Can we get a home loan while on maternity leave?

Any general questions you might have in regards to loans and finance.
Taika
Posts: 3
Joined: Wed Aug 14, 2019 6:42 pm

Can we get a home loan while on maternity leave?

Postby Taika » Wed Aug 14, 2019 6:44 pm

Hi, we just had our first child! We’re both full time employee but my wife will be on maternity leave for the next 4 months to recover. We intended to buy a home and had saved up a deposit $50,000 before having our child but we had to hold off on that. Now that we’ve settled a bit, my question can we get a home loan while on maternity leave? Which banks? What do I need to provide?

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Otto Dargan
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Re: Can we get a home loan while on maternity leave?

Postby Otto Dargan » Wed Aug 14, 2019 7:09 pm

Hello Taika. Welcome to the forums and congratulations on the baby!

Maternity leave home loans are offered by a few lenders and only a few among them accept borrowers on unpaid leave. The one thing lenders want to work out is whether or not you can afford the home loan without any significant hardship as part of their responsible lending guidelines.

To verify you can afford the home loan repayments, lenders require:
  • Payslips from the last 3 months prior to starting your parental leave.
  • A maternity leave letter which explicitly notes your return to work income and date.
  • Evidence of savings via bank statements, equity or your partner’s income to prove that you can afford the loan while on unpaid leave.

To find out how much surplus funds you require, you can use our ‘maternity leave living expenses calculator’.

The key is to apply with the right lender.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan while on maternity leave.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Taika
Posts: 3
Joined: Wed Aug 14, 2019 6:42 pm

Re: Can we get a home loan while on maternity leave?

Postby Taika » Wed Aug 14, 2019 7:47 pm

I figured as much. Does a gift from parents count as funds to prove you can afford the loan while on leave? What about government benefits?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can we get a home loan while on maternity leave?

Postby Otto Dargan » Wed Aug 14, 2019 10:11 pm

Hi Taika,

Yes, both government benefits such as Centrelink income and gifts from parents can be used to evidence that you can afford the loan while on parental leave. Lenders will require evidence of the gift amount being in your account and statements for the centre link income.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Taika
Posts: 3
Joined: Wed Aug 14, 2019 6:42 pm

Re: Can we get a home loan while on maternity leave?

Postby Taika » Wed Aug 14, 2019 10:37 pm

Thank you. My current annual take-home pay is $49k approx. and my wife’s income will be $52k once she returns to work. We have a couple of credit cards with a credit limit of $12,000 and minimal balance - I think around $900 or so. We also have a car payment at $350 monthly. Based on our situation, how much do you reckon we can borrow? How long does it typically take for a pre-approval?

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Otto Dargan
Mortgage Specialist
Posts: 7654
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Can we get a home loan while on maternity leave?

Postby Otto Dargan » Wed Aug 14, 2019 10:49 pm

Hi Taika,

Your tentatively calculated maximum borrowing power is between $540,000-$560,000. You can also use our borrowing power calculator.

We’ll need to do a full assessment for an accurate figure. A simple way to quickly improve your borrowing power is to cancel a few credit cards as lenders will use the full credit limit in their assessment instead of using the credit balance.

You can learn more about improving your borrowing power here.

Only recently, lenders were allowed to decide their own assessment rates which you can learn more about here. Basically, eligible borrowers can now borrow up to roughly 15% more than they could before.

Pre-approvals are typically valid for 3 to 6 months. They are not always reliable, so it’s best to get a mortgage broker to do a full assessment.

Give us a call on 1300 889 743 or fill in our free assessment form to find out which lenders will allow you to borrow the amount you need.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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