How long do I need to be working before I can get my first home loan? This is a question we often get asked from many aspiring first home buyers who are looking to get into the market for the first time.
Many first home buyers only seriously consider buying their first home once they have stable employment as they are more comfortable with affording home loan repayments. Many also believe that lenders will require you to be employed for a minimum of 6 months or a year. However, we are pleased to confirm that this is not the case. At FHBA Mortgages – Australia’s exclusive first home loan service, we have access to many different lenders & products that can cater for just about anyone.
Disclaimer: Please note our website, including this article, is in no shape or form designed to replace the need to obtain professional advice from experts such as Mortgage Brokers. All information on our website is general & factual in nature, and should not be relied upon. In particular, we wish to remind you that the information in this article is not designed to replace advice. Please visit our website’s Terms & Conditions for more information. To speak with a licensed Lending Adviser please click here.
Full-time/Part-time (PAYG) permanent employment
Where you are employed on a full-time or part-time basis and receive annual leave, sick leave & other types of leave – the following applies:
If this is your first permanent job in the industry:
- If you are subject to a probationary period, most lenders will require you to have completed the probation period
- If you have completed your studies in the same field prior to starting your first job then some lenders will consider your application more favourably
- There are some lenders who only require one pay slip regardless of whether you are on probation or not, however it may attract higher interest rates
If you have passed probation in your first permanent job:
- You will have plenty of options as several lenders just require you to be employed permanently without being on probation
If you have recently changed employment:
- If you have changed jobs from one employer to another most lenders will require you to have 2 years employment history in the same industry and may require you to have passed the probation period in your new job (depending on the occupation/industry)
- There are some lenders who will still consider your income if you have less than 2 years employment in the same industry
- There are also some lenders who will lend to you if you are still on probation, but it may attract higher interest rates
Regardless of your situation, we will likely have a solution for your first home loan
Casual (temporary) Employment
Where you are employed on a temporary basis and do not receive leave entitlements, the following applies:
If this is your first temporary job in the industry:
- Most lenders will require at least 6 months casual/temporary employment with the same employer before considering your income
- However, there are a few lenders who will lend to you (at similar interest rates!) if you have only been in your first casual jobs for 3 months, however, the casual hours will need to be consistent in those 3 months
If you have changed employers for a new casual job:
- Most lenders like to see 1 year or 2 years employment history and look at your application more favourably if you were previously employed in a permanent role
- Regardless of how long you have been employed in the industry, most lenders will require you to be employed for a period of either 3 or 6 months. If you have an employment contract that states your minimum hours, then some lenders may consider the minimum hours multiplied by your hourly rate
Contract (PAYG) Employment
Where you are employed for a fixed period of time without set hours and usually don’t receive leave entitlements, the following applies:
If this is your first contract job in the industry:
- Most lenders will require you to be employed in your contract job for a period of at least 6 months before they can consider your income
- Exceptions may apply depending on the industry you are employed in and the duration of your fixed term contract. The longer the fixed term contract the more likely it is that lenders will consider your income if you have been working for less than 6 months
If you have recently changed employers and have a new contract job:
- Most lenders will require you to have been working in the same industry for a period of 1 – 2 years. If you have been employed permanently prior to your new role, then lenders will look at this more favourably
- Some lenders may consider self-employed contract income subject to the duration of your fixed term contract.
Self-employed Income
Where you derive your income from your own business and work under an ABN, the following applies:
How long does your ABN/Business need to be operating for:
- The majority of lenders will require you to have an active ABN for at least 2 years before they consider your income
- Some lenders will consider your income where you have only been self-employed for 1 year, however, this may attract higher interest rates
What happens if I have changed from PAYG employment to self-employment:
- Some exceptions may apply, where you are required to use your ABN to invoice an employer for your work performed, some lenders will consider your self employed income provided it is similar to your income at your previous job
Are you self-employed? Talk to us see how we can help you get your first home loan
How can I get help to determine my eligibility for a home loan?
It is important to seek professional advice when it comes to determining whether your employment situation will qualify you for your first home loan. There are several factors that lenders will consider when deciding whether to lend you money, some of these include:
- Your experience in the industry
- The type of industry you are working in
- The length of your employment contract
- Whether you are working in the private sector or Government sector
Every aspiring first home buyer’s situation is different; therefore it is important to get some expert advice on which product is suited to your needs. Are you looking to compare these different home loan products? Perhaps you just want to know your borrowing capacity or get a better understanding of how your first home loan works? Click here to speak with an FHBA Mortgage Broker, or simply complete the form below, and an FHBA Coach will be in touch with you:
