Can I qualify for a home loan with scholarship income?

Some of Australia’s best and brightest are unable to apply for a home loan because most major lenders will not include income from a scholarship when they assess their ability to repay a loan.

Thousands of would-be home buyers are forced to wait until they finish university before buying their first home.

Thankfully not all banks have lending criteria excluding the use of income from a scholarship.

Usually, your scholarship income alone won’t be enough to qualify for a home loan but combined with your partner’s income, we may be able to get you approved.

How much can I borrow?

The amount you can borrow will depend on your situation:

  • Under 12 months remaining on scholarship: We may be able to help you borrow up to 80% of the property value, and possibly more on a case by case basis. Most lenders will not accept your income in their assessment.
  • >12 months remaining on scholarship: You can borrow up to 90% of the property value (95% for very strong applications).
  • >12 months remaining on scholarship with a guarantor loan: You can borrow up to 105% of the value of the property. This allows you to borrow the stamp duty as well (if not exempt in your state).

Please call us on 1300 889 743 or enquire online to discuss your situation with an expert mortgage broker who can help you get approved!

Which banks will accept my scholarship income?

Although most lenders will not accept income from a scholarship, one of our lenders can use this income in their serviceability assessment as long as the scholarship has at least 12 months remaining.

This is to be verified either from the initial letter from your university confirming that you have been awarded a scholarship, or from a letter from your university at the time of the loan application.

Again, the scholarship income alone may not be enough to service the home loan so your partner will need to be earning an income.

Which types of scholarships are included?

Most of our customers are PhD students on one of three types of scholarships / Fellowships:

  • Commonwealth scholarship: Government scholarships are generally paid as tax free income on an ongoing basis. One of our lenders can accept this income for a home loan.
  • University scholarship: University scholarships can be either paid as taxable income or tax free income on an ongoing basis. One of our lenders can accept this income for a home loan.
  • Fellowship: This income can be accepted on a case by case basis, depending on the nature of the payments and the likelihood that it is to continue.

Which scholarships are not included?

As a general rule only the actual income you received can be accepted by our lenders. Other benefits are not included in the lenders assessment.

The following are not acceptable income / benefits:

  • Merit based scholarships.
  • Direct payment of tuition.
  • Fee exempt scholarships.
  • HECS exemption.
  • Scholarships awarded as a prize.
  • Additional allowances (case by case, accepted if a government benefit).
  • Free accommodation.

If you receive any of these benefits then please be aware that lenders will not include this in their assessment. They will only accept the regular base income that you receive.

Some lenders may ring the provider of your scholarship to confirm the nature of the benefits that you receive.

What types of customers can we help?

Students with partners who work full-time

In most cases the partner has recently completed their university degree, has entered the workforce and may still be repaying their HECs debt.

We most commonly deal with researchers on a NHMRC scholarship or on a university-funded scholarship.

Students buying on their own

The other type of customer that we often assist is a university student who is buying on their own (i.e. not with a partner).

In most cases scholarship income is not enough on its own to support the home loan repayments.

For this reason these students either have a part time job / casual job that they work in or they receive help from their parents.

If you are in any of these situations please call us on 1300 889 743 or enquire online. There may be other ways that you can get a mortgage. Our expert brokers will help work out a solution for you.

How do lenders assess HECs debt?

The government requires you to repay your HECs debt at a particular rate depending on your current taxable income.

As many scholarships are tax free, and often the ones that are taxable are low enough that no HECs is repaid, in most cases the bank will ignore your HECs debt.

It is assumed that when you enter the workforce your income will rise and then you will begin to repay your HECs.

Overall you would be in a better position when this happens so the lender will not take your HECs debt into account.

Will some lenders include HECs debt?

If your partner has a HECs debt which is currently being deducted from their pay, then the lender will include the actual HECs deductions in their assessment.

What if I don’t have a deposit saved?

If you don’t have a deposit then you may want to consider asking your parents if they can help you apply for a guarantor home loan with a Security Guarantee.

If you do not have a deposit and cannot afford the repayments on your own then you will need your parents to guarantee your loan using a Security & Serviceability Guarantee.

