Kathryn Lee - 2 Dec, 2019

Can I save for a home loan with a single income?

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Owning your own home is a rite of passage for many Australians, but it can be a hard feat to reach – especially with only one income. While it’s undeniably easier for working couples to save for a house – given their combined living expenses are often lower – those saving for a house on a single income are by no means out of the game.

Whether you’re a single mum, dad, the sole breadwinner, or you’ve just given up on dating, here’s everything you need to know about how to seek a home loan approval with a single income.

What am I up against?

With only one income coming in, those saving for a home loan with a single income are already behind the pack. To top it off, with an annual income that’s likely less than their two – income counterparts, single income seekers will need to settle for smaller loan amounts, vastly diminishing property options.

But luckily, all is not lost. Acquiring a home loan on a single income may be more challenging, but it’s not impossible – especially with these money – saving – tips.

Home loan tips for single income households

Be smart with money

Reckless spending on festivals and nights out will not earn you any favours with your lender. When on a single income, lenders are likely to be more scrupulous, so it’s important to be able to show evidence that you’re responsible with money.

This means having demonstrated evidence of the ability to save over a long period of time, as well as ‘clean’ expenses – e.g. nothing irresponsible. A good tip is to have at least a 6 – month history of demonstrated savings. This will help prove your ability to meet monthly repayments – that is, without shaking the piggy bank.


When it comes to being responsible with money, budgeting is king. A budget will help ensure you stay on track to meet your financial goals, and it can also help with any financial surprises that come your way.

Budgeting means tracking your monthly expenses. At its core, it involves making a list of all your monthly expenses and dividing your income between them, while also considering savings goals. Think about it like dividing your money into separate boxes. If you find you are spending too much, cut down on anything unnecessary to help boost your savings. If you feels stuck, the ASIC Smart Money budget planner can help you get started.

First home owners grant

If this is your first home, don’t forget that you may be eligible for government grants, such as the First Home Owners Grant or the January 2020 First Home Loan deposit scheme.

These grants can go a long way towards helping you meet the financial means necessary to afford your dream home. To find out what you’re eligible for, be sure to check the specifications for your area. The First Home Owners Grant is administrated separately by all the states and territories, so the exact specifications differ across the country. Likewise, the First Home Loan deposit scheme is dependant on the region you intend to buy in, to account for the diversity of the Australian property market.

Find a guarantor

When on a single income, it’s likely to take a lot longer to save up for your dream home than for two income households. To top it off, most lenders require at least a 20% deposit to avoid lenders mortgage insurance (LMI).

In June this year, the median house price in Sydney was $875,000, which equates to a $175,000 deposit. Even in Adelaide, where the median house price was $470,000, home seekers would still require a $94,000 deposit to avoid LMI.

If it’s going to take too long to reach the magic twenty, consider finding a guarantor to sign on to the loan. With a guarantor, many home seekers are able to secure a loan without the full deposit, all while avoiding LMI.

Words by Kathryn Lee

Saving for a home loan on a single income? While it might be harder, all is not lost. Contact eChoice, and we’ll put you in touch with one of our brokers who will be able to guide you through the options available.

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