Take advantage of a low-fee mortgage with a special interest rate of just 2.49% p.a. and a 2.49% p.a. comparison rate.

More info

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site