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Are you eligible for a home loan?



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If you’re considering whether to buy a property, you may be wondering if you are eligible for a home loan. Some factors that will affect your application include:

  • Income level
  • Employment status
  • Australian residency status
  • Marital status
  • Potentially, age

Read on to discover Benevolence Financial Group’s summary of what you’ll need to be eligible for a home loan.

Australian citizenship/residency status

If you are single, the majority of Australian lenders will require you to be either a permanent resident (PR) or citizen of Australia. While it’s not impossible to get a home loan in Australia if you are neither a PR nor a citizen, it is much more difficult.

If you’re a couple, generally only one person will need to either be a citizen or a PR if you are applying jointly.

In terms of documents, if you are an Australian citizen you can use your birth certificate as proof of citizenship. If you are a PR, you can use your visa documentation as proof of your Australian residency status.

Australian citizenship/residency status. Passport of Australia in pocket jeans.
Passport of Australia

Employment status

Your employment status will strongly impact the likelihood of attaining a home loan. It is possible to attain a loan based on asset ownership or other means. But, generally speaking, you must be employed and earning a regular wage of salary.

If you are classified as a PAYG (pay as you go) employee, you will have tax withheld by your employer. Usually, providing two or three recent payslips will suffice for most lenders. Occasionally, a lender will ask for a letter confirming your employment from a manager or a colleague, but this is increasingly rare these days.

Lenders are more likely to approve full-time employees for a home loan. Yet, that’s not to say part-time and casual employees cannot get a home loan. For the latter, lenders will make a case-by-case decision. So, if you are looking for a home loan but are not employed full-time, don’t worry. And the same goes for the self-employed – there are more conditions to applying for a home loan, so, don’t be discouraged.

Lenders also prefer borrowers who have been in their current role for at least 12 months, or if not, have been employed in the same industry for at least two years. However, it is important to note that this is not necessarily a hard and fast rule.

If you ever want more information on how your employment status affects your home loan application, or anything else concerning home loans, don’t hesitate to reach out to us, any time. We are more than happy to tailor personal advice to you.

Your income

Your income level will correlate to how much you are able to borrow. The domain of income doesn’t only include a salary from an employer, it can also include dividends from shares, fringe benefits and income from a rental property.

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Your credit history

Your credit history, which is available through multiple credit agencies, will definitely impact your home loan application outcome. In fact, your credit history will display any borrowing you may have done, including: credit cards, phone or pay-TV bills, personal loans and car loans.

If you know you have issues with your credit, don’t despair. BFG partners with lenders that specialise in helping clients with a bad credit history. For a confidential discussion, contact us any time.


If you are looking to borrow more than 80 per cent of the value of the property (i.e. you have less than 20 per cent deposit), most lenders will require you to take out lenders mortgage insurance (LMI). You will need an additional 5 per cent deposit, but most lenders will require at least 10 per cent.

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Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstances and requirements.

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