Loan on Maternity Leave? Here's How to Get Approved

Juggling the joys and responsibilities of a new family member while considering home ownership can be daunting. If you're on maternity leave, you're likely wondering if securing a home loan is even possible. The good news is that you can get a loan while on maternity leave. However, understanding the nuances and navigating the requirements can be complex. This guide will demystify the process and help you take confident steps towards securing a home loan while enjoying your time with your newborn.

Understanding Getting a Loan on Maternity Leave

Being on maternity leave means you're temporarily away from your regular employment, usually receiving a reduced income or relying on maternity benefits. Lenders need assurance of your ability to repay the loan, which can make the process more challenging but not impossible. The key is to demonstrate your financial stability and future income potential.

Current Market Information, Rates, and Requirements

As of 2026, the Australian home loan market remains competitive, with interest rates ranging from 6.49% to 12%, depending on the lender and your financial profile. For those on maternity leave, lenders typically assess your income based on a combination of your current maternity pay and your pre-leave salary, considering your return-to-work plan.

Eligibility criteria can vary, but generally, lenders will look at:

• Employment history: A stable employment track record prior to maternity leave is crucial.
• Return-to-work plan: Evidence of your intention to return to work, including confirmation from your employer.
• Income: Verification of your maternity pay and any supplementary income sources.
• Credit history: A good credit score demonstrates financial responsibility.

With access to over 83 lenders, Esteb and Co can help you find the most suitable loan options that consider your unique situation as a new parent.

Steps to Secure a Loan on Maternity Leave

Securing a loan while on maternity leave requires careful planning and documentation. Follow these steps to improve your chances:

1. Review Your Finances: Assess your current financial situation, including savings, expenses, and any debts.
2. Document Your Income: Gather payslips, maternity leave payment statements, and any other proof of income.
3. Plan Your Return to Work: Have a clear and documented plan for returning to work, ideally with written confirmation from your employer.
4. Consult a Mortgage Broker: Engage with a mortgage broker like Esteb and Co to explore options from a wide panel of lenders.
5. Prepare Your Application: Complete the loan application with detailed and accurate information about your financial situation.
6. Negotiate Terms: Work with your broker to negotiate favourable terms, including interest rates and repayment plans.

Tips and Considerations

Here are some expert tips to keep in mind:

• Focus on Reducing Debt: Lowering your existing debt can improve your financial profile.
• Maintain a Good Credit Score: Pay bills on time and avoid unnecessary credit inquiries.
• Consider Joint Applications: If possible, apply jointly with a partner to strengthen your application.
• Build a Savings Buffer: Having extra savings can provide additional security for lenders.
• Stay Informed: Keep up with market trends and lender criteria to position yourself favourably.

Frequently Asked Questions

1. Can I get a loan if my partner is the primary income earner?
   Yes, lenders often consider the combined income of both applicants, which can enhance your borrowing capacity.
2. How does maternity leave affect my borrowing power?
   Your borrowing power may be reduced due to lower income, but a strong pre-leave income and a solid return-to-work plan can mitigate this.
3. Will lenders verify my return-to-work plan?
   Many lenders require written confirmation from your employer about your intention to return to work, including the expected date and role.
4. What if my credit score is low?
   Improving your credit score before applying can enhance your chances. Focus on paying off debts and maintaining timely bill payments.
5. Are there specific loans for parents on maternity leave?
   While not specific to maternity leave, some lenders offer flexible loan options with considerations for new parents.
6. Can Esteb and Co help me find the right lender?
   Absolutely, with access to 83+ lenders, Esteb and Co can match you with lenders that cater to your specific needs as a new parent.
7. Is a larger deposit necessary?
   A larger deposit can improve your loan terms and reduce the lender's risk, potentially leading to better interest rates.