Simply put, the banks are very interested in where you get your income from. This is so the can assess their credit risk when deciding on :
1) If they will lend to you
2) How much they will lend you
3) The interest rate, their fees and other conditions the lender will charge.
Of course, the banks consider other facts in your application too, such as the type of property you would like to purchase, your general financial position, the amount of your deposit, your credit history etc. However, you income situation is quite important and a summary will be outlined here.
Standard PAYG Employed (Full time Permanent)
Non-standard PAYG Employed
Frequently Asked Questions – Click on question for more information
To the banks a casual employee is someone with a fluctuating income. If your income fluctuates, how can the bank be sure that you’ll make your next mortgage repayment?
Lenders also tend to think that if your employer was to lay off staff, that as a casual employee, you would be the first to go!
Of course that isn’t always the case, this is just how a credit assessor sees it. It’s our job to make them see the truth, not the guidelines, and get your loan approved.
We work with lenders who understand that many Australians are now casually employed, and consequently we are often able to get your loan approved when other brokers and lenders have failed.
• Normal casual employees with fluctuating hours
• Permanent casuals
• Casual teachers
• Casual nurses
• People with multiple casual jobs
You must have been in your job for at least 3 months or have a track record of employment in the same line of work or in the same industry.
You may work only 40 weeks per year.
You may work for several schools, yet have all of your pay come from the Department of Education.
The Year To Date (YTD) figure on your pay slips may not be a true indication of your income due to recent holidays.
During school holidays you may not have an income at all and so providing your payslips will not prove your income.
Some of our banks can assess your true income based on either your group certificate or your weekly income multiplied by 40.
Of course, although a lender may be able to give you approval, you should still only apply for a loan if you truly believe that your employment is stable. Casual employment is subject to more instability so please borrow with care.
Most lenders want to see your last two years group certificates and then they use the lower of the two. Because of this method of assessment, they are unable to lend to casual employees that have not been in their job for several years.
Other lenders use the Year To Date (YTD) gross income shown on your payslip to calculate your annual income. This method is used by lenders that accept casual employees who have only been in their job for a few months.
Lenders use these methods because your income may fluctuate from week to week. If they just use the income that you have received in your last few payslips then their assessment will be inaccurate.
Non conforming and non-bank lenders may also be able to help with your finance application. Some of our lenders can accept people who have been casually employed for as little as 3 months!
• Professional packages
• Basic loans
• Lines of credit
• Fixed rates
• Home / domestic use
• Interest only
• Fixed rate
• Line of credit
• 100% offset
• Extra repayments
Part Time Job
Our best lender for part time employees will accept 100% of your income from your part time job when assessing your ability to repay a home loan. By choosing a lender that can accept your income you will be able to borrow more and can buy the home that suits your budget, not the one your bank tells you that you can afford on 50% of your income!
The lending guidelines of most major banks are skewed towards full time employees and are often quite unfair to anyone that is “outside of the box”.
Unfortunately even then many lenders will require at least a 6 month track record of this new income before approving your application!
One of our lenders can accept your new income as long as you can provide one payslip showing your higher salary and an employment letter confirming your new hours.
The majority of lenders cannot include all of the income from part time employees so the choice of lenders may be limited to one or two depending on how much you would like to borrow.
Temp / Agency Worker Home Loan
One of our lenders only requires a 3 month history, as long as you have a track record of study or employment in the same field.
If you have a stable income that is regular e.g. a set weekly salary, then we may be able to help you get a loan if you have been in your job for just one day!
If you have a fluctuating income then a three month track record is required so that the lender can complete an annualised Year To Date assessment of your income.
The exception to this would be non-bank specialist lenders which also lend to people with bad credit. These lenders are more expensive than the rest.
Luckily a couple of our banks are happy to consider these applications as long as their other home loan criteria are met.
Their guidelines are designed to stop you getting a loan!
If they see payslips with a recruitment agency’s letterhead, that is usually enough to get your home loan declined! However, are the banks right in thinking that all agency and temp workers are the same? No! If you are in a high demand industry you can leave your job and have a new one by that afternoon! Some lenders know this and can take this into consideration when approving your loan.
