Refinancing your home loan while on maternity leave
Refinancing your home loan during maternity leave is something we see fairly commonly. It's not that surprising when you think about it. A new member of the family is often a catalyst for reassessing finances and looking for ways to make the household budget go further.
If you're on maternity leave and refinance your home loan (or apply for a new loan for that matter), the lender assesses your application taking into account your income, expenses, other debts and liabilities. Naturally with maternity leave, your income is likely to be the main factor that could impact your application, plus any extra expenses you’ll need to budget for when bub arrives.
If you refinance with your current lender and increase your loan amount while you’re on leave, they will also reassess your situation.
Under responsible lending rules, lenders must be satisfied you can afford the repayments, both now and after you return to work. That’s why your maternity leave matters.
How the process works
While you’re on maternity leave, your income may be lower or it may have stopped completely. So the key question is which income the lender will use: your current lower income or what you will be earning when you return to work.
We analysed 37 Australian lenders and of them 20 assess your refinance application based on the salary you’ll earn when you go back to work.
These lenders typically require:
- a letter from your employer confirming your return date, hours and salary (the return date must be within the lender’s allowable window, usually 12 months)
- evidence of your savings to cover any shortfall in repayments until you’re back
The other lenders we assessed use your parental leave pay, part of it, or the lower of the two.
If your partner is the one on leave, the same rules apply.
It gets more complicated if you’re self-employed, casual or have no set return-to-work date. If approval with a new lender is unlikely, we usually recommend asking your current lender for a better rate without refinancing.
5 steps to refinancing your home loan while you’re on maternity leave
Work out your situation
Your household income, return date and type of work decide which lenders will consider you.
Get your paperwork ready
That’s your employer letter, recent payslips and proof of savings.
Choose a lender whose policy fits
The right income policy can matter more than the absolutely lowest rate.
Apply
The lender checks your income, expenses and credit history, and orders a valuation of your home.
Settle
Once you’re approved and have signed the loan documents, your new lender pays out your old loan. Approval can come within a week or two, and settlement usually follows within one to two weeks.
Client case study: How the right lender policy got our client approved on her return-to-work salary
Michael Burgess, Money.com.au Senior Mortgage Broker
“I recently helped a couple in Melbourne with two young children who wanted a sharper rate on their home loan. Mum was on maternity leave with a return date about nine months away, and her partner was working full-time.
The tricky part was her income while on leave, which was only a fraction of her normal salary. So our focus wasn’t just on finding a lower rate. It was finding a lender that would assess her on what she’d be earning when she went back to work.
Otherwise, the couple were in a strong position, with an LVR below 60% and an employer letter confirming her return date and salary. In the end, we went with St.George, which accepts return-to-work salary as long as you can show savings to cover the gap until you’re back.
Once we had the right lender and the right documents in place, the application moved quickly. We were able to secure a competitive rate with a fast refinance process that cut several weeks off the standard timeline. This was something that really mattered for a family juggling two young kids and didn't want a refinance hanging over them for months.”
Michael Burgess, Money.com.au Senior Mortgage Broker
What’s your maternity leave situation?
According to our experienced brokers, the leave itself is rarely the deciding factor. Your situation in terms of household income, savings, the type of work you do and whether you have an employer letter, matter more.
