How Do PAYG Employees Refinance a Home Loan?
If you are paid a salary or wages with tax withheld by your employer, you are a PAYG borrower, and lenders consider your income the easiest to verify. The refinance itself follows the same six steps as any other (see how long refinancing takes), but the income check is quick: recent payslips, sometimes confirmed against your salary credits or an income statement from myGov.
Where PAYG refinances differ from one another is in the parts of your pay that are not base salary. Two lenders can look at the same payslip and arrive at borrowing capacities tens of thousands of dollars apart.
What Documents Does a PAYG Employee Need to Refinance?
- Photo identification for each borrower.
- Your two most recent payslips, showing year-to-date income.
- Your latest home loan statements, usually covering the last three to six months.
- Recent statements for credit cards, personal loans and car finance.
- A council rates notice for the property.
- If you rely on overtime, bonuses or commission: your most recent income statement or group certificate, and sometimes a letter from your employer.
How Do Lenders Count Each Type of PAYG Income?
| Income type | How lenders commonly treat it | Guide |
|---|---|---|
| Base salary or wages | Counted in full | This page |
| Overtime and shift penalties | Often 80% to 100% where regular, with 6 to 12 months of history | Overtime and shift income |
| Bonuses and commission | Often averaged over two years and shaded | Bonus and commission income |
| Casual or contract pay | Usually needs 6 to 12 months in the role | Casual and contract employment |
| New job or probation | Accepted by some lenders, not others | New job or probation |
| Parental leave | Return-to-work income accepted by some lenders with a letter | Refinancing on parental leave |
| Second job | Usually needs 6 to 12 months of history | Second job income |
| Salary packaging | Treated very differently between lenders | Salary packaging and novated leases |
These are general patterns across the lending market, not rules. Each lender sets its own policy and changes it without notice, which is the practical reason to have the scenario checked against 50+ lenders before applying.
A nurse earning a $85,000 base with $25,000 of regular shift penalties is a $110,000 borrower at one lender and closer to a $100,000 borrower at another. Neither is wrong; they just apply different policy. On a refinance that gap decides whether you can release equity, or whether you pass at all. Matching your pay structure to the right lender is most of my job on a PAYG file.
What Else Affects a PAYG Refinance?
- HECS or HELP debt. The compulsory repayment reduces assessable income. See HECS debt and home loans.
- Credit card limits. Assessed as if fully drawn, even when the balance is nil.
- Living expenses. Lenders compare what you declare with benchmarks and your statements.
- Loan-to-value ratio. Above 80%, lenders mortgage insurance may apply (see refinancing with less than 20% equity).
How Do You Make a PAYG Refinance Fast?
- Send clear, complete payslips and statements at the start.
- Have your employer's HR contact ready in case the lender verifies employment.
- Avoid changing jobs or taking new credit between application and settlement.
- Ask your current lender for a reprice first, so you know the real gap you are switching for. See repricing vs refinancing.
Costs are itemised in refinance costs and fees in NSW, and the break-even calculator shows how quickly a saving recovers them.
General information only. It does not take your objectives, financial situation or needs into account. All lending is subject to lender assessment and approval. Fees and figures are typical ranges at 14 November 2026 and can change. Lend & Loan, Australian Credit Licence 511092.