The employer will pay the recruitment agency, who will then pay the agent/temporary worker, a salary or wage.
There is generally a large number of temporary or temp staffing jobs across many fields including:
There are many employment types where workers are only need for a short period of time. Some include:
• Contract workers
• Casual staff
• Seasonal basis
These types of workers can be found across many industries, however seasonal workers are more common in the agricultural industry.
However, temporary workers are also common in many professional fields such as:
• Project Management
However, there are also disadvantages! If you are switching from temp job to temp job constantly then your bank will have trouble with your home loan application.
Temp / agency workers that have just started in a permanent position are all eligible for home loans.
All loan features available: Interest only, fixed rate, line of credit, 100% offset, redraw, extra repayments.
Overtime Income Home Loan
These essential services are:
• Healthcare (in particular, if you are a nurse, overtime income is readily accepted)
• Police, Fire and Rescue
• Emergency Services
Don’t worry! There are some lenders that can consider accepting 100% of your overtime even if you aren’t working in essential services.
• A letter from the employer confirming that you have received overtime income for the past one or two years
• Two recent payslips
• Your most recent group certificate
• The banks will then accept the lowest income proven by those three documents.
Some of our lenders only need two recent payslips and will then use the “Year-To-Date” figure on your payslips to calculate your annual gross income.
This is because the stability of overtime hours worked differs across all applicants depends on factors such as:
• The type of employment they are in
• The industry they are in
• The number of regular hours they work in a week
• The length of time they have been in their current job for
There are lenders who will consider your overtime income if you are no longer on probation and you have evidence of consistency in the overtime hours that you work.
Minimum length of employment: 3 month history of receiving overtime.
Maximum amount of overtime accepted: 100% up to a maximum of 70 hours per week in total hours worked.
Consistency: We have lenders that accept either a group certificate, YTD income figure or 3 months payslips as evidence of your overtime. This way we can present your loan to a lender that can work with the evidence you can provide.
Industry: All industries are accepted including mining, fork lift drivers, trades, construction, nurses, IT, finance industry employees and hospitality.
If you work in any of these industries you want to make your overtime income counts in a serviceability assessment.
We have access to several lenders who are willing to take your overtime income into consideration when assessing your home loan for approval.
If you have received overtime income for a minimum of three months then we can help you find a lender or bank that would be willing to consider this income for the assessment of your home loan application.
In general the overtime that you work may vary from week to week, but it can be somewhat consistent for those who work in healthcare, law enforcement or a variety of other industries.
If working overtime is a condition of your employment then the income from your extra hours is just as regular and stable as your base wage.
As a result of this, the lenders are trying to avoid the risk of getting your home loan approved and then running into trouble when you are suddenly no longer required to work overtime or work late by your employer.
When this happens there is a high chance that you can no longer make the required repayments on your mortgage.
Shift Allowance Home Loan
We can be particularly helpful for people working in essential services such as nursing where shift work is often a condition of employment.If you work in any of these professions, or receive shift allowances on a regular basis this type of mortgage is for you.
For this reason we tend to use two or three lenders on a regular basis that can accept the majority of shift allowances and penalty rates income.
Shift Allowances: 100% of shift allowance income can be accepted if the income is regular and ongoing.
Penalty Rates (Weekends): Penalty rates for working weekend shifts can be accepted at 100% for full time employees that have a regular roster.
Penalty Rates (Night Work): Penalty rates for working night shifts can be accepted at 100% for full time employees that have a regular roster.
Other allowances: Many employees receive other allowances for meals or transport which are generally not taken into account. If these allowances are not to reimburse you for an expense that you incur then we can get some of our lenders to consider this income as well.If you are not employed on a full time basis then please refer to our casual job page.
If the pay is irregular then most major banks & lenders will be less inclined to include it when assessing your home loan application.
Most lenders require:
• An annualised Year To Date (YTD) figure from your payslips
• Your group certificate or
• A letter from your employer
Although most lenders require two of these documents, we have some lenders that can consider just a letter or just pay slips in some situations.