Your situation | On paid leave, returning to the same employer on a set date |
|---|---|
How lenders see it | This is the most straightforward case. Most lenders will assess your return-to-work salary at 100%. |
What you need | An employer letter and enough savings to cover the gap. |
Your situation | Your partner's income covers the loan on its own |
How lenders see it | Your leave may barely matter. |
What you need | Make sure your expenses include the new baby. Lenders will check. |
Your situation | Paid leave has ended and you're on government pay or unpaid leave |
How lenders see it | Workable with most return-to-work lenders if your savings cover the shortfall. |
What you need | Show savings or offset funds, plus an employer letter. |
Your situation | You're self-employed |
How lenders see it | This is more complex as there's no employer letter, and your tax returns may show a low-income year. |
What you need | Talk to a broker before applying. Pre-leave tax returns and an accountant's letter may help. |
Your situation | You're not going back, or returning to very few hours |
How lenders see it | Lenders can only count the income you'll actually earn. |
What you need | If what's left doesn't cover the loan, ask your current lender for a rate review. |
Your situation | You're back, but in a new job or casual role |
How lenders see it | It can be harder than staying on leave. Some lenders want a minimum time in a new job. |
What you need | Wait until you've passed probation, or use a lender that's flexible on job tenure. |
| Your situation | How lenders see it | What you need |
|---|---|---|
On paid leave, returning to the same employer on a set date | This is the most straightforward case. Most lenders will assess your return-to-work salary at 100%. | An employer letter and enough savings to cover the gap. |
Your partner's income covers the loan on its own | Your leave may barely matter. | Make sure your expenses include the new baby. Lenders will check. |
Paid leave has ended and you're on government pay or unpaid leave | Workable with most return-to-work lenders if your savings cover the shortfall. | Show savings or offset funds, plus an employer letter. |
You're self-employed | This is more complex as there's no employer letter, and your tax returns may show a low-income year. | Talk to a broker before applying. Pre-leave tax returns and an accountant's letter may help. |
You're not going back, or returning to very few hours | Lenders can only count the income you'll actually earn. | If what's left doesn't cover the loan, ask your current lender for a rate review. |
You're back, but in a new job or casual role | It can be harder than staying on leave. Some lenders want a minimum time in a new job. | Wait until you've passed probation, or use a lender that's flexible on job tenure. |
How different lenders assess your maternity leave income
Lenders take different approaches to parental leave income. Here’s how the various lenders we assessed approach it:
Lenders that assess based on return-to-work salary
- ANZ
- Apollo
- Athena
- Auswide Bank/MyState Bank
- Bendigo Bank
- Beyond Bank
- Gateway Bank
- Great Southern Bank
- ING
- Macquarie
- NAB
- Newcastle Permanent
- P&N Bank
- People First Bank
- Qudos Bank
- St.George/Bank of Melbourne/BankSA
- Teachers Mutual bank
- Thinktank
- UBank
- Westpac
Lenders that assess based on 100% of leave pay
- Bankwest
- ME Bank
- Resimac
Lenders that assess based on lower of leave pay and return to work salary
- AMP
- Bank of Us
- Credit Union SA
- Firstmac
Lenders that assess based lowest income during leave
- Pepper
- Skip
Lenders that assess based part of leave pay
- Bank of Sydney (75%)
- Granite (50%)
- OwnHome (50%)
- WLTH (50%)
- Zeus (50%)
Money.com.au analysis of lender policies as at November 2026. One lender we assessed (MA Money) only accepts applications once the person on leave has returned to work.
