- Just because you have a low income, doesn't mean you can't qualify for a home loan.
- Home loan approval typically depends on your borrowing power and the size of the mortgage you're hoping to take out.
- Government support exists for those struggling to get a foothold in the property market, like people with lower incomes.
Mortgage lenders consider a homebuyer's finances wholistically, and there's not a written rule saying 'reject people who earn less than $XX,XXX per year'. Home loan approval generally hinges on various factors, including:
- Income
- Living expenses
- Existing debts
- Loan size and interest buffer
Ultimately, whether you're approved for a home loan will likely depend on your borrowing power and the size of the mortgage you're hoping to take out.
- Take note: Your income is just one piece of the puzzle.
How to get a mortgage on a low income
That said, a lower income may encourage a lender to take a closer look at your application, and perhaps go through it with a fine-toothed comb. That means any hiccups in your financial history or paperwork can be magnified.
Here are the main aspects a lender will want to see when assessing your mortgage application:
Proof you can repay the loan
Your ability to 'service' (or repay) your mortgage is the most important factor a lender considers in deciding whether or not to accept your home loan application.
See also: Home Loans 101
A standard home loan assessment compares your expected repayments with your disposable income and your current expenses. If the lender thinks you can't comfortably meet repayments, you'll likely be knocked back.
It will also compare the outgoings you report against the Household Expenditure Measure (HEM). The HEM is a benchmark estimating typical living costs for a household like yours.
Here are ways that can help improve your chances of getting your home loan application accepted:
Apply for a low-rate home loan
A lower interest rate means lower monthly repayments, and lower monthly repayments generally means greater borrowing power.
In the market for a low-rate home loan? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
6.39% p.a. | 6.42% p.a. | $3,124 | Principal & Interest | Variable | $0 | $845 | 90% | |||||||||||||
6.79% p.a. | 7.16% p.a. | $3,256 | Principal & Interest | Variable | $0 | $450 | 90% | Disclosure | ||||||||||||
7.09% p.a. | 7.09% p.a. | $3,357 | Principal & Interest | Variable | $0 | $160 | 90% | Disclosure |
Clean up your non-essential spending
Cut back on Uber Eats, pause online shopping, and close your Afterpay account if possible.
Demonstrate strong savings habits
Having both a sizable savings account balance and regular transfers to a savings account shows the bank that you'll have something to fall back on in bad months and that you're good with money.
See also: 60 ways to save money
Declare everything
Don't hide liabilities or existing debts. The bank will almost certainly uncover them, and not declaring them can damage your application.
Your credit history
Having a good credit score can increase your chances of getting approved for a home loan, as it demonstrates your financial dependability.
Here's a few things that could help improve your credit score before applying for a home loan:
- Make all credit card and mortgage repayments consistently on time
- Don't apply for new credit cards, personal loans, or other debt facilities
- Request a copy of your credit report and check it for any errors
Check your credit score using Savings.com.au’s Credit Score Calculator
The property you want to buy
There are two ways in which the property you're eyeing could impact your suitability for a home loan: its price and your lender's risk tolerance surrounding it. Let's start with the former.
Price considerations
Combined capital city median house prices sit close to $1 million. However, there are plenty of cheaper areas and dwelling types out there.
If the city you live in is out of reach, you might consider a regional area or a suburb beyond the city fringe. If relocating isn't possible or desirable, an apartment, townhouse, or duplex may be a more affordable entry point.
Units can be a practical stepping stone for first home buyers, and you can always rentvest if you prefer to stay in your current suburb.
See also: What is rentvesting
Lender risk tolerance
The other way your ideal property might impact your suitability as a home loan applicant comes down to your lender's internal protocols.
Some lenders limit how much they'll provide a buyer purchasing a small apartment, acreage property, or a home in a high-risk area (such as a flood zone or mining town, where values are often subject to boom-bust cycles).
Other lenders only provide home loans to those buying in capital cities or regional centers, while others restrict their lending to the state or area in which they operate.
If your ideal property falls outside a lender's comfort zone, it might require a larger deposit or charge a higher interest rate. Both can reduce your borrowing power and affect your chances of approval.
Savings.com.au's two cents
Don't give up on your dream of owning a home just because you are on a low income. The home buying process is multi-faceted, and many different paths exist for you to take.
