Last Updated: 22nd November, 2023

Maternity Leave Living Expenses Calculator

Enter the details of the home loan amount you’re looking to borrow and how much you can reasonably afford to repay per month while on parental leave.

The maternity leave living expenses calculator will then provide you with a good idea of your borrowing power.


Disclaimer: This calculator has several assumptions and simplifications and so should be used as a guide only. Please seek independent financial advice and your own circumstances before making any decisions about your home loan repayments. Making interest only repayments can significantly increase the cost of your mortgage over the term and expose you to higher repayments at the end of the interest only term

Juggling family life and work has never been more difficult in today’s busy world.

The last thing you need to worry about is your home loan and how you’ll manage your family’s budget while on maternity leave.

Can I get a mortgage?

Did you know that some banks and other lenders can still approve a home loan or loan increase for you even though you’re not receiving an income?

  • You can borrow up to 80% of the property value (90% on a case by case basis).
  • If you’re on unpaid leave then you must have funds set aside to make repayments.
  • Discounted professional packages, basic loans and lines of credit are available.

Give us a call on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers will give you a call to discuss your situation.

Which banks will consider maternity leave?

Most banks will decline your loan application outright because there’s a risk that you’ll not return to your previous job, will have another baby or because they can only assess your current income.

Although some banks have strict lending policies, we know lenders that will still allow you to borrow. Under a maternity leave home loan package, banks accept your return-to-work salary for assessing your income. Most banks allow up to 1 year of leave period but we also have a lender in our panel who accepts 2 years of leave period.

What do I need to provide?

Most lenders will request that you supply evidence of your employment and income. You may be required to provide:

  • Payslips (from the last 3 months prior to commencing parental leave).
  • A letter from your employer stating the terms of the parental leave, particularly the return date and the employment tenure upon return (full time, part time or casual).

What factors do banks take into account?

When banks consider lending to mothers who are staying at home with their newborn child, they generally take into consideration the length of time until you return to work. They also consider your ability to cover the loan repayments using:

  • Money that you have on standby;
  • Equity you have in your home; or
  • Government benefits you’re receiving.

However, the duration of the maternity leave is also an important factor. If you’re concerned with your ability to get approval, fill in our free assessment form or speak to one of our mortgage brokers on 1300 889 743 to find out how we can help.

How long can I be on parental leave for?

Generally, the maximum period of leave that lenders can consider is 12 months. However, they view smaller periods such as 6 months or 18 weeks more favourably.

We have a lender on our panel who can consider your application if you’re returning to work within 2 years of parental leave.

If you’re clearly going to struggle to afford the loan while on leave, the bank won’t approve your application. All lenders we deal with practice responsible lending.

To discuss your situation with an expert mortgage broker, contact us on 1300 889 743 or fill in our free assessment form today. We can help you get approved, even if you’re going on maternity leave.

Paid or unpaid maternity leave?

Paid maternity leave is viewed more favourably by the banks. The problem most people face is that often you may only be paid half of your normal salary while on leave, and so most lenders won’t assess your loan based on your normal salary.

Unpaid maternity leave is treated by almost all banks as if you were unemployed! Even if you have a set date to return to work, many will still not approve your loan until you’re actually back at your job.

Luckily, not every lender views unpaid leave that way. To find out which lender will approve your mortgage, contact our expert mortgage brokers on 1300 889 743 or fill in our free assessment form today.

Applying for a home loan while pregnant

It’s better to obtain a home loan while you’re pregnant and still working rather than while on leave.

We can offer you loans from a wider selection of lenders so you’re more likely to get a better deal.

It’s critical that you plan your finances well in advance of the birth so that you don’t get caught out later on if you need more funds than you anticipated.

Avoid unnecessary stress by completing our free assessment form and speaking to one of our specialist mortgage brokers on 1300 889 743.

Do you just need a repayment holiday?

If you have enough equity in your home, you may be able to release some funds to help you make your repayments and cover your family’s expenses while you’re away from your job.

The banks use many names for this type of home loan that has a break in the repayments for up to twelve months. You may hear it being called a Mortgage Safety Net, Repayment Holiday or a Repayment Pause.

This feature is typically only available if:

  • You’ve been making extra repayments on your home loan up until that point and won’t typically require you to provide a reason.
  • You have a set return to work date, otherwise the bank can’t rely on your income for the home loan approval.
  • The extra money you have paid off of your mortgage is sufficient enough to cover the repayments while you are on a repayment holiday.
  • The extra money you have paid off of your mortgage is sufficient enough to cover the repayments while you are on a repayment holiday.
  • You were on time with your loan repayments, hence the need to be in contact with your bank before you get into financial hardship.

How much longer will it take to pay off my home loan?

Assuming you have $400,000 home loan and your interest rate 4.00% p.a., taking a 12-month repayment holiday would add an extra 6-12 months to your home loan.

That amounts to around $8,000 for the six months and $16,000 for a year.

Are you unable to make your mortgage repayments?

If you find yourself in hot water and you are unable to make repayments, some lenders have hardship provisions where they try to work with you to find a solution.

The common causes of hardship are serious illnesses, injury, unemployment or a relationship breakdown where one person refuses to pay the loan.

In most cases, this means working out what you can afford to pay, committing to make repayments of that size and letting the bank know when and how you are going to get back on your feet.

In some cases, this can include a period of no repayments.

The key to hardship provisions is to notify the bank early on and be open to meet them halfway.

If you stop returning their calls or you don’t have a plan to get back on top of things then you risk them taking legal action against you to repossess your property.

Is refinancing your mortgage a solution?

If you cannot afford your current loan then you cannot refinance to another lender even if they’re offering a slightly better interest rate.

However, let’s say that you lose your job and after six months of hardship you have now found a new job, you may be able to refinance to a specialist lender to clear your arrears and pay out any other debts you have.

Within 6 months to 2 years, you may be able to refinance back to a major lender at a a more competitive interest rate.

The reality is that if you’ve been in hardship with a bank, there is a good chance they will not accept you as a borrower ever again.

Being in “financial hardship” can affect your credit rating but having a repayment holiday will not affect your credit file.

It’s best to check with your lender before taking a repayment break.

If ever you are in financial trouble then consider contacting a financial counsellor


Golden tips for parental leave and home loans

Having a baby can often play havoc with your plans.

You may intend to return to work quickly but, in some cases, this isn’t possible and you may need to extend your leave.

Some first time mums discover that they love being a mum and decide not to return to work or to find a part-time alternative.

If you save up as much as you can for a year or two before having a baby then you’ll be in a better financial position.

You’ll then be able to enjoy being a parent rather than be fiancially-stressed and forced to return to work if you’re not in a position to do so.

We’ve found many of our customers have benefited from topping up their home loan before you have a baby.

Effectively, it allows you to take pause your repayments without the need to frantically build a cash buffer yourself.

This is one of the major benefits of building up equity in your property: so you can be prepared for more financially-prepared for major life changes like starting a family which can often cost a small fortune.

Apply for a home loan today!

Here at Home Loan Experts, our mortgage brokers have extensive knowledge of the guidelines used by Australian lenders.

Please fill in our free assessment form or call us on 1300 889 743 to discuss your situation with a mortgage broker who can quickly find you a lender that will accept your loan while you’re on maternity leave or while you’re pregnant.