Lender-by-lender maternity leave policies in detail
Lender policies
| Lender | Income assessed | Key conditions |
|---|---|---|
| ANZ | Return-to-work salary, 100% | Back within 12 months. Savings to cover any shortfall. Available before or during leave |
| Auswide / MyState | Return-to-work salary, 100%, adjusted for reduced hours | Same employer. Savings required. Statutory declaration |
| Bendigo | Return-to-work salary, 100% | Same employer. Savings required. Childcare counted |
| Beyond Bank | Return-to-work salary, 100% | Must confirm affordability. Childcare counted. Two payslips or six pay periods of statements |
| Gateway Bank | Return-to-work salary | Back within 12 months. Savings required. Max LVR 80%. Letter under two months old |
| ING | Return-to-work salary | Leave of up to two years. Shortfall covered by savings, redraw or Family Tax Benefit. Letter under 60 days old |
| NAB | Return-to-work salary | Must show how you'll service during leave. Childcare counted. Alternative verification if no letter |
| Newcastle Permanent | Return-to-work salary, depending on income type | Back within three months. Letter with ABN or ACN |
| P&N Bank | Return-to-work salary | Savings required. Credit approval required |
| People First Bank | Return-to-work salary, 100% | Back within three months. Email confirmation accepted. LMI applications case by case |
| Qudos | Return-to-work salary, as confirmed by employer | Savings required. Letter on letterhead with ABN |
| St.George | Return-to-work base salary only | If first repayment is before return: savings required and LVR caps apply. No LMI investment loans |
| Teachers Mutual | Return-to-work salary, 100% | Back within 12 months. Employer confirmation |
| Thinktank | Return-to-work salary, 100% | Savings including future childcare. New dependant costs counted |
| UBank | Permanent PAYG base salary, 100% | Must show a strategy to cover commitments. Payslips accepted instead of a letter |
| Westpac | Return-to-work base salary only | If first repayment is before return: savings required, max LVR 80% without LMI or 90% with LMI (owner-occupied). No LMI investment loans |
| Bankwest | Parental leave pay, 100% | Return date required. Centrelink letter accepted. Extra credit review if leave pay is needed for servicing |
| ME Bank | Parental leave pay, 100% | Savings for unpaid periods. Signed letter under four weeks old. Employer verified independently |
| Resimac | Employer- and government-paid leave, 100% | Back within 12 months. Savings required. Letter must state return salary |
| AMP | Lower of salary and leave pay | Leave of 12 months or less. Savings for up to 12 months. Casuals accepted if leave is paid |
| Bank of Us | Total income over the next 12 months, or return income if lower | No income counted for unpaid gaps |
| Credit Union SA | Lower of leave pay and return-to-work salary | Government-paid leave needs credit approval and may be discounted |
| Firstmac | Lower of leave pay and return-to-work salary | Same employer. Savings required. Childcare counted. Return income may be used if back within 60 days of settlement |
| Apollo | Leave salary or return-to-work salary | Leave of up to nine months. Savings required |
| Athena | Leave salary or return-to-work salary | Leave of up to nine months. Savings required |
| Great Southern Bank | Return-to-work salary if back within three months of funding, otherwise leave pay | Savings help but don't count as income. Employer call accepted |
| Macquarie | Leave pay if receiving it, otherwise return-to-work salary | Savings for the full leave period, including future childcare. Letter under 60 days old |
| Bank of Sydney | 75% of leave pay over the next 12 months | Max LVR 80%. Childcare during and after leave counted |
| Granite | 50% of leave pay | Leave pay must continue until return |
| OwnHome | 50% of leave pay | One income type only. Letter under 60 days old |
| WLTH | 50% of leave pay | Leave pay must continue until return |
| Zeus | 50% of leave pay | Leave pay must continue until return |
| Pepper | Lowest income during leave, 100% | Income gap of no more than three months. Savings required |
| Skip | Lowest regular amount during leave | Letter under 30 days old |
| AFG Retro | Pre-leave income | Permanent only. At least 12 months with employer. Must show you can service during leave |
| MA Money | Full income once back at work | Two most recent payslips |
| VMG | Accepted, method not confirmed | Details not confirmed |
If you've recently had a baby, something all lenders will consider when you refinance is the fact that you now have a new dependent on your application. This will impact your borrowing capacity, as lenders consider the additional expense that comes with having another mouth to feed.
How a drop in income during maternity leave can impact your home loan borrowing power
We ran the same family through Money.com.au’s borrowing capacity calculations for more than 20 lenders on our panel. The only difference was how Mum’s income was assessed, but there was a median gap of more than $250,000 between the lenders that assess based on return-to-work salary versus salary while on leave.