Our staff will assess your situation on a case by case basis and then will discuss your options with you so you can then pick the lender that you prefer.
The reality is, banks simply don’t understand shift work! Bank employees work regular hours and view other types of employment as being unusual or risky.
The good news is that not every lender views your income in this way! When applying for a home loan with the support of allowance income lenders are wary because they believe that the shifts you’re assigned may change in which case, you would no longer be receiving your penalty rates.
However, we know that this is simply not true! Lenders tend to have very outdated policies that don’t take modern employment agreements into consideration. We can help you with your serviceability assessment. Depending on how regularly you receive your allowances, we can ensure that you apply with a lender that will include this income when assessing your ability to repay the loan.
Second Job Home Loan
You may be working in a full-time or part-time job, but need extra funds to cover all your expenses.
The second job may be in the same industry or may be alternative work in another sector.
Alternatively, some people may want to learn new skills, try out a new career or work in a new field.
Our best lender for 2nd jobs can accept 100% of your income from all of your jobs as long as you have been employed for at least 3 months. If you have not been employed for 3 months they can sometimes consider income from brand new jobs if you have an excellent credit history.
As a result you may be told that you “don’t earn enough”, “can’t be just working part-time” or that you “don’t meet bank policy” and your loan may be declined.
However, this bank policy makes no sense at all, people with multiple income sources and career options have a stable and diverse source of income so are actually a lower risk to a bank!
In our experience people with several jobs are hard workers, are motivated to save a deposit for their home and are far less likely to run into financial hardship when repaying a mortgage.
We know which lenders will approve your mortgage, so don’t waste time applying with banks which may not treat your second job income as stable.
A second job can provide individuals with the opportunity to fulfil life long goals or a job that could potentially turn into a full-time career.
Some people take up a second job to pay for their lifestyle, finance trips overseas or large purchases or pay off existing or future debt.
Bonus Income Home Loan
It largely depends on how regular the bonus payments are received:
Monthly or quarterly bonuses: One of our lenders can accept 100% of your bonuses if they are paid regularly and you can provide a letter from your employer confirming that they are regular and ongoing. In this case, you can borrow up to 90% of the property value if you have a minimum three month history of receiving bonuses and up to 95% if you have a two year history of bonus income.
Annual bonuses: One of our lenders may accept 100% of your annual bonus! However, you will be required to supply them with a two year history of your earnings in order to prove that this income is ongoing. You may be entitled to borrow up to 90% of the property value and up to 95% on a case by case basis.
Performance based bonuses: These bonuses can be included depending on how regularly you have received them in the past & for how long you have been receiving them.
Irregular bonuses: If your bonus is irregular then it will be assessed on a case by case basis.
One off bonuses: One off bonuses cannot be included as part of your assessable income.
In some cases employers simply don’t pay the bonuses that they have promised, or they move the goal posts making the targets effectively impossible to reach.
Because of the fact that bonuses are based on the employee’s overall performance and they are often paid at the employer’s discretion, it becomes difficult for the banks to consider these bonuses in their assessment. In comparison to a regular monthly salary, bonuses are a very unreliable and unpredictable measure of consistent income.
Additionally, many bonuses are not paid monthly but rather annually or quarterly, making it harder for those who pay their bills on a day to day basis.
Most lenders will require some or all of the following:
Two current consecutive payslips.
Letter of entitlement from your employer / letter confirming your bonuses are likely to continue.
Your most recent tax return or group certificate, in some cases two years tax returns may be required.
[su_spoiler icon=”caret” class=”faq-spoiler” title=”5)Which Type of Home Loans are available?
All loan types: Professional packages, basic loans, lines of credit, fixed rates.
Commission Income Home Loan
Despite this, it may be difficult to obtain a mortgage because banks are reluctant to assess their full income. However, we can help! Read on to find out more.
When applying for a home loan it is important to choose a lender that will accept 100% of your commission income rather than just 50% as is common practice with many lenders. In particular many lenders do not accept any of your income if there is any sign of inconsistency. This can occur simply because you took a holiday or because of a normal seasonal dip in sales.
