Home Loan with One Income? Discover Approval Secrets

In today's dynamic housing market, securing a home loan on a single income might seem daunting. But with the right information, planning, and resources, achieving your dream of homeownership is entirely possible. Whether you're a sole earner by choice or circumstance, navigating the complexities of the Australian mortgage landscape can be done with confidence.

Understanding Single-Income Home Loans

Before diving into the specifics, it's essential to understand what a single-income home loan entails. Essentially, it's a mortgage application where only one person's income is considered for loan approval. This can often lead to concerns about borrowing capacity and meeting lender requirements, but various options are available to make this journey smoother.

Current Market Rates and Requirements

As of 2026, the Australian housing market continues to present both challenges and opportunities for single-income earners. Interest rates for home loans typically range from 6.49% to 8.5%, with fixed and variable rate options. Lenders assess several factors, including your credit score, deposit size, and overall financial health.

Here's a quick look at what's generally required:

• Credit Score: A score of 620 or higher is often preferred by lenders.
• Deposit: Typically, a 20% deposit is ideal, but some lenders accept as low as 5% with lenders mortgage insurance (LMI).
• Stable Income: Demonstrating consistent income is crucial, usually through recent payslips and employment history.
• Debt-to-Income Ratio: Lenders generally favour a ratio below 30%.

Lender	Interest Rate	Deposit Requirement
Lender A	6.49%	5%-20%
Lender B	7.25%	10%-20%
Lender C	8.5%	15%-20%

Steps to Secure a Home Loan on One Income

Securing a home loan on a single income involves a few strategic steps. Here's how you can navigate the process:

1. Assess Your Financial Situation: Review your income, expenses, and savings. This will help you determine how much you can afford to borrow.
2. Improve Your Credit Score: Pay off existing debts and ensure all bills are paid on time to boost your creditworthiness.
3. Save for a Deposit: Aim for at least a 5-20% deposit to give you more options and potentially better rates.
4. Consult a Mortgage Broker: Engaging a mortgage broker like Esteb and Co, with access to 83+ lenders, can help you find the best deal tailored to your situation.
5. Get Pre-Approval: Secure a pre-approval to strengthen your position when making an offer on a property.
6. Choose the Right Loan: Decide between fixed or variable rates and consider offset accounts or redraw facilities if they suit your needs.
7. Submit Your Application: Gather all necessary documentation and submit your application through your broker or directly with the lender.

Expert Tips and Considerations

Here are some expert tips to enhance your chances of getting approved:

• Budget Wisely: Create a realistic budget that factors in all homeownership costs, including maintenance and insurance.
• Consider a Guarantor: If possible, having a family member act as a guarantor can increase your borrowing capacity.
• Explore First Home Buyer Grants: Take advantage of government schemes and grants available for first-time buyers.
• Stay Informed: Keep up with market trends and interest rate forecasts to make educated decisions.
• Be Patient: The process may take time, but patience and persistence often pay off.

Frequently Asked Questions

1. Can I get a home loan with bad credit on a single income?
It's challenging but not impossible. Some lenders specialise in bad credit home loans, though they may come with higher interest rates and larger deposit requirements.

2. Is it easier to get a home loan with a co-borrower?
Yes, having a co-borrower can increase your borrowing capacity and improve your chances of approval, as combined incomes are considered.

3. What is the minimum deposit required for a single-income home loan?
Generally, the minimum deposit is 5%, but a 20% deposit is preferred to avoid lenders mortgage insurance (LMI).

4. How does my employment type affect my application?
Lenders prefer stable, full-time employment, but part-time and casual earners can still be approved if they demonstrate consistent income and job stability.

5. Can I use the First Home Owner Grant (FHOG) on a single income?
Yes, if you're eligible, the FHOG can be used to supplement your deposit, making it easier to get approved.

6. What are the advantages of using a mortgage broker?
A mortgage broker, like Esteb and Co, can provide access to a wide range of lenders and help find competitive rates tailored to your unique situation.

7. How can I improve my chances of approval?
Improve your credit score, save a larger deposit, reduce existing debts, and consider using a guarantor to enhance your application.