Taking time off to have a baby should not mean putting your property goals on hold. With the right lender and the right broker, you can absolutely get a home loan while on parental leave — including maternity leave, paternity leave, and adoption leave.
📅 Book Free Consultation 📞 02 8046 3933Yes, you can get a home loan while on parental leave. But — and this is the critical part — not all lenders treat parental leave the same way. Some lenders will assess your full pre-leave salary as long as you provide a return-to-work letter. Others will only assess your current reduced income, which can slash your borrowing power by $200,000 or more.
This is exactly why using a mortgage broker who understands parental leave lending is essential. At Lend & Loan, we know which lenders on our panel of 50+ are parental-leave friendly, what documentation they require, and how to present your application for the best possible outcome.
The single most important document for a parental leave home loan application is a return-to-work letter from your employer. This letter must confirm your return date — ideally within 12 months, the role you are returning to, your salary upon return, and whether you are returning full-time or part-time.
Beyond the return-to-work letter, you will also need your most recent payslips showing your pre-leave salary, your most recent tax return or Notice of Assessment, evidence of any paid parental leave you are currently receiving (employer-funded or government-funded), and the standard income and expense documentation required for any home loan.
💡 Pro tip from John: Get your return-to-work letter before you start your loan application. If your employer is slow to provide one, we can advise on the exact wording that lenders need. A vague letter ("we look forward to welcoming Sarah back") is not enough, it must specify date, role, and salary.
On parental leave and want to buy?
We'll tell you exactly which lenders will assess your full salary — not your reduced leave income. Free 15-minute call.
Book Free Consultation →The best lenders for parental leave borrowers will assess your full pre-leave salary as your ongoing income, provided you have a return-to-work letter confirming your return within 12 months. This means if you earned $130,000 before leave, you are assessed at $130,000 — regardless of the fact that you are currently receiving reduced or no income.
This is the optimal scenario and the one we aim for with every parental leave client.
Some lenders will assess you at your current income level during leave — which might be $0 (unpaid leave), the government Parental Leave Pay rate of approximately $183 per day, or your employer's paid leave rate (which may be full pay or half pay). Being assessed on this reduced figure dramatically reduces your borrowing power.
A few lenders will not assess parental leave applicants at all and will ask you to reapply once you have returned to work and received at least one payslip. This typically means a delay of 2 to 4 months after your return.
Full pre-leave salary assessed. Borrow up to $650K+ on $130K income. Available from select lenders.
Assessed on govt parental leave pay (~$48K/yr). Borrowing power drops to ~$280K.
Lender won't assess you until you're back at work. Delays your purchase by months.
The difference between the best and worst case can be $370,000 in borrowing power. This is why lender selection — through a broker who knows the landscape — is everything.
Many parents return to work on reduced hours — three or four days per week. Lenders will assess your income based on your actual return hours, not your full-time equivalent.
If your FTE salary is $120,000 and you are returning three days per week, your assessed income is $72,000. This significantly affects borrowing power, so it is worth considering whether to declare your initial return as full-time (if that is genuinely your intention) and reduce hours later, after the loan has settled.
We always advise clients to be honest with lenders — but we also help you understand the timing and sequencing that works in your favour.
If one partner is working and the other is on parental leave, the working partner's income anchors the application. The on-leave partner's income can be included at their return-to-work salary (with the right lender), which often brings borrowing power back to pre-baby levels.
For couples, the key strategy is ensuring the return-to-work letter for the on-leave partner is airtight and that the lender is one who will assess both incomes at their full return rates.
The Australian Government's Paid Parental Leave scheme provides up to 22 weeks of pay at the national minimum wage (approximately $183 per day or $48,000 annualised). Most lenders will not count this as income for serviceability purposes because it is temporary and significantly below most borrowers' actual earning capacity.
This is another reason why the return-to-work letter is critical, it allows the lender to look past the temporary leave period and assess your ongoing earning capacity.
Jessica, a marketing director earning $145,000, was 6 months into maternity leave when she and her partner found their dream home in Marrickville. Her partner earned $110,000. Their combined pre-leave income was $255,000.
Their bank assessed Jessica's income at $0 (unpaid portion of her leave) and offered the couple borrowing capacity of only $540,000 — based on her partner's income alone. Not enough for Marrickville.
We placed them with a lender who accepted Jessica's return-to-work letter confirming her return in 3 months at her full $145,000 salary. Combined assessed income: $255,000. New borrowing capacity: $1,080,000. They purchased a three-bedroom house for $1,020,000.
The difference between the wrong lender and the right lender was $540,000 in borrowing power.
Don't let parental leave derail your property plans
We've helped dozens of parents buy during leave. Free assessment — we'll tell you exactly what's possible.
Get My Parental Leave Assessment — Free →Get your return-to-work letter early. Before you start looking at properties, ask your employer for a formal letter. The sooner you have it, the sooner we can assess your options.
Keep your savings visible. Lenders want to see that you can manage repayments during the transition period. Having 3 to 6 months of repayments in savings or offset demonstrates your capacity to bridge the gap between leave and return to work.
Close unused credit cards. Every credit card limit reduces your borrowing power, even if the balance is zero. Closing unused cards before applying can add $30,000 to $50,000 in borrowing capacity.
Time your application strategically. If you are close to returning to work, it may be worth waiting until you have received your first payslip back. Some lenders who are hesitant during leave become fully comfortable once they see a payslip showing your return salary.
Use a broker. This is not optional for parental leave applications. A broker who knows which lenders are parental-leave friendly will save you from wasting time with lenders who will decline or underassess your application.
Yes — with the right lender and a return-to-work letter from your employer. Some lenders assess your full pre-leave salary, while others assess only your current reduced income. A broker ensures you are placed with the right lender.
Yes — almost all lenders require one. It must confirm your return date (ideally within 12 months), your role, and your salary upon return. A vague letter is not sufficient.
Yes, but your borrowing capacity will be assessed on your part-time income. If you are returning 3 days per week at $120,000 FTE, lenders will assess you on $72,000.
Unpaid leave is treated the same as paid leave by lenders who accept return-to-work letters. The key is demonstrating your ongoing employment and confirmed return date — not your current income level.
Yes, but your borrowing power will be limited to your partner's income alone. In most cases, including the on-leave partner (with a return-to-work letter) results in significantly higher borrowing capacity.
The same as any home loan — pre-approval in 2 to 5 days, formal approval in 5 to 10 days after finding a property. We manage the entire process so you can focus on your family.
John Pierre Saliba
Mortgage Broker & Director — Lend & Loan
MFAA accredited, 10+ years' experience, 77 five-star Google reviews. We've helped dozens of parents buy homes during parental leave, we know exactly which lenders work and which don't. Australian Credit Licence 511092.
Free consultation. We'll assess your parental leave situation, find the right lender, and get you pre-approved — often within 48 hours.
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