We know lenders that may accept 100% of your commission income, depending on your circumstances. Please enquire online to talk to a mortgage broker who specialises in commissions income home loans.
Lenders are more comfortable with those who earn a regular monthly salary. However, there are lenders that may still allow you to borrow..
Show the banks commission income is reliable.
In our experience salespeople tend to have very stable incomes and can support a loan without posing a higher risk to themselves and the lender. This is because of a few factors that many lenders don’t take into account:
You can always work harder to earn more money.
Nothing motivates you to succeed more than the need to meet financial commitments such as a mortgage.
Salesmen cost a company very little to keep employed in comparison to salaried employees. As a result they are less likely to be made redundant during economic downturns.
You know how stable your income is and you would not apply for a loan unless you are confident that you can meet the repayments.
Your two most recent payslips. This must show your Year To Date (YTD) income which the bank can then extrapolate to calculate your annual income. Your YTD income must cover a period of at least 3 months to be acceptable on its own.
If your payslip does not show a year to date income then you may have to provide additional documents such as:
• Your most recent group certificate or tax return.
• A letter from your employer.
• Other evidence of your sales targets and sales results covering a period of no less than 3 months.
• However most lenders are not so lenient and may require the following:
• Two years tax returns and notices of assessment. The lender will then average the two years income.
• A letter from your employer confirming that you receive regular commission income.
If you think that you may have difficulty providing this documentation, there is no need to worry! We know lenders that MAY approve your home loan with as little as three months evidence of your commission income
Contractor Home LoanEach type of contract worker is treated differently by the banks:
They can receive normal holiday and sick leave benefits (depending on their contract terms) while also having their tax withheld and super paid for.
PAYG contractors and those working a commissioned job generally have to prove a strong track record of experience in the same industry as well as future employment stability.
However one of our banks can consider lending to people employed on a PAYG contract with normal home loan rates even if they have one day on the job!
In other cases they set up a company or trust which enters into the contract, which then employs them on a PAYG basis.
Management consultants in most cases come under the category of self employed contractors.
Most self employed borrowers need to be in their current role for two years before they can get a mortgage. However one of our lenders looks favourably upon contractors and those working on commissioned jobs if they just contract to one main employer and if they work for a hourly or daily rate.
In these situations you will need to prove your current income with your invoices as well as your prior income in past roles.
If you are in a white collar profession and have no expenses of your own then we can help you even if you have been in your job for just one day!
If your pay fluctuates significantly then you may need to prove more than a 12 month employment history to enable the lender to accurately determine your income.
Generally the lender will calculate your average income less any GST component and taking into account 2 – 4 weeks in unpaid holidays each year.
We can help self employed contractors in most situations, even if they have set up their own company which invoices the company they contract to.
In particular, if you have no staff other than yourself and no major expenses, one of our lenders can approve a loan for you!
All of our mortgage brokers are self employed contractors just like you, and know how to get your loan approved!
One of our lenders can approve mine worker home loans by taking a common sense approach and acknowledging that most workers can easily find alternative employment in the event that their contract is not renewed.
Due to the low number of skilled IT consultants in Australia and the high demand from employers we believe IT industry contract workers are actually a very low risk and so we are happy to assist you.
This means that he will be assessed in the same way as a self-employed contractor and may be required to provide the bank with two years recent tax returns. However, if they just provide the labour, they may be assessed like any other contractor.
As a freelance worker your income can be assessed using several different methods depending on the frequency, reliability and ongoing nature of your income.
The secret to getting a home loan while working as a contractor is to apply with the right bank.
Non conforming non-bank lenders may also be able to help however in most cases we prefer to work with major lenders as then you can get a very competitive interest rate.
If you are in a strong financial position we can help you to get approved for a 95% or 100% mortgage (100% only available as a guarantor loan).
Low doc loans are also available.
Our expert brokers know the policies of all the major lenders in Australia and know which ones are more willing to extend you a discount.