Updated January 2021:
Many Australians currently find themselves in new jobs due to Coronavirus and other reasons. As of January 2021, mortgage interest rates are at all-time lows, with some lenders offering rates of under 2.00%. Read on to understand how to get a home loan when you're in a new job.
The nature of your work can have a big impact on whether you secure a home loan.
It’s not uncommon, for instance, for home buyers to be knocked back for a loan – even by the bank they’ve always used, just because of their employment status.
This highlights how being an established customer of a bank is no guarantee that you’ll be offered a home loan.
What matters is the length of time you’ve been in your current job – the longer, the better. Here’s what you need to know.
Most lenders like to see that you’ve been in your current job for at least three months, and at a minimum, completed any probationary period. The bank may contact your boss to confirm your employment status.
Proof of employment that you’ll need to provide includes a minimum of two of your most recent, consecutive pay slips.
Permanent part-time employment
Again, you will need to have been in the job for at least three months, and provide evidence via several of your latest pay slips.
Lenders are likely to run an employment check when you work part-time, to confirm the minimum number of hours you work each week.
Casual employment is a more flexible type of employment as you will not receive a firm commitment from an employer about the length of employment or even the days or hours you’ll work each week. Having casual employment will mean that you may work irregular hours and benefits such as paid sick or annual leave is not available.
These differences with casual employment can make a lender stricter purely because there is less certainty over your income. While it’s still possible to get a home loan with casual employment, it is important to understand that lenders are strict on the terms of your income due to the responsible lending requirements outlined by the NCCP.
Reflecting this, lenders typically want to see that you’ve been with your current employer for a minimum of six months.
It’s likely you’ll need to show payslips that feature your latest year to date earnings summary. In addition, the lender may get in touch with your employer to check your employment status.
Tips to improve your chances of being approved with casual employment:
- Save for a sizable deposit: having a larger home loan deposit can help your application process as it gives the lender an idea of what you can afford to repay regularly.
- Use a guarantor: a guarantor can be used to provide additional security for your home loan. This will help provide extra assurance to a lender of how the loan can be serviced in the event you are unable to make the repayments.
- Saleable assets: having saleable assets can be a benefit when applying for a home loan on casual employment as it decreases the perceived risk lenders have in the event you are unable to service the loan.