It's harder to get a home loan as a casual worker because lenders consider borrowers with casual incomes to be "higher risk". This is not always the case in reality, but all lenders create policies based around their risk perceptions. Some banks and lenders have friendlier policies towards casual works, and for the most part, the most common home loan option for casual workers is a low doc home loan.
Let's explore how these loans work and how to improve your chances of being approved for a home loan as a casual worker.
If you're a casual worker applying for a home loan, you'll need to show that you've been working steadily by providing the last 2 years' worth of ATO Notice of Assessments.
The lender will often use the year with the lowest income as an indication of what you're earning. This way they can make sure they are meeting their legal responsibility of ensuring you can afford the loan.
If you have not been with the same job for several years, it can be more difficult demonstrating proof of consistent income. Ongoing employment in the same industry can help. For instance, if you've had 2 casual jobs in the last 3 years, but they both involved working in hospitality, that can help provide evidence of consistency in employment to the bank.
The most common type of home loan for casual workers is a low doc home loan, which is a mortgage that is designed for the self-employed or those who receive an irregular income, rather than a consistent PAYG income. These types of loans are considered to be riskier than a regular home loan, so they often charge slightly higher interest rates. In some cases, lenders may implement lower LVR caps, which means they require you to save a larger deposit.
Consider the following when applying for your loan:
Because applying for a home loan as a casual worker is a little more niche, you might find that a mortgage broker will be able to guide you towards the right lenders and great deals.
The more evidence you can give of being in steady casual employment, the better. But typically, you could be approved for a low doc home loan with a minimum of 12 months employment in the same industry. Even with applying for a traditional home loan, you typically need to have been in your current role for at least 6 months.
That could be ok. You need to prove steady employment in the same industry. So if you've switched to a new job but it's in the same industry, that's probably fine. If you've completely changed industries, you might need to wait another 12 months before you can apply for a loan.
Learn more about the Help to Buy scheme and how it can help home buyers.
Here’s a breakdown of exactly what foreclosure means.
All Australian home loan types explained, from the common to the specific.
Historic data and expert opinion suggests that even in the event of a recession, Australian property prices might actually rise.
Learn about the neobanks and digital challengers offering new, innovative home loans in Australia.
If your lender was to collapse, not much would change to your home loan.
Redraw and offset accounts are handy features to have on your home loan and can save you thousands in interest on your repayments.
Non-bank mortgage lenders might approve your home loan when the banks say no.
Find the cheapest home loan rates and learn how to decide which one best fits your needs and will save you the most money.
What is an offset account? It can save you thousands in interest and help you own your home sooner.
I have been working for a company for 4 year’s and recently moved to the same position but as a casual. I have been in this role as a casual for 6 weeks and will continue for another 5 Months until I take up a new role with a different company.
I want to buy a property with My Parent who is retired but wants to do this as joint tenancy so if she passes her half will pass onto me.
Can this be done?
Hi Alfred,
It is possible to get a loan as a casual employee. Partnering up with your parent could help you demonstrate to the bank that you have the capacity to pay your mortgage payments.
Keep in mind that there are a number of factors that come into play when it comes to loan approvals and co-owning a property. Typically, a bank or lender will ask you for the last two years’ worth of tax records to prove that you have been continuously employed.
If you’re planning to submit a joint application together with a parent, it’s best to check the lender’s eligibility, requirements and relevant terms and conditions. You may also want to consult a mortgage broker. On the top left of this page you’ll notice an option that says ‘Brokers’. Click on this to get a dropdown list of brokers; click on the name of the broker you want to learn more about, and you’ll be redirected to the Finder review page. From there, you can select your area and you’ll be connected to a broker in your area to help you with your home loan.
As for joint tenancy arrangement, under this arrangement, the ownership of the property is split 50/50. If one joint tenant dies, their share of the property is automatically passed to the surviving joint tenant regardless of what their will says. Given your unique situation, it’s worth considering getting professional advice from a solicitor or conveyancer.
Cheers,
Sarah
Hi, I have a causal job and wounding to brow around 70,000 to 80,000 is there any that could help me,Regards Ellie
Hi Ellie,
Thanks for getting in touch.
Typically, it can be difficult to qualify for a home loan as a casual worker as most lenders view you as a high-risk borrower as you do not have a stable source of income. But do not worry, each lender will treat these types of applications on a case-by-case basis so it will depend on the lender’s eligibility criteria and the type of home loan that you’re applying for.
Keep in mind that the lender will review your income sources, assets, liabilities and debts (e.g. personal loans or credit cards) to determine your propensity to repay the loan.
To further help you, we have a guide that explains how banks treat bonus or irregular income which you might find useful. Generally, if you can prove to the lender that your income is paid regularly and if you provide them with a letter from your employer outlining the nature of your employment, then the lender may view your application more favourably.
I suggest that you enquire with a mortgage broker who will help you understand your borrowing options. However, you may want to consider approaching specialist lenders as they may have more lenient eligibility criteria.
All the best,
Belinda