Last updated: July 2026 · Reviewed by John Pierre Saliba, Director and Mortgage Broker, MFAA Accredited
Home Loans on a Single Income After Separation
Moving from a two-income household to a single income after separation is one of the most significant financial adjustments you'll face. The good news is that single-income home loans are entirely achievable, particularly when all available income streams (employment, child support, FTB, maintenance) are properly documented and presented to the right lender.
The biggest mistake I see is single parents dramatically underestimating their borrowing capacity. They assume that because they're on one income they can't get a meaningful loan. Once we add child support, FTB, and potentially rental income or a second job, the picture often changes dramatically. I always start with a full income audit before we decide which lender to approach.
All Income Sources That Count
- Employment income: Full-time, part-time, casual (with history), or self-employed
- Child support received: 80–100% included by most lenders with CSA documentation and 3–6 months of payment history
- Spousal maintenance: Included as income by most lenders with a court order or formal agreement
- Family Tax Benefit A and B: Included by most lenders, check remaining eligibility period
- Rental income: 70–80% of rental income included if you own an investment property
- Government payments: Some Centrelink payments accepted depending on type and lender
Maximising Your Borrowing Capacity
- Document everything: Every income source needs evidence, CSA assessment, bank statements, payment summaries, FTB statements
- Reduce liabilities: Pay down credit cards, reduce limits, close unused cards before applying
- Use a guarantor: A parent can provide a family guarantee, reducing the loan-to-value and eliminating LMI
- Consider First Home Guarantee: If eligible (income under $125,000 single), 5% deposit with no LMI
- Choose the right lender: Child support and FTB treatment varies significantly, lender selection adds real dollars to your borrowing capacity
Worked Example: Single Parent in Western Sydney
- Employment (part-time nurse): $62,000 p.a.
- Child support (2 children, CSA): $1,600/month = $19,200/year
- Family Tax Benefit A: $8,400/year
- Total assessed income: $89,600 (100% of child support)
- Deposit: $85,000 (from settlement + savings)
- Purchase price: $650,000 | LVR: 87% (LMI payable ~$14,000)
- Monthly repayment (6.69%): ~$3,040
- Outcome: Approved, total income sufficient with right lender
Government Schemes Available to Single Parents
- First Home Guarantee: 5% deposit, no LMI. Income cap $125,000 for singles. Property price cap varies by state ($900K in NSW).
- Family Home Guarantee: Specifically for single parents with at least one dependent. 2% deposit, no LMI. Income cap $125,000.
- State-based grants: First Home Owner Grant in NSW ($10,000 for new builds)
- Stamp duty concessions: First home buyer concessions available depending on price and state
