You can get a home loan while on maternity leave in Australia. Some lenders can assess your application using the salary you’ll earn when you return to work, as long as you can also cover repayments and living costs during leave.
You may be buying your first home or looking for more room before the baby arrives. Either way, you don’t necessarily have to put the purchase on hold until you’re back at work.
The lender will need to understand what you’ll earn during leave, when you’ll return and how much you’ll earn then. If your income drops for part of that time, you’ll need to show how you’ll cover the gap.
How does maternity leave affect a home loan application?
Maternity leave can change the income a lender uses to calculate your borrowing capacity. A payslip showing half pay, for example, won’t explain that you’re returning to your usual salary in four months. The lender needs evidence of that plan and enough information to assess your finances until then.
There are two periods to account for:
- During leave: What money will come in, when will payments stop, and will you need savings to meet expenses?
- After you return: What will your actual salary be, and how will childcare or changed working hours affect your budget?
A strong application explains both. Savings can help cover a temporary gap, but you still need enough ongoing income to afford the loan.
Can the lender use my return-to-work salary?
Yes, some lenders can use your confirmed salary on return. You’ll usually need an employer letter confirming your return date, employment type, hours and pay. If you’re returning part-time, the letter should state the salary for those hours.
For example, if you previously earned $100,000 full-time and return at 60% of your hours on proportionate pay, your salary would be $60,000 before tax. Using the old full-time figure would overstate your income.
Does paid maternity leave count as income?
Yes, employer-paid parental leave can be considered. The lender needs to know how much you receive and how long it lasts. Ask HR to set out any changes from full pay to half pay or unpaid leave, with dates for each stage.
Government Parental Leave Pay is also accepted by some lenders, subject to their policy. If your employer pays it through payroll, identify it separately from employer-funded leave so the same payment isn’t counted twice.
What if I’m on unpaid maternity leave?
You can still qualify while on unpaid leave. A lender that accepts your confirmed return-to-work salary may also ask for evidence that other income and available savings will cover the period without wages.
Alternatively, you might qualify without using your salary if the household has enough other income that the lender accepts. Your broker can check this before you decide whether to shorten your leave or delay buying.
How we helped a couple buying during maternity leave
A couple approached Home Loan Experts for a $520,000 loan on a $650,000 property, an 80% loan-to-value ratio. One applicant was receiving roughly half her usual pay during maternity leave, and the couple already had mortgages on two other properties.
Our broker obtained an employer letter confirming the return-to-work plan and used evidence of their savings to show how they would cover expenses and repayments. The application received pre-approval.
The employer letter explained the expected income after leave; the evidence of savings addressed the period before that income resumed.
Read the maternity leave home loan case study.
This case reflects the lending policies available at the time. Your application will be assessed on your circumstances and current requirements.
How much can I borrow while on maternity leave?
Your borrowing capacity depends on the income the lender accepts, your debts, household expenses and dependants. There’s no set borrowing limit for someone on maternity leave.
The lender also tests whether you could afford repayments at a higher interest rate. APRA requires banks to use a buffer of at least 3 percentage points above the loan rate, unless it determines otherwise. At a hypothetical loan rate of 6%, that would mean assessing repayments at at least 9%. You would still pay the rate agreed on your loan.
Childcare matters here. Returning to your previous salary doesn’t necessarily restore your previous borrowing capacity if your household now has higher expenses. Include expected out-of-pocket childcare fees, transport and baby-related costs. If you expect a childcare subsidy, check your entitlement and how the lender treats it.
For a useful estimate, give your broker your planned hours, childcare costs, and salary. That gives them a clearer picture than your pre-leave income alone.
Should I apply before maternity leave or wait until I return?
It’s worth checking your options before leave starts. That gives you time to gather documents, compare lenders, and determine whether your purchase budget is realistic. You can then decide when to submit the application.
| When you apply | What to consider |
|---|---|
| Before going on maternity leave | You can prepare while still receiving your usual salary, but the assessment must account for planned leave and changed expenses. |
| During maternity leave | You may qualify based on confirmed return-to-work income, with evidence of how you’ll fund the remaining leave period. |
| After returning to work from maternity leave | Payslips can confirm your actual pay and hours. Childcare costs and any reduction in hours still affect affordability. |
Waiting may help if your return arrangements are uncertain or you need more savings. It may be unnecessary if a suitable lender can already assess your application using confirmed plans.
How soon do I need to return to work?
Lenders set their own requirements for how far away your return date can be. Ask your broker to check that timeframe before relying on your future salary. Your entitlement to take leave does not determine how a lender will assess the loan.
Can I apply without a confirmed return date?
If you need your future salary to qualify, the lender will generally need confirmation of when you’ll return and what you’ll earn. Without it, your broker can check whether you qualify using other income, or what evidence you need before proceeding.
