Last Updated: 22nd November, 2023

Lenders often don’t consider overtime income when they assess a home loan.

However, if you can show that your overtime income is regular and substantial, they may consider 80% of that overtime income when assessing your loan.

Can banks accept 100% of my overtime income?

Yes! There are lenders who will use 100% of your income if your field of work is classified as an Essential Service.

For everyone else:

  • You can borrow up to 95% of the property value or up to 100% using a guarantor.
  • 3 months in your job: Some of our lenders will use 80% of your overtime income.
  • 2 years in your job: Some of our lenders will use 100% of your overtime income if it is consistent.
  • Essential service workers: Some lenders will use 100% of your O/T if you’ve been in your job for 3 months or more (see below for more details).
  • Overtime is a condition of my employment: This can help us use a higher amount of overtime with more lenders.

100% overtime for essential service professionals

  • Healthcare including doctors, nurses and medical professionals.
  • Frontline and key workers in healthcare, outpatient, residential care, social assistance and disability support services.
  • Police Officers, Fire Fighters and Rescue Employees.
  • Paramedic and Ambulance Officers.
  • Australian Border Force Employees.
  • Australian Defense Force Employees.
  • Corrective Services employees within correctional centres, detention centres and prison services.
  • Primary and Secondary teachers along with Pre-school educators for kindergarten and child-care services.

Please enquire online or contact us on 1300 889 743 to talk to a mortgage broker about your overtime income.

How can I qualify for a home loan with overtime income?

Our best lenders can accept your home loan application if you can meet the following requirements:

  • Minimum length of employment: 3 month history of receiving overtime income.
  • Maximum amount of overtime accepted: 100% up to a maximum of 70 hours per week in total hours worked.
  • Consistency: We have lenders that accept either a group certificate, YTD income figure or 3 months payslips as evidence of your overtime. This way we can present your loan to a lender that can work with the evidence you can provide.
  • Industry: All industries are accepted including mining, fork-lift drivers, trades, construction, nurses, IT, finance industry employees and hospitality.
  • Borrowing power: You can borrow up to 90% of the property value and possibly 95% if you’re a very strong applicant.

Which lenders can help?

Typically banks tend to be better in understanding overtime income when compared to other lending institutions. However, each bank will still have a different set of guidelines and requirements when they assess your loan.

We have access to several lenders willing to take your overtime income into consideration when assessing your home loan for approval.

If you have received overtime income for a minimum of three months and want to make your overtime income count in a borrowing power assessment, please fill in our free online assessment form or contact us on 1300 889 743.

What if I’ve changed jobs?

If you’ve switched to a new employer recently, many lenders will not accept your overtime income because there isn’t enough history with your new employer.

We have access to some lenders who can consider looking at the overtime received from your previous employer in the same industry, and other lenders who can consider looking at a short period of overtime with your new employer.

This means we can often find a lender that can use your entire income and allow you to borrow more.

Applying with the right lender is key to being able to use your full overtime pay in your borrowing power assessment. We’ll find you a suitable lender from among our panel of 50+ lenders.

What do I need to provide?

Most lenders require:

  • A letter from the employer confirming that you have received overtime income for the past one or two years.
  • Two recent payslips.
  • Your most recent group certificate.

The banks will then accept the lowest income proven by those three documents.

If you would like an employment letter template, please contact us on 1300 889 743 or enquire online, and our mortgage brokers will provide you with one.

What if I can only provide payslips?

Whilst it’s recommended that you aim to supply as many documents as you can, each lender has different guidelines.

Some of our lenders only need two recent payslips and will then use the Year To Date figure on your payslips to calculate your annual gross income.

Please enquire online or call us on 1300 889 743 to speak with a mortgage broker who specialises in lending to people who have overtime income as part of their regular employment package.

You can also use the YTD Calculator on our website to find out how the banks will assess your income.

How do banks calculate my assessable overtime income?

Many banks simply take 80% of last year’s overtime or bonus income as assessable income. This can be a dealbreaker in most cases. However, some banks can consider:

  • Overtime income or allowance (whichever is lower).
  • Annualised YTD overtime or allowance.
  • 120% of last year’s total income minus your current year base income.
  • Bonus income (whichever is lower).
  • Annualised YTD bonus income.
  • 120% previous year’s bonus income.

For example, Hugh has a PAYG job that involves shift work on Saturday and Sunday. He earns overtime income regularly each month.

Hugh’s 2015 group certificate shows a total income of $95,000 ( $80,000 base + $15,000 overtime). He secured a raise in 2016 and his base income rose to $85,000 and annualised payslips now show an overtime income of $30,000.

In this case, the bank will calculate his overtime income in this way: 2016 annualised overtime income = $30,000 120% x $95,000 – $85,000 = $29,000

Hugh’s assessable income is now $85,000 base + $29,000 overtime income, adding to $114,000. If only 80% of his overtime income was considered, though it would mean less total assessable income.

Please note that the above example is simply one case of how some banks work out overtime income. Different banks may use different methods.

Why are lenders so conservative?

Lending institutions are generally conservative when assessing your overtime income because the payments are generally irregular.

As a result of this, the lenders are trying to avoid the risk of getting your home loan approved and then running into trouble when you are suddenly no longer required to work overtime or work late by your employer.

When this happens, there is a high chance that you can no longer make the required repayments on your mortgage.

What factors do banks take into account?

Generally for overtime income earners, the loan applications will be assessed on a case by case basis.

This is because the stability of overtime hours worked differs across all applicants depends on factors such as:

  • The type of employment they are in,
  • The industry they are in,
  • The number of regular hours they work in a week, and
  • The length of time they have been in their current job for.

There are lenders who can consider your overtime income if you’re no longer on probation and you have evidence of consistency in the overtime hours you work.

To discuss your situation with our mortgage brokers, please enquire online or call us on
1300 889 743 today. Our expert team will help you get approval.

Apply for a home loan with overtime income today!

Overtime income is paid in addition to your normal base wage when you work more hours than required.

In general, the overtime that you work may vary from week to week, but it can be somewhat consistent for those who work in healthcare, law enforcement or a variety of other industries.

If working overtime is a condition of your employment then the income from your extra hours is just as regular and stable as your base wage.

If you think that your overtime income is regular and consistent enough to get a home loan approval, call us on 1300 889 743 or fill in our free online assessment form for more information.