Getting a Home Loan While on Maternity Leave

A maternity leave home loan is assessed on one of two incomes: the pay your client receives during leave, or the salary they’ll earn once they return to work. When the lender uses the return-to-work salary, your client’s savings must also cover any shortfall in their commitments until that salary starts.

The employer’s return-to-work letter usually decides the application. It sets the salary the lender counts and the date that ends the gap your client’s savings must cover. Lenders publish different rules for the letter, the income and the savings, so the same client can fit one lender and fall short at another.

Income During Leave

Income during leave comes from three places, and lenders treat each one differently. Employer payments and government Parental Leave Pay can count as income while they last. Unpaid leave counts as no income, so the lender looks to the return-to-work salary and the client’s savings instead.

Employer-Paid Parental Leave

Employer-paid parental leave is salary the employer keeps paying during leave, at full pay or a reduced rate such as half pay. It shows on payslips, which makes it easy to verify. The question is how long it lasts.

Macquarie’s 10 September 2026 residential credit guidelines count parental leave income at 100%, whether the employer or the government pays it. The client must show the income will keep being paid until they return to work. A letter confirming the return date must be no more than 60 days old when you submit the application.

Government Parental Leave Pay

Parental Leave Pay is the Australian Government payment made under the Paid Parental Leave scheme. Services Australia sets it at the national minimum wage, which is $200.94 a day or $1,004.70 for a five-day week before tax from 1 July 2026. Parental Leave Pay is taxable, and the employer often delivers it with the client’s pay.

A family can get up to 130 days, or 26 weeks, for a child born or adopted from 1 July 2026. That limit decides how Macquarie can use it. When a client plans 12 months of leave, Parental Leave Pay ends months before the return date, so it fails Macquarie’s test that leave income continues until the client returns.

MyState’s lending procedure, effective 1 July 2026, asks the employer to set out each payment and its time frame during leave. Its examples include six weeks at half pay followed by 18 weeks of government Parental Leave Pay. That breakdown shows the lender when each payment stops.

Unpaid Leave

Unpaid leave is the part of the leave with no pay at all, such as the months after paid leave and Parental Leave Pay run out. The lender can’t count any income for those months. The application then rests on the return-to-work salary and the savings that cover the unpaid months.

A past period of leave can also lower the income on recent payslips. Macquarie’s guidelines allow for this when a client confirms an earlier period of parental leave caused a low year-to-date payslip figure or prior-year income. The new dependant still goes into servicing.

Return to Work

The return to work is proved by a letter from the employer that confirms the return date, the hours and the pay rate. Lenders that accept return-to-work income use it to count the salary the client will earn, not the leave pay they receive now. Westpac’s broker policy page, as at October 2026, says return-to-work income can be considered in a client’s borrowing power assessment.

Return Date

Check the return date against the lender’s rules before you count the salary. Macquarie’s 10 September 2026 guidelines accept return-to-work income when the client provides an employment letter confirming the resume date and pay rate. The client also needs savings to cover the leave period, which the next section works through.

Macquarie counts only one income in servicing, the lender’s test of whether the client can afford the repayments. You can use the leave pay or the return-to-work salary, but not both.

Hours and Pay Rate

A client who returns part-time earns less, so the hours in the letter can lower the income. MyState’s 1 July 2026 procedure counts 100% of the salary paid on return. That salary reflects any reduction in hours.

MyState’s examples include part-time work at 60% of the previous full-time salary and 30 hours a week at a stated hourly rate. A client who earned $95,000 full-time and returns at three days a week has a return salary of $57,000. That’s the figure the lender services, not the pre-leave salary.

Employer Confirmation

Get the return details in writing from the employer, not from the client’s own statement. MyState requires a clear intention to return to the same employer, confirmed in writing. The employer’s letter must give the date leave started or will start, the return date, the payments during leave and the employment conditions on return.

The employer’s confirmation also supports the broker’s own inquiries. ASIC’s Regulatory Guide 209 tells lenders and brokers to consider reasonably foreseeable changes, such as known or planned events. Its Example 38 describes a partner returning from maternity leave whose scheduled return her employer verifies.

A client who plans to return to a different employer has a weaker case. MyState’s procedure expects a return to the same employer, and a new role can bring its own probation period rules.

Cover the Gap

The gap is the period between the application and the first full pay after the client returns to work. Your client needs savings that cover the difference between their income and their commitments for each month of that period. Lenders measure this differently, so set out the timeline month by month.

What the Savings Must Cover

Macquarie’s 10 September 2026 guidelines ask for enough savings to meet the shortfall on all commitments and declared living expenses for the parental leave period. That includes the future cost of childcare once the client returns to work. For a refinance, Macquarie counts savings in the offset account or redraw of the loan being refinanced.

MyState’s 1 July 2026 procedure asks for a servicing calculation for each period of the leave, using that period’s income and expenses. Savings must be held to cover the monthly shortfall in each period. The client provides proof of the savings and a statutory declaration confirming they understand they may need to use them.

