Loan on Maternity Leave? Here's How to Secure Funds

Balancing the joys of a newborn with financial responsibilities can be challenging, particularly if you're considering a loan while on maternity leave. You might wonder if it's even possible to secure a loan during this time. The good news is, with the right information and preparation, you can navigate this path with confidence.

Understanding Loans and Maternity Leave

Getting a loan while on maternity leave is not just about understanding the financial products available, but also about knowing how lenders perceive maternity leave in Australia. Lenders typically assess your capacity to repay a loan based on your income, and maternity leave can temporarily affect this.

While on maternity leave, your income might be reduced to statutory maternity pay or parental leave pay, which can impact the amount you can borrow. However, if you plan to return to work at the same salary, many lenders can consider your pre-leave income in their assessments.

Current Market Rates and Requirements

In 2026, the Australian loan market remains competitive, with interest rates ranging from approximately 6.49% to 12%, depending on the type of loan and your financial profile. Here's what you typically need to consider when applying for a loan:

• Proof of Income: This includes your current maternity leave payments and a letter from your employer confirming your return to work date and salary.
• Credit Score: A good credit score can significantly boost your chances of securing a loan at a favourable rate.
• Loan-to-Value Ratio (LVR): Most lenders require an LVR of 80% or less, though some may allow up to 95% with lenders mortgage insurance (LMI).

Here is a comparison of typical loan features from our panel of 83+ lenders:

Steps to Secure a Loan on Maternity Leave

Securing a loan while on maternity leave involves several steps to ensure you're in the best position possible:

1. Assess Your Financial Situation: Calculate your current income, expenses, and any potential changes upon returning to work.
2. Gather Necessary Documentation: This includes payslips, a letter from your employer, and bank statements.
3. Consult with a Mortgage Broker: An experienced broker, like those at Esteb and Co, can guide you through the process and connect you with lenders who understand maternity leave scenarios.
4. Choose the Right Loan Product: Consider fixed vs variable rates, offset accounts, and repayment flexibility.
5. Submit Your Application: Ensure all documents are complete and accurate to avoid delays.

Tips and Considerations

Here are some expert tips to consider when applying for a loan on maternity leave:

• Plan Ahead: Start the application process early to give yourself ample time to gather documents and seek advice.
• Consider Joint Applications: If you have a partner, applying jointly can strengthen your application by combining incomes.
• Be Honest with Your Broker: Provide full disclosure of your financial situation to allow them to find the most suitable options.
• Budget for Changes: Anticipate potential changes in your budget, such as childcare costs when you return to work.

Frequently Asked Questions

• Can maternity leave affect my credit score? No, maternity leave itself does not impact your credit score, but your financial behaviour during this time can.
• What type of loans can I apply for on maternity leave? You can apply for various loans, including home loans, personal loans, and car loans, provided you meet the lender’s criteria.
• Will all lenders consider my pre-leave income? Not all lenders will, but many may consider your full-time income if you provide evidence of your return-to-work plan.
• Is it easier to get a loan if I have a strong credit history? Yes, a strong credit history can improve your chances of securing a loan at competitive rates.
• Can Esteb and Co help with my loan application? Absolutely, our team at Esteb and Co is well-equipped to assist you in finding the right loan from our extensive panel of 83+ lenders.