How many payslips do I need after returning?
There’s no rule that every parent must wait three months after returning. The lender may ask for recent payslips, salary credits and employer confirmation, with more evidence if your hours or employer have changed. Get the lender’s checklist before deciding how long to wait.
What documents should I prepare to get approved for a home loan on maternity leave?
Alongside the usual identification, deposit and purchase documents, your broker or lender will need evidence of your leave arrangements and household finances. Gather:
- Recent pre-leave payslips and any current payslips.
- An employer letter confirming leave dates, payments, return date, hours and salary.
- Government payment approvals and payment records, where relevant.
- Bank statements showing your deposit and the savings you’ll retain after settlement.
- Your partner’s income documents and evidence of any other income you want considered.
- Details of debts, credit limits, living expenses and expected childcare costs.
Check the list with your broker before asking HR for a letter. Including the lender’s required details up front can avoid a second request.
Return-to-work letter template
Ask an authorised person at your employer to complete this on company letterhead, then sign and date it. The details should reflect the arrangements you and your employer have agreed.
[Date]
To whom it may concern,
Re: Employment and parental leave confirmation for [Employee’s full name]
[Employee’s name] has worked for [Employer’s legal name and ABN] since [Start date] as [Position]. Their employment basis is [Permanent full-time / permanent part-time / other accurate description].
Before parental leave, they worked [Hours] per week and earned a gross base salary of $Annual amount, excluding superannuation.
Their approved parental leave is from [Start date] to [End date]. Their confirmed return-to-work date is [Date].
Their employer-funded leave payments are:
- [Dates]: $Gross amount per [Week/fortnight/month], representing [Full pay / half pay / other arrangement].
- [Dates]: [Unpaid leave / further payment arrangement].
[Where applicable, show government Parental Leave Pay administered through payroll separately from employer-funded payments.]
On return, their employment will be [Permanent full-time / permanent part-time / other accurate description], working [Hours] per week. Their actual gross base salary for these hours will be $Annual amount, excluding superannuation.
[Include any agreed staged return arrangements and corresponding pay, if applicable.]
Please contact [Name and position] on [Business telephone] or [Business email] to verify these details.
Kind regards,
[Signature]
[Name and position]
[Employer contact details]
You can also use our maternity leave letter template page when preparing your documents.
What if I go on maternity leave after pre-approval?
You can get pre-approval while on maternity leave, subject to assessment. Pre-approval is conditional, so check its expiry date and any outstanding requirements before relying on it to buy.
If you start leave between pre-approval and settlement, tell your broker or lender promptly. They’ll need to check that your income and plans still match the information used for approval. The same applies if you extend leave, delay your return or decide to return on fewer hours.
If you have a purchase deadline, have your finance checked before committing unconditionally or allowing a finance condition to expire. Your conveyancer or solicitor can explain what the contract requires.
Do I need to tell my broker or lender that I’m planning maternity leave?
Yes, you should tell your broker or lender about any planned changes to your income and expenses that may affect your ability to make repayments. That includes a known period of unpaid leave or a planned part-time return, even if you’re still earning your usual salary when you apply. Lenders and brokers must make inquiries into your financial situation and verify it as part of responsible lending.
If your loan has already settled and your plans change, revisit your budget. Contact your lender early if you expect difficulty making repayments.
What if my home loan is declined?
Ask for the reason why your home loan application was declined before making another one. The problem could be the lender’s income policy, missing employer evidence, insufficient savings or the amount you want to borrow.
For example, if the lender won’t use your confirmed return salary, another lender’s policy may help. If the problem is a budget shortfall, changing lenders alone may not resolve it. You may need to reduce the loan, build savings or wait until your income is clearer.
Home Loan Experts can review the reason for the decline and explain what would need to change before you apply again.
What if I’m applying on my own or we’re both taking leave?
For a joint application, include each applicant’s income, debts and leave dates. If both parents are taking leave, check when each person’s pay changes so your budget accounts for any overlap in unpaid leave.
Single parents can also qualify. The assessment will look at whether your own income, any other income the lender accepts and your available savings support the loan during leave and afterwards.
If you’re self-employed, prepare evidence of business earnings and explain what happens while you’re away. The lender needs to understand who will run the business, whether income will continue and what expenses remain. Your broker can confirm which tax records, financial statements, and evidence of recent trading are needed.
Let The Experts Help You
Before you put your purchase on hold, have your income and leave plans checked. Home Loan Experts can compare how lenders would assess your application, work out the documents you need and explain whether the figures support buying now.
Have your leave dates, expected return salary, deposit and savings balance ready. If something needs to change first, we’ll explain what it is.
We’re here to discuss your options.
Please call us on 1300 889 743 or enquire online and one of our commercial mortgage brokers will get back to you with some options.