BankVic’s July 2026 underwriting guidelines list maternity and paternity leave as a future change that servicing must account for. Once the client discloses the leave, BankVic expects the assessment to allow for its effect on their ability to repay.

Count only the savings your client holds now. A surplus they expect to put aside during the paid months isn’t money the lender can see. For a purchase, the leave buffer must also sit on top of the cash needed to settle.

Worked Example: A Leave Timeline

This fictional example follows a couple buying a home. Mia started 12 months of parental leave in September 2026 after her baby was born, and her partner Tom works full-time. You submit their application in October 2026, five weeks into Mia’s leave.

Mia’s employer letter, dated 1 October 2026, sets out her leave and return. It’s 14 days old when you submit on 15 October, inside Macquarie’s 60-day limit.

• Weeks 1 to 16: full pay from her employer.
• Weeks 17 to 38: government Parental Leave Pay of $1,004.70 a week before tax. That’s 110 days, because 20 of the family’s 130 days are reserved for Tom.
• Weeks 39 to 51: unpaid leave, which is 13 weeks or three months.
• Week 52: back to the same employer at three days a week, on $57,000 a year.

The household’s assessed monthly commitments are $8,200. They’re made up of an assessed loan repayment of $4,300 at the lender’s assessment rate, declared living expenses of $3,500 and a $400 car loan repayment. The income figures below are assumed amounts after tax.

Period	Mia’s income	Tom’s income	Household income	Commitments	Monthly surplus or shortfall
Employer full pay	$6,100	$6,000	$12,100	$8,200	$3,900 surplus
Parental Leave Pay	$3,800	$6,000	$9,800	$8,200	$1,600 surplus
Unpaid leave	$0	$6,000	$6,000	$8,200	$2,200 shortfall
After return, with $1,400 childcare	$4,000	$6,000	$10,000	$9,600	$400 surplus

The unpaid months leave a shortfall of $2,200 a month for three months, or $6,600. Mia and Tom hold $9,000 in savings beyond the cash they need to settle. That covers the $6,600 with $2,400 to spare.

On return, the lender services Mia’s $57,000 salary instead of her Parental Leave Pay. Childcare raises their commitments to $9,600 a month. The lender’s own servicing calculator, with its buffers and expense measures, sets the final figure.

If Mia’s letter gave no return date, Macquarie couldn’t count her return-to-work salary. The application would then rest on Tom’s income alone, which falls $2,200 short of their commitments each month. A move to a new employer is a point to confirm with the lender in writing before you lodge.

Compare Lender Treatment

Compare lenders using the same leave and return facts for every lender. Those facts are the leave dates, each payment with its end date, the return date, hours and pay rate, plus the savings held. Then check where each lender’s published rule leaves a point that needs its written confirmation.

Lender	Leave income	Return-to-work income	Savings for the gap	Employer evidence
Macquarie (guidelines updated 10 September 2026)	100% of employer or government leave pay, if it continues until the return	Accepted with a savings buffer and an employment letter. Only one of the two incomes counts	Cover the shortfall on all commitments and living expenses for the leave period, including future childcare	Return-date letter no more than 60 days old at submission, with resume date and pay rate
MyState (procedure effective 1 July 2026)	Shown as a breakdown of payments and time frames	100% of the salary on return, including reduced hours, with the same employer	Held for each period’s shortfall, with proof and a statutory declaration	Leave start, return date, payments during leave and conditions on return
BankVic (guidelines July 2026)	Leave treated as a future change servicing must consider	Covered by the general future-change rule	Servicing must allow for the leave’s effect on repayments	Disclosure of the leave on enquiry

For a Westpac maternity leave home loan, Westpac’s broker policy page, as at October 2026, says return-to-work income can be considered in borrowing power.

The page also lists options for existing customers going on parental leave. They include switching to interest only for the leave period, reducing repayments by up to 50%, or pausing or reducing repayments by drawing on excess payments. Interest accrues on the loan when payments are paused or reduced.

Rules for leave pay, return income and savings buffers differ by lender, so compare them across the panel before you choose. Bulma’s Policy Advisor puts one parental leave question to 52+ lenders and returns a side-by-side table with each lender’s quoted policy wording. Its coverage note names the lenders whose policy doesn’t address the point.

Points That Need Written Confirmation

Get the lender’s written confirmation before you lodge when your client’s facts sit outside the published rule.

1. The client returns to a different employer or role. MyState expects a return to the same employer, so ask any other lender how it treats the new role.
2. The employer hasn’t yet confirmed the return date, hours or pay rate in writing.
3. The return has staged hours, such as three days a week for six months and then full-time. Confirm which stage’s salary the lender services.
4. The client hasn’t started leave yet and the baby isn’t born, so the timeline is still a plan.
5. The savings for the gap sit somewhere other than the client’s own account, offset or redraw.

A client with a confirmed return to the same employer and savings that cover the unpaid months fits the published rules at Macquarie and MyState. Start with the lender whose rules match those facts, and attach the employer letter and the month-by-month timeline to the application. When a fact needs confirmation, settle it with the lender before you lodge.