Can you get a home loan as a single parent?

I don't need to tell single parents how challenging – and rewarding – their situation is. Single parents often juggle more responsibilities, less free time, and tighter budgets – and lenders may take some of these factors into account when assessing a mortgage application. 

But being a parent alone shouldn't stop you from qualifying. Denying someone a mortgage because of their family situation is considered discrimination. What lenders will focus on is your financial position: your income, expenses, and the number of dependents you support.

So, what does the process actually look like for single parents applying for a home loan? From government assistance schemes to deposit requirements and borrowing power, here's what single parents should know before applying for a mortgage.

Can single parents qualify for a home loan in Australia?

Securing a home loan as a single mum or dad is much the same as getting one as a single-person household. It takes some organisation, preparation, and documentation.

Like any potential borrower, your preferred lender will assess your income and expenses to ensure you can afford to repay a home loan.

How much can single parents borrow to buy a home?

How much you can borrow (i.e. your borrowing power) will depend on the size of the repayments you can afford to make each week, fortnight, or month. The more of your income you have left over after your expenses, the more you'll likely be able to repay.

A mortgage lender will also consider any debt or credit cards you already hold when assessing your borrowing capacity. Generally, your credit card limit will be considered existing debt, as you can swipe it the moment you leave the bank for the full limit – that's a risk lenders take into account. For that reason, it's often a good idea to pay down any outstanding loans and close unused credit cards prior to applying for a home loan.

If you're unsure how much you're able to borrow to buy a property, our Borrowing Power Calculator can help to provide an estimate.

See also: Getting a home loan with low income

Do lenders accept child support or Centrelink payments as income?

Many lenders will consider income from child support or Centrelink, alongside your wages. Generally, any stable and ongoing source of income can help your application.

That said, policies vary. Some lenders may accept 100% of court-ordered or regularly received child support, while others may only count a portion. Certain Centrelink payments, such as Family Tax Benefit, can be included, but others may not be. Providing clear documentation may strengthen your case.

What expenses do banks look at for single parents applying for a mortgage?

It's no secret that raising children costs money. From feeding and clothing them, to childcare, education, and extracurricular activities, raising kids can be costly.

Home loan lenders will consider these costs alongside a borrower's other expenses when assessing whether they can repay a home loan.

Typically, a lender will ask an applicant to provide an account of their regular expenses, which it may compare to the Household Expenditure Measure (HEM) – meaning any fibs you tell will likely be caught out. Be prepared to answer questions on your spending if your outgoings are significantly higher or lower than your bank or lender expects.

Do single parents need a bigger deposit to buy a house?

Single parents don't necessarily need a larger deposit than any other home loan borrower. In fact, with the help of the Family Home Guarantee, single parents could be eligible to purchase a home with a deposit of just 2% (more on this in a moment).

Most home loan lenders provide mortgages to borrowers with deposits as small as 5%.

However, without support from the likes of a guarantor or the Family Home Guarantee, those with deposits worth less than 20% of their property's purchase price will likely be asked to pay for Lenders Mortgage Insurance (LMI). LMI protects a mortgage lender in the event a borrower defaults on their home loan and the sale of the property doesn't cover its losses. While LMI doesn't protect the borrower, they're the one who pays for it – and it can cost thousands.

Can I refinance my mortgage or upgrade my property as a single parent?

Not all single parents are first-time buyers. If you're refinancing or upgrading to a new property, you'll likely go through the same process as any other borrower – your lender will assess your income and expenses.

The advantage you may have is equity: the portion of your property you already own. Equity can be used as a deposit for your next home, to refinance into a sharper rate, or to fund renovations through a home loan top up. And if you've built up significant equity, selling your current place and putting the funds toward a new property could mean taking on a much smaller mortgage than you'd otherwise need – you might even be able to take out a bridging loan to smooth the shift.

If you're unsure how to take the next step, reaching out to a mortgage broker, financial advisor, or your current lender could help you map out your options.

What government schemes help single parents buy a home?

There are a number of grants, stamp duty discounts, and deposit supports open to single parents, particularly those purchasing their first home. These ones could be worth your attention:

Family Home Guarantee

The main support offered to single parents looking to enter or reenter the property market is the Family Home Guarantee.

It's part of the Home Guarantee Scheme and is open to single parents and guardians who wish to purchase a property with a deposit of 2% or less without paying for LMI.

It ultimately sees the government acting as guarantor on a portion of a person's home loan, providing extra security for a lender.

Those looking to participate need to apply for a home loan through a participating lender.

Help to Buy

While not yet up and running and not specifically designed for single parents, the Help to Buy scheme promises to support 40,000 homebuyers into the market.

The scheme will see the government contributing up to 30% of the purchase price of an existing home or 40% of the purchase price of a new home. It will then hold an equivalent stake in the property, which the homeowner can either buy it out of in the future or hand over in the eventual sale of the property.

State-based grants and stamp duty support

If you're a single parent who hasn't previously owned a home, you might be eligible for a cash grant or often-significant stamp duty discounts.

What you might be eligible for can depend on your state or territory, whether you're buying a new or existing property, your annual income, and other factors.

Check out our guides on first home owner grants and stamp duty discounts for more information.

In the market for a competitive home loan? Check out these low-rate options:

Important Information and Comparison Rate Warning

How can I improve my chances of getting approved for a home loan as a single parent?

By now, you should feel more confident about your chances of securing a home loan as a single parent. While you may face different financial pressures, you're essentially in the same position as any other single homebuyer – and the right preparation can strengthen your application.

Here are some key tips to help you prepare for a home loan application:

1. Be realistic about your borrowing power

Most buyers start by browsing properties, but what you want and what you can afford might be two very different things. Remember: the home you buy now doesn't need to be your forever home. Living with one less bedroom or moving a little further out can provide a stepping stone onto the property ladder and help you start building equity sooner.

It's also smart to leave yourself a buffer. Avoid borrowing right up to your maximum capacity, as this could leave you vulnerable if your circumstances change.

2. Clean up your finances

A financial spring clean can go a long way. Trim unused subscriptions, cut back on takeaway, and rein in impulse spending to get a clearer picture of your true repayment capacity.

It's also a good idea to close any unused credit cards and consider paying down any loans you hold. The smaller your existing debt and combined credit card balances, the more you can likely borrow.

It's also worth checking your credit report, which you can do free every three months. This gives you the chance to spot errors or inconsistencies before they affect your application.

3. Keep saving towards your deposit

The more cash you can put towards your home purchase (not to mention other purchasing costs), the more you can spend on a property. If you don't spend more, having additional savings could help you save interest and avoid or minimise LMI.

Don't stop saving when you've reached a perfect 20% deposit. Extra savings can cover stamp duty, provide a financial buffer for unexpected bills, or allow you to make lump sum repayments once your loan settles. It could also protect you from missing out if property prices rise while you're preparing to buy.

4. Consider reaching out for expert help

Finally, consider reaching out to a mortgage broker. While they may not always have access to the lowest rate home loans on the market, their knowledge, access to a wide range of lenders, and ability to save you time can be worthwhile – especially if your situation is more complex.

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