Life changes, and your income changes with it. A baby, a career move or a switch to part-time work can all make your home loan feel different. It can also make refinancing harder, because the new lender assesses your income as it is now.
Here's how lenders treat common changes and how to give yourself the best chance.
Parental leave
Lenders differ a lot on parental leave. Common approaches:
- Using your return-to-work income if you provide a letter from your employer confirming your role, salary and return date, and you return within a set period (often 6 to 12 months).
- Requiring enough savings to cover the shortfall between your leave income and expenses until you return.
- Assessing only your current income, which can significantly reduce borrowing power.
If you're planning a family, it can be worth refinancing before leave starts, while your full income is on payslips.
Starting a new job
Most lenders accept a new job if:
- You're in the same industry or role type
- You're past probation, or the lender accepts probation for skilled roles
- It's permanent full-time or part-time
Some lenders will lend during probation if you've stayed in the same line of work. Others want three to six months in the role. Casual employment usually needs a longer history.
Going part-time
Lenders use your current part-time salary. If you've reduced hours, your borrowing power drops accordingly. If you're refinancing to a lower rate and not increasing your loan, some lenders take a more flexible view.
Becoming self-employed
This is the biggest change for lenders. Most want two years of tax returns as a self-employed person. Some accept one year, and low doc lenders may accept BAS statements or accountant letters with as little as six to twelve months of trading.
If you're about to leave employment to start a business, refinance first while you can show PAYG income.
Bonuses, overtime and commission
Lenders typically:
- Count regular overtime if it's been consistent, sometimes at 80% of the average
- Count bonuses and commission with a two-year history
- Shade or ignore income that's irregular
Why it matters more in 2026
New lenders test whether you can afford the loan at roughly 3% above the actual rate. With variable rates around 6.5%, that's close to 9.5%. A reduction in income combined with higher rates can make it difficult to pass.
If you can't pass a new lender's test
- Negotiate with your current lender. A rate reduction doesn't usually require a new assessment.
- Ask about a product switch to