Home Loan on Maternity Leave? Here's How to Secure Approval

Welcoming a new member to your family is a joyous occasion, but it can also bring financial uncertainties, especially if you're considering purchasing a home while on maternity leave. You might wonder if it's possible to secure a home loan during this period of reduced income. Fortunately, with the right approach and understanding, you can still achieve your homeownership dreams. Let's dive into the details.

Understanding Home Loans During Maternity Leave

When you're on maternity leave, your regular income is typically replaced by a maternity leave payment, which can be lower than your usual salary. This shift in income can pose challenges when applying for a home loan, as lenders assess your ability to repay the loan based on your current financial situation. However, being on maternity leave doesn't automatically disqualify you from securing a home loan. Lenders are increasingly recognising the importance of accommodating borrowers in this stage of life, and there are ways to navigate the process successfully.

Current Market Information and Options

The Australian real estate market in 2026 is dynamic, with home loan interest rates ranging from 6.49% to 12%, depending on various factors such as the type of loan, the lender, and the borrower's credit profile. Lenders assess your financial stability by examining your income, credit score, debts, and overall financial health. While on maternity leave, it's crucial to demonstrate your ability to manage loan repayments, possibly by showcasing alternative income sources or savings.

Lender	Interest Rate Range	Special Considerations
Bank A	6.49% - 8.5%	Requires a return-to-work plan
Bank B	7% - 9.25%	Accepts shared parental leave income
Bank C	8% - 10%	Flexible deposit options

Steps to Secure a Home Loan on Maternity Leave

Securing a home loan while on maternity leave involves careful planning and preparation. Here's a step-by-step guide to help you navigate the process:

1. Assess Your Financial Situation: Review your current income, savings, and expenses to understand your financial standing. This will help you determine how much you can afford to borrow.
2. Prepare Documentation: Gather necessary documents such as payslips, bank statements, and a letter from your employer outlining your return-to-work plan and future income.
3. Consult with a Mortgage Broker: Reach out to a mortgage broker, like Esteb and Co, who can offer insights from a panel of 83+ lenders. They can help identify lenders who are more accommodating to your situation.
4. Submit Your Application: With the help of your broker, submit your home loan application to a lender that matches your needs and financial profile.
5. Negotiate Terms: Be prepared to negotiate terms such as the interest rate and repayment schedule to better suit your financial circumstances.

Expert Tips and Considerations

When applying for a home loan on maternity leave, there are several factors to consider to strengthen your application:

• Demonstrate Financial Responsibility: Show a history of saving and managing funds responsibly. Lenders appreciate borrowers with a strong financial track record.
• Highlight Other Income Sources: If you have alternative income streams, such as investments or rental income, make sure to include them in your application.
• Consider a Joint Application: Applying with a partner who has a stable income can improve your chances of approval.
• Explore Government Assistance: Investigate any government grants or programs that may provide financial support for new parents.

Frequently Asked Questions

1. Can I get a home loan if my maternity leave pay is significantly lower than my salary?
Yes, but you may need to provide additional documentation or a detailed return-to-work plan to reassure lenders of your future income stability.

2. Will my credit score affect my ability to get a home loan on maternity leave?
Yes, a good credit score can enhance your application, while a poor score may require additional efforts to demonstrate financial reliability.

3. How can a mortgage broker help me?
A mortgage broker can guide you to the most suitable lenders from their extensive panel, ensuring you have access to favourable loan terms.

4. What if I don't have a definitive return-to-work date?
Some lenders may still consider your application if you provide a reasonable estimate or demonstrate financial stability through other means.

5. Can I use my partner's income to support my application?
Yes, a joint application with a partner who has a stable income can strengthen your case and improve approval chances.

6. Are there lenders that specialise in loans for people on maternity leave?
Yes, some lenders are more flexible and understanding of maternity leave situations, and a mortgage broker can help identify these options.