How to get a home loan when you’re on a single income 

For singles, a mortgage can be a bit like a long-term relationship. It’s something you commit to for decades, something that can bring you freedom and fulfilment—but it can also cause its fair share of stress.

Australian property prices are among the steepest in the world, despite recent falls. Getting a home loan is tough for everyone, but it can be especially so for a single person who isn’t splitting the costs with someone else. But it’s still attainable, with a little effort.

Some ways to make it easier

Know what you can afford

The first step to navigating the bumpy terrain of home-buying is to estimate your borrowing power. This is dependent on several things, such as your income, expenses, assets, and debts.

Check out Suncorp’s Borrowing Limit Home Loan Calculator to work out a personal estimate for your individual lifestyle. Our calculator gives you an idea of what’s available to you specifically—because remember, there’s no set loan for singles. The loan you receive is dependent on your personal circumstances, not your demographic. And your earning capacity alone won’t determine eligibility. A modest income can be offset by a frugal lifestyle and good saving habits.

Try Suncorp’s Borrowing Limit Home Loan Calculator

Knowing your borrowing limit allows you to take control of the home-buying process. You can browse a narrower pool of options, because you’ll know which properties are definitely out of reach, and you’ll have complete awareness of your top bidding amount at auctions.

Revaluate your expectations

Once you know your borrowing power, you should try to match your expectations to that. As a single income earner, you’ll probably be earning less money than the average couple. So, it’s important to be realistic about your future home.

Think about whether the dream home you’ve been picturing matches what you really need. Be open to different options, including ones you might have initially ignored. As a single, you need less space, so make use of that. Consider small houses or apartments in the outer suburbs. This makes it easier to get a single income home loan—plus you’ll be carrying a lighter mortgage once you do.

Get your finances in order

When a lender assesses your home loan application, they’ll be looking at your whole financial situation, not just your marital status. What’s really going to affect your outcome is your financial prudence, your ability to repay the loan. And displaying that includes having solid savings (6 months’ worth is a good amount to aim for), and good credit (remember to pay off your bills before you apply). Another thing to note is that lenders typically treat your credit card limit as debt. So, for example, if you have a card limit of $5000, to your lender, you’re $5000 in debt—even if you haven’t spent that amount! Lowering your card limit can efficiently reduce what’s perceived to be your overall debt, making you seem more trustworthy as a borrower.

As a single income earner, you may appear high-risk—after all, you don’t have a second income to fall back on. But if you can show discipline and saving smarts, it’s possible to get a loan approved.

Make use of first home buyer perks

First Home Owners Grant

There’s a government scheme that helps first home buyers get into their dream homes sooner. This is a great way for singles to boost their deposits and access loans more smoothly. Suncorp handles the tricky stuff—processing the grant application together with your Suncorp Bank Home Loan. Find out if you’re eligible for a First Home Owners Grant.

Suncorp’s offers for First Home Buyers

We understand the home-buying struggle—especially for those taking their first solo swim through the seemingly endless sea of costs and fees.

Suncorp’s offers for First Home Buyers can help ease some of the strain by refunding the annual $375 fee. You’ll potentially save up to $11,250 over a 30-year period!

Discover offers for First Home Buyers  

Get help from others

There’s no shame in getting some assistance from others. After all, you’re carrying this entire loan on your own.

Guarantors

This method may help you escape the pesky Lenders Mortgage Insurance (LMI). The LMI is insurance protecting your lender against loss if you fail to repay a loan. You’re required to pay it if you have a deposit of less than 20% (that is, if you borrow more than 80% of the loan).

Guarantors can help remove this cost, even if your deposit is small. If a close relative puts down their property as security, you become lower risk in the eyes of a lender. Though, it’s also important to note that guarantors are liable for the loan —if the person they guaranteed fails to repay what they owe, it becomes the guarantor’s responsibility.

Gifts

Couples are showered with wedding gifts and home appliances to help them transition to the home-owning life. But for some reason, this just doesn’t apply to singles.

As a single income earner, it’s handy to grab all the perks you can get. So, perhaps you could tell loved ones you’d prefer birthday gifts go to a mortgage fund instead. And don’t be embarrassed about receiving monetary gifts from your parents!

Applying for a home loan as a single person can be isolating. But remember, you have people who care right beside you. With a series of small steps, you’ll eventually get to hang the curtains and place down your first welcome mat.

Read more:

• Lingo to know before you buy a home
• From application to settlement: the flow of a home loan
• How much do you really need for a house deposit

Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.