Key takeaways
- Many lenders assess your return-to-work income, not your reduced leave pay.
- An employer letter confirming your return date, role and salary is usually key.
- Both buying and refinancing are possible while on parental leave.
- Lender choice matters — some assess return-to-work income far more readily.
New baby, big plans — and a nagging worry that being on leave means no bank will touch you. For a lot of parents, that worry is unfounded. Lenders deal with parental leave routinely, and many will look past your temporary leave pay to the income you’re returning to. The difference between a yes and a no is usually preparation and lender choice.
How lenders look at leave
The core question is what income you’ll have once you’re back at work. Many lenders assess your return-to-work salary rather than your reduced leave pay, provided you can evidence it — usually with a letter from your employer confirming your return date, your position, and your salary (full-time or an agreed part-time arrangement). Some will also factor in parental-leave payments.
Illustrative example. A parent returning to a $90,000 role in four months might have a lender assess that full salary now — with an employer letter confirming the return — rather than the lower leave pay, allowing the purchase to proceed on leave. Your outcome depends on your return arrangements and the lender.
Lenders also want comfort that you can manage repayments once normal life resumes — including new costs like childcare. Coming in with a clear budget and realistic return-to-work plan reassures them, and feeds your serviceability assessment.
Buying and refinancing both work
The same approach applies whether you’re purchasing or refinancing. Leave can even be a sensible time to lock in a better rate or restructure — as long as your return income is clear and repayments are manageable in the meantime. Just weigh any break costs if you’re leaving a fixed loan.
Preparing your application
Get your employer letter ready, map out your return-to-work income and post-baby budget, and keep your credit clean. Then apply to a lender that assesses return-to-work income well — rather than one that will fixate on your reduced leave pay. That matching is where a broker makes the difference.
Broker Insight. Being on leave rarely means waiting. With the right return-to-work letter, we regularly help parents buy or refinance while they’re still off work.
On leave and ready to move? Let’s make it work
We’ll find the lenders that assess your return-to-work income — so parental leave doesn’t hold up your plans. Free, no obligation.
Book your free game plan callFrequently asked questions
Can I get a home loan while on maternity leave?
Often, yes. Many lenders will assess your income based on your return to work rather than your reduced or paused leave pay — typically with a letter from your employer confirming your return date, position and salary. Some may also consider parental-leave payments. Policies vary, so choosing a lender that assesses return-to-work income favourably is the key to getting approved while on leave.
How do lenders assess income on parental leave?
Lenders commonly use your full-time (or agreed part-time) return-to-work salary, supported by an employer letter confirming your return details, rather than your temporarily reduced leave income. They’ll want confidence you can service the loan once repayments and your normal expenses (including childcare) resume. Being clear about your return arrangements and budget strengthens the application.
Can I refinance while on parental leave?
Yes, refinancing on parental leave is possible with lenders that assess return-to-work income. It can be a good time to secure a better rate or restructure, provided you can demonstrate the income you’ll return to and manage repayments in the meantime. As with a purchase, the right lender and clear evidence of your return make it straightforward.
This guide is general information only and does not take your personal circumstances into account. It is not financial or credit advice. Government schemes, lender policies, rates and tax rules change over time and eligibility criteria apply. Speak with us for advice tailored to your situation.