You may consider looking beyond the areas within capital cities (there's great value to be found elsewhere), clean up your credit score, start a savings regime and stick to it, check whether you’re eligible for any government support programs, see if you can use a guarantor, and do a thorough comparison of loan providers.
Remember, whether you’re on a low income or not, be completely honest and transparent. A lender won't look favourably on you if it uncovers untruths, or even half-truths.
What's considered 'low income' in Australia?
In Australia, a 'low income household' is one with an income in the 3rd to 20th percentile of disposable household income. This means the lowest earning fifth of all households, excluding the bottom two percentiles.
The latest data related to this measure comes from the Survey of Income and Housing 2019-20, which, to date, has not yet been updated post-COVID.
It found the mean adjusted incomes of low, middle, and high income households were as follows:
Low income | Middle income | High income | |
Median weekly income | $456 | $966 | $2,234 |
Annual equivalent | $23,712 | $50,232 | $116,168 |
Source: ABS SIH
Earnings have changed substantially in the five years since 2019-20. To get a more updated, albeit vastly different image, we can compare a median full-time wage with the minimum wage and the JobSeeker Payment, offered to those looking for work.
The average full time adult employee earned around $2,010 per week pre-tax in May 2025. This is equivalent to nearly $105,000 a year, according to ABS figures.
That's compared to the minimum wage of $24.95 an hour as of July 2025, equaling nearly $950 per 38-hour work week, or $49,000 a year.
Meanwhile, the JobSeeker Payment (as of March 2026) is around $809 per fortnight, or a little over $21,000 a year, for single adults with no children.
How to improve your borrowing power as a low-income earner
I see borrowers every week who are not truly low earners, but look weak on paper because of HECS, credit card limits, BNPL, car loans, high living expense declarations, or in the self-employed world, tax returns that have been minimised so hard they kill serviceability.
The eye-opening part is this: for many buyers, the fastest way to improve borrowing power is not earning an extra $20,000, it’s cleaning up the shape of the file. Cancel unused card limits, get rid of short-term consumer debt, show clean account conduct, build a strong rent/savings history, and avoid making your income look artificially thin right before you apply.
A lot of people think the game is ‘save a bigger deposit’. Often the real game is ‘become easier for a lender to say yes to’.
Government support and grants for low-income earners
Federal and state governments provide support to help eligible low- and moderate-income earners get their foot onto the property ladder.
5% Deposit Scheme
The Australian Government 5% Deposit scheme allows eligible first home buyers to purchase a home with just a 5% deposit, while single parents or guardians can buy with just a 2% deposit, without paying lenders mortgage insurance (LMI).
The scheme was expanded in 2025 and currently offers unlimited places, no income caps, and higher property price caps.
Under this scheme, the federal government acts as guarantor for part of a homebuyer's home loan, removing the risk small deposits pose to lenders. That said, buyers still need to satisfy standard home loan eligibility.
See also: Home loan application tips
Help to Buy Scheme
Help to Buy is a shared equity scheme aimed at giving eligible buyers the option to purchase with as little as a 2% deposit, with the federal government contributing up to 30% of the purchase price for existing homes and up to 40% for new homes in exchange for an ownership stake.
Legislation allowing the scheme passed in late 2024 and applications opened in December 2025. Because the government holds part of the property, there will be continuous obligations on borrowers. Income and property price caps apply.
First Home Owner Grant (FHOG)
First home buyers can get help from state governments in saving for their deposit in the form of a First Home Owner Grant (FHOG).
First home buyers may be able to access a cash grant, depending on where they're purchasing and whether they're buying an established home or building a new one.
See below a complete explainer for the First Home Owner Grant in each state in Australia:
- New South Wales First Home Owner Grant
- Victoria First Home Owner Grant
- Queensland First Home Owner Grant
- South Australia First Home Owner Grant
- Western Australia First Home Owner Grant
- Tasmania First Home Owner Grant
- Northern Territory First Home Owner Grant
State government housing loans
A handful of states offer their own pathways for buyers who don't have large deposits or who struggle to get traditional bank finance.
QLD: Housing Finance Loan and Boost to Buy
Queensland offers two major supports. The long-running Housing Finance Loan lets eligible buyers purchase with as little as a 2% deposit and no LMI. Queensland has also introduced Boost to Buy, a shared equity scheme where the government can contribute up to 25% or 30% of the property price, allowing buyers to get in the door with just a 2% deposit.
