Can I get a home loan with low income?

warehouse worker looking for a home loan

 Estimated read time: 2 Minutes

Many people believe that if you have a low income, you’re not eligible for a home loan. But all is not lost - if your household income is supported by benefits outside of your standard employment income then your home loan dreams could still become a reality.

Can I get a home loan with government benefits as my income source?

You might find it difficult to obtain a home loan if Centrelink or other regular government payments are your only source of income.

The government benefits that may count as valid income include:

  • Carers allowance
  • Disability support
  • Long term pensions (War/Widow's pension)
  • Family Tax Benefits (Parts A & B)

Preparing for a home loan with low income

While having low income can make things challenging, there are some simple strategies you could implement to put you on the front foot when looking to secure a home loan.

Understand your cashflow

Working out where and when money comes in and out can help you to work out how much you might be able to borrow from a lender. To get an idea of your current borrowing power, use our handy online calculator.

Reduce debt

Debt is seen as a liability by lenders, so it’s important to work out how much debt you have and whether you can reduce it. Here are some tips from the team that could help you save cash and reduce debt.

Saving for a deposit

Many lenders require a minimum of 10% of the price of the property you wish to buy as a deposit. It’s not pocket change, so it’s important that you have enough savings for a deposit before you apply for a home loan. Our savings calculator can help you work out how quickly you can save for a deposit based on your current budget.

Help from a guarantor

Lenders may consider you for a loan if you have financial backing from a guarantor. Often a family member or friend who will be responsible for paying back the loan if you are unable to - there are several legal ramifications of having a guarantor in place, so it could be a good idea to get some legal advice to understand how this process works before choosing this path.

Low income? We’re here to help

As a specialist lender, we consider alternative income sources, including government benefits when evaluating your loan application. Find out more information about the types of income we accept towards a home loan.

We’ll talk to you to fully understand your individual situation, as well as completing a personal credit assessment of each application to make sure we’re able to provide you with a loan that’ll meet your specific needs.

And most importantly, that won’t put you in a loan that you can’t afford. Want to know more? Read about our responsible lending practices.

Contributor | Neil Culkin, Head of Credit and Settlements

Neil has a 20-year career in credit provision. At Pepper Money, he oversees the underwriting and credit control of all consumer finance loan applications. He is also responsible for updating lending policies and guidelines. Read more.

Apply for a Pepper Money Home Loan

Want to find out where you stand?

We've got the online tools and calculators to help get your home loan journey underway. Work out how much you may be able to borrow and even quickly find out what indicative interest rate you might be eligible for.
Let's Get Started

Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.

All applications for credit are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. 

The results of the borrowing power calculator are based on information you have provided and is to be used as a guide only. The output of the calculator is subject to the assumptions provided in the calculator (see 'about this calculator') and are subject to change. It does not constitute a quote, pre-qualification, approval for credit or an offer for credit and you should not enter commitments based on it. The interest rates do not reflect true interest rates and the formula used for the purpose of calculating estimated borrowing power is based on the assumption that interest rates remain constant for the chosen loan term. Your borrowing power amount will be different if a full application is submitted and we complete responsible lending assessment. The results in the calculator do not take into account loan setup or establishment fees nor government, statutory or lenders fees, which may be applicable from time to time. Calculator by Widgetworks.

Pepper Money Personal Loans is a brand of Pepper Money Limited. Credit is provided by Now Finance Group Pty Ltd, Australian Credit Licence Number 425142 as agent for NF Finco 2 Pty Limited ACN 164 213 030. Personal information for Pepper Money Personal Loans is collected, used and disclosed in accordance with Pepper’s Privacy Policy & the credit provider’s Privacy Policy.

Pepper Money Limited ABN 55 094 317 665; AFSL and Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans.

Pepper and the Pepper Money logo are registered trademarks of Pepper Group Assets (Australia) Pty Limited and are used under licence.

Get in touch with a Lending Specialist

Tell us about your situation. The more we learn, the better we can help.