Want help applying for a home loan? Speak to us today on 1300 889 743 or enquire online and our specialist mortgage brokers can assist you in the process and make sure you get the best rates around!

Get your home loan approved!

Do you need help with your home loan? Our mortgage brokers know the policies for each bank and know which can accept income from a scholarship.

We can quickly work out which lender would be most suitable for you, depending on the nature and duration of your scholarship and how best to present your application to the bank to ensure it gets approved.

Please call us on 1300 889 743 or enquire online and one of our brokers will ring you back to discuss your situation.

  • Lisa C.

    Hi, what are the main things that banks consider when they calculate the amount we customers can borrow when we buy a house?

  • Hello Lisa C.

    Customers are mainly assessed on two things – First, your income and expenses to see just how much you can actually afford, which is also known as serviceability. Second, your deposit and how it translates into the price of the purchase. You can find out more in the maximum purchase price page:

  • Mike

    Hi there,
    This is Mike. I’ve got full time job with 80K salary and my wife got PhD scholarship $25K per year tax free. We’ve got around $100K deposit. We are renting a unit with $2600 monthly payment.
    Is the any bank who can accept the scholarship? Could you please let me know how much roughly I can borrow.

  • G’day Mike,

    Yes this should be fine. Most lenders will not accept your wife’s income but we have a few that can as an exception. As she is not the main income earner, she could be expected to earn more when she finishes, you have a good deposit and a rental history we should have no problems.

    Our broker will need to know a few details:
    – How long the scholarship is for. i.e. time remaining on the scholarship
    – Who is providing the scholarship
    – Likely career when finishing.

    Please call us on 1300 889 743 if you’d like a full assessment.

    P.s. well done on marrying a very smart woman!

  • Tevin

    Hi there,
    This is Tevin. Both my partner and I are PhD students and we are looking into getting a property. We are both getting 50k pa. and tax free. He is an Australian citizen but I am not. I have also been working for the university as a casual employee for 3 years. Ideally I would like to get the property under my name only, but is it possible?

  • Hi Tevin,
    It would depend on if you are a permanent resident or temporary resident. If you’re a PR then we could buy in your name only and have the loan in both names, using both of your incomes. If you’re a temporary resident then we’d need to buy the properties in both names to get approved, although we can seek an exception and argue the case for you to try to put it just in your name.

    We’d need to know a little more about the stability of your PhD scholarship income and also your casual income. However indicatively this is ok. The size of your deposit would matter as well. If you are borrowing 80% or less of the property value OR if your partner’s parents guaranteed your loan then very likely your loan would be approved.

    As this is more complex please write “refer to Otto” in your online enquiry and I’ll review your situation personally when our broker has all of your details.

  • Johnston

    I’ve never bought real estate before and am planning on buying one by the end of the year. Can you help me understand the home buying process?

  • Hello Johnston,

    We have a whole page on the home buying process where we explain on the various stages of buying a house in Australia. Please check it out as it also contains additional information that you may find quite helpful:

  • anker

    How long does it take to get home loan approval? Any way to speed things off?

  • Hi anker,
    Generally speaking, it takes between 4-6 weeks from submitting your application to reaching settlement on your property, depending on the state in which you live in. However, there are other factors that determine how quickly you get approved including the lender, the complexity of your situation and how prepared you are in returning your mortgage documents on time. Please check out this page to learn about this in detail:

  • Parker

    Hi, I receive merit based scholarship and according to what I’ve read on this page, I should be able to qualify for a scholarship income home loan. I just want to increase my borrowing power a bit more though so I’d like to get a bit of clarification on something – I live with 2 housemates and I pay total $3,500 in rent. But my housemates pay me $2,500 so does this mean only $1,000 will be assessed?

  • Hello Parker,

    Most lenders may not consider this if they use their standard lending criteria when assessing your scholarship income home loan application. However, some lenders may be able to consider it as an exception to policy after proper discussions / negotiations.

  • Townsend

    I am a professor at university on a research scholarship. I earn $30,000 tax free from scholarship and $735 per fortnight from a part time job. My fiance earns $750 a week PAYG. I own a house in QLD to which I would like to make structural renovations and add in a few floors. I need to borrow $320,000. I still am paying off a mortgage on it but not sure how much is left, maybe around 40%. Will our application be acceptable to the banks?

  • Hi Townsend,

    The property may need to be valued to establish just how much you can cash out and use. You will also need to apply with a lender that can accept scholarship income as well as part time employment in order to have the best chance of getting approved. Our mortgage brokers know the policies and lending requirements of many different banks and non-bank lenders all over Austraila. You can discuss this directly with one of us by calling 1300 889 743. You may also simply enquire online and one of us will contact you:

  • Luke


    I am just about to start a PhD on a scholarship of $27k p.a. tax free and I am going to do some casual work for the Uni through which I should earn another $4k. I have approximately $53k in savings to use for a deposit. So I was wondering about the probability is that I might be able to qualify for a loan.

  • Hi Luke,
    If you’re buying on your own then this likely wouldn’t be sufficient income to get it over the line. If you are buying with a partner and they have an income as well then it could work. Typically with scholarship income you need to be borrowing no more than 80% of the property value.

  • Luke

    To reverse that, is that to say that it might be possible to work with a total property value of around $230k which would satisfy the 20% deposit?

  • Hi Luke,
    Yes that is correct. Other criteria may need to be met as well and lenders assess PHD scholarship income on a case by case basis. In most cases it is approved where there it is the supporting income (e.g. spouse has a high paying job) and is not approved where it is the primary income.

  • Luke

    So very tentative then. What are the steps I would need to go through/ what is the best way to find out for sure?

  • Hi Luke,
    If you are buying on your own I’d say almost certainly it won’t work. Do you think your parents would be able to go on the loan with you? If they have a good income this can sometimes work.

  • Luke

    I don’t think so. They both have their own mortgages to worry about.

  • In this case it’s best to either increase your work hours then wait until July so we have a history of a higher income. Or wait until you complete your PHD.

  • Luke

    OK looks like I might just have to wait then. If anything changes I’ll keep you guys in mind to come back to. Thank you for all the help.

  • Mon

    I am a PhD candidate earning $27k per year (tax free). I do casual work which I earn approximately $7k per year. I have $70k savings which I am willing to use them as deposit. In addition, my parents are willing to provide me around $20k per year to repay the loan. The property value that I want to buy is $210k. So I need to borrow $140k. Am I qualify to borrow this amount?

  • Hi Mon,
    Your parents would need to be a part owner of the property for this to be considered. Otherwise their income cannot be used. Also the lenders that can consider scholarship income don’t accept small apartments so a property for $210k may or may not be acceptable.
    Scholarship income can be used for borrowing money when you have a partner who is working full time. When it’s just the scholarship income then it rarely works.
    Potentially your parents can borrow against their property and lend this to you and this would be an easier arrangement.

  • Trishala

    I’m doing my PhD at Macquarie University and the university supports my tuition fees. I was just wondering if banks will consider this as my income if I applied for a home loan?

  • Hi Trishala,
    Lenders now accept 100% of this income for a home loan. You can borrow up to 95% of the property value plus LMI however, and you must be an Australian citizen or Permanent Resident. Also, it’ll depend on how long will you receive it for, whether it’s tax free or not and are there any costs we need to consider when calculating your borrowing power, e.g. additional university fees.

  • Mark

    Hi firstly thanks for all the explanation. I think many people are going to find them very useful. In my case my partner and I are both PhD students with scholarships at 27k pa. We are getting PR next year and an apartment shortly after. By the time we will be looking into home loan we should both have more than 12 months in our scholarship. We are planning to get an apartment ~600K, can you let us know whether we are eligible for loans and how much will it cover?

  • Hi Mark,
    You can get a home loan with some banks but you need to have permanent residency (PR) before lenders accept it; else your borrowing is severely restricted and will have to pay more in stamp duty as a non-resident.

    Call us on 1300 889 743 or fill in our free assessment form and our mortgage brokers will help you get a home loan with your scholarship income.

  • Ravi

    Hi, I’m a PhD student on a scholarship. Is a PhD student who’s a permanent resident eligible to apply for a mortgage?

  • Hi Ravi,
    Yes, you should be able to apply for a mortgage but, you’ll also need to be working as well. We have lenders who specifically target PhD students and can consider those on scholarships on a case by case basis.