WA: Keystart
Western Australia's Keystart program allows eligible buyers to get into the market with a 2% deposit and no LMI. Keystart also offers shared ownership options, where the state takes an equity share of the home so you can borrow less. The main trade-off is that Keystart interest rates tend to be higher than standard home loan rates.
SA: HomeStart Finance
South Australia's HomeStart Finance offers a range of low-deposit, no-LMI loans aimed at people who can afford repayments but lack a big deposit. Buyers can get in with as little as 2-3% depending on the product. HomeStart also uses a unique 'repayment safeguard' that helps keep repayments stable even when rates move.
TAS: MyHome
Tasmania's MyHome shared equity program helps eligible buyers enter the market with a minimum 2% deposit, while the government (via Homes Tasmania) takes an equity share of up to 40% or $300,000 (whichever is greater) for new homes or 30% or $150,000 for existing homes.
NT: HomeBuild Access
The Northern Territory Government offers a program named HomeBuild Access that allows buyers of new homes or land-and-build packages to access low-deposit home loan options under a subsidised interest rate arrangement. Property price caps apply.
- Quick tip: Availability and price caps may change, so always check the state websites for the latest updates.
Tips on how to buy a house with a low income
Here are some other strategies you could employ to fast track your way to owning a home.
Buy with a smaller deposit
It's generally recommended to build up a deposit of at least 20%, as doing so means you can avoid paying LMI.
Having a smaller deposit means you may have to pay thousands of dollars in LMI and may end up with a higher interest rate, so why on Earth would this be a good thing? Well, there are a couple of reasons why you might consider biting the bullet with less than 20% deposit.
- Saving up for a 20% deposit takes time, and in that time the cost of property could increase by more than the cost of LMI.
- In the time it takes you to save up the full 20% deposit, you might miss out a house you've always dreamed of buying.
Importantly, before taking this route, make sure the savings and benefits of paying LMI outweigh the cost of the insurance itself and any potential higher interest rate a high loan-to-value ratio (LVR) may attract.
Use a guarantor
It's possible to get a home loan with a small, or even non-existent, deposit and avoid paying LMI if you apply for a home loan with a guarantor.
A guarantor is someone (often a parent) who agrees to take responsibility for repaying your home loan if you fail to do so yourself. Guarantors typically use their own property as a security for the loan, which obviously represents a big risk for them.
Not everyone has this option available to them, but they're a popular option for those who do, especially if they have low incomes or are first home buyers.
Consider non-bank lenders
Non-bank lenders operate similarly to banks, but banks are regulated by APRA and must assess borrowers using a serviceability buffer.
Currently, banks must test whether you could still repay your home loan if interest rates were to rise by at least 3 percentage points. For example, if you’re applying for a loan with a 6% p.a. interest rate, you’ll need to show you could afford repayments at around 9% p.a.
Non‑bank lenders aren’t regulated by APRA and may use different serviceability models, which can sometimes result in a higher assessed borrowing power.
Additional costs of home ownership
It's crucial you factor in these other costs besides just the deposit and loan repayments:
- Stamp duty
- Transfer and registration fees
- Home loan fees
- Property valuation and conveyancing fees
- Building and pest inspection fees, removalist fees, and other incidentals
Frequently Asked Questions
Yes, in some cases. It may be possible to buy a home on a low income and without a cash deposit by using a guarantor or certain government support schemes. Even then, you’ll still need to show evidence of genuine savings and meet serviceability and credit requirements. You may also face higher interest rates and stricter lending requirements.
Sometimes. Certain ongoing, regular benefits (such as Family Tax Benefit or some pensions) may be counted, either fully or partially. Short‑term or conditional payments (like JobSeeker) are usually treated cautiously or excluded altogether.
Part‑time income can be accepted if it’s stable, ongoing, and well‑documented. Lenders typically want to see at least 6-12 months of consistent employment. If your hours vary each week, lenders may assess your income by averaging it over a set period.
There’s no official minimum income, but practical limits apply. After tax and minimum living expenses, you must still be able to service the loan under a higher 'stress‑tested' interest rate. Single applicants on lower incomes facing borrowing constraints may consider a joint application or using a guarantor.