Combined family income | |
Lender assesses half-pay leave | $145,000 |
Lender assesses full return-to-work salary | $190,000 |
Highest borrowing capacity | |
Lender assesses half-pay leave | $646,000 |
Lender assesses full return-to-work salary | $905,000 |
Median lender borrowing | |
Lender assesses half-pay leave | $636,000 |
Lender assesses full return-to-work salary | $889,000 |
Difference | |
Lender assesses half-pay leave | |
Lender assesses full return-to-work salary | +$253,000 |
| Lender assesses half-pay leave | Lender assesses full return-to-work salary | |
|---|---|---|
Combined family income | $145,000 | $190,000 |
Highest borrowing capacity | $646,000 | $905,000 |
Median lender borrowing | $636,000 | $889,000 |
Difference | +$253,000 |
What your maternity leave employer letter needs to include
Senior mortgage broker, Nick Burgess, explains the letter from your employer can be kept simple.
"It really just needs to be something along the lines of returning to work on X date on the same salary as before, or a part-time salary.”
If you plan to refinance or apply for a new loan, it’s worth getting your HR department to issue this letter before you start the application process, so you don’t end up with delays.
To satisfy the widest range of lender requirements, your letter should:
- be on company letterhead showing the employer's ABN
- be signed and dated within the last 60 days (some lenders want four weeks)
- state your return-to-work date
- confirm your role, hours and employment type on return
- state your gross annual salary on return
The return date and hours must reflect your genuine plans. If they change, tell your broker or lender.
If your employer won't commit in writing, some lenders accept alternatives. For example, NAB, UBank, Great Southern Bank, People First Bank and Bankwest variously accept payslips, an employer call or email, or a Centrelink letter.
How much savings will I need to cover the gap?
Most lenders also want proof you can meet repayments until your full income resumes.
Say, for example, the repayments on your home loan will be $3,000 a month and household expenses, including the baby, are $4,000. Your partner takes home $6,000 a month and your paid leave has ended. That's a $1,000 monthly shortfall. If you return in six months, you'll need at least $6,000 in savings, offset or redraw funds.
Some lenders, including Macquarie and non-bank lender Thinktank also factor in childcare costs that start when you return.
What can I do if I can't refinance?
Ask for a rate review
If you’re on maternity leave but not in a position to refinance, ask your current lender for a rate review. That doesn’t involve a new application or serviceability assessment.
Lenders often charge existing customers more than new ones. The ACCC’s 2020 home loan price inquiry found borrowers with variable rate loans three to five years old were paying around 0.58 percentage points more than the average rate for new loans.
The gap was even bigger on older loans. Rate discounts like this are generally only offered on variable rate loans, and a competing offer from another lender strengthens your case.
"Send your lender evidence of another provider's offer, and they usually try and match it,” Nick suggests.
“We recently spoke with a self-employed mum on government paid parental leave, returning only a day a week. Her partner worked as a casual relief teacher. No lender was a confident fit, so we suggested a rate review with their current lender instead.”
Explore options for lowering your repayments temporarily
If cashflow is the issue rather than the rate, your lender may let you extend your loan term or switch to interest-only for a period. Both options will lower repayments, but be aware that they will mean you pay more in interest over time.
If you're struggling, you can apply for hardship assistance. Just note a hardship arrangement can appear on your credit report for 12 months.
What to watch out for if you’re refinancing while on maternity leave
Refinance costs
When you’re on maternity leave, refinancing to lower your loan costs may be particularly appealing. But there are switching costs, such as discharge and government registration fees, that could offset the savings if you’re not careful. You’ll need to be switching to a genuinely cheaper loan to make it worth your while. Also check what you’d lose by leaving your current loan, such as loan features you benefit from.
New costs in your budget
With a new bub on the way, lenders build childcare and a larger household into their calculations. Estimate your spending honestly, as they'll check your statements.
A lower valuation
Particularly in the current climate, the bank's valuation may come in under online expectation, pushing up your LVR and possibly your rate.
Cashing out equity
Lenders are cautious about lending extra to cover living costs while your income is reduced.
Starting a new job
One borrower we worked with returned from more than a year of leave to a new permanent role. The lender wanted six months in the job first, so the refinance stalled.
