Home Loans – Control Approval With Gross Income (2026)

Securing a home loan can be a daunting process, particularly when it comes to understanding the myriad factors lenders consider. One of the most pivotal questions for prospective borrowers is: are home loans based on gross income? This is a critical aspect that can significantly influence your borrowing capacity and, ultimately, your ability to secure the home of your dreams.

Understanding Home Loans and Gross Income

In Australia, gross income plays a substantial role in determining your borrowing power. Gross income refers to your total earnings before taxes and other deductions, including salary, bonuses, and any additional income streams. Lenders use this figure as a benchmark to assess how much you can afford to repay on a home loan.

When applying for a home loan, lenders typically evaluate your gross income alongside other factors such as credit history, existing debts, and living expenses. This comprehensive assessment helps them ascertain your reliability as a borrower and the risk involved in lending to you.

Current Home Loan Rates and Requirements in 2026

As of 2026, the Australian home loan market is experiencing a dynamic shift with interest rates ranging between 6.49% to 12%, depending on the type of loan and the borrower's profile. These rates can fluctuate based on economic conditions and the policies of Australia's leading financial institutions.

Eligibility criteria for home loans generally include:

• Proof of stable income and employment
• A good credit score, typically above 650
• Deposit or down payment, usually around 20% of the property's purchase price
• Current financial commitments, including existing loans and credit card debt

With access to over 83 lenders, Esteb and Co can help you navigate these requirements, ensuring you find a loan that aligns with your financial situation and goals.

Lender	Interest Rate	Eligibility Criteria
Bank A	6.49% - 7.5%	Stable income, credit score 700+
Lender B	8% - 9.5%	Income above $80,000, credit score 680+
Financial Org C	10% - 12%	Flexible income requirements, credit score 650+

Steps to Secure a Home Loan Based on Gross Income

1. Assess Your Financial Position: Calculate your gross income and current expenses to understand your financial standing.
2. Check Your Credit Score: Obtain a copy of your credit report and ensure there are no discrepancies that could affect your loan application.
3. Determine Your Borrowing Capacity: Use online calculators or consult with Esteb and Co to estimate how much you can borrow based on your income and expenses.
4. Gather Necessary Documentation: Prepare proof of income, employment history, and any other documents required for the loan application.
5. Consult a Mortgage Broker: Leverage the expertise of a broker like Esteb and Co to explore options from over 83 lenders and find the best loan for your needs.
6. Submit Your Application: Once you've chosen a lender, submit your application with all the required information and wait for approval.

Expert Tips and Considerations

• Maintain a Strong Credit Profile: Timely repayments and a low level of ongoing debt can enhance your credit score, improving your chances of securing a favourable loan.
• Consider Fixed vs. Variable Rates: Fixed rates offer stability with predictable payments, while variable rates may offer lower initial rates but can fluctuate.
• Stay Informed: Regularly check interest rate trends and economic forecasts to time your application strategically.
• Future-Proof Your Loan: Consider potential future income changes or interest rate rises and ensure your loan terms can accommodate these shifts.
• Don't Overextend: Borrow within your means to avoid financial strain and ensure you can comfortably manage repayments.

Frequently Asked Questions

1. How does gross income affect my borrowing capacity?

Your gross income determines the maximum amount you can borrow, as lenders use it to assess your ability to repay the loan comfortably.

2. Can I include rental income in my gross income?

Yes, lenders often consider rental income as part of your gross income, but they may account for only a percentage to mitigate risk.

3. What if my income is inconsistent?

Lenders may assess income over a period to determine stability. Consider providing additional documentation or using a broker to find flexible lenders.

4. How does my credit score impact my home loan application?

A higher credit score can improve your chances of securing a loan at a better interest rate, as it indicates financial responsibility.

5. Is it possible to get a loan with less than a 20% deposit?

Yes, but you may need to pay Lender's Mortgage Insurance (LMI) if your deposit is below 20%. Some lenders offer special products for low-deposit borrowers.

6. Should I use a mortgage broker?

Using a broker like Esteb and Co can provide access to a broad range of lenders and expert advice, simplifying the loan selection process.

7. What factors beside gross income do lenders consider?

Lenders also look at your credit history, employment stability, existing debts, and overall financial behaviour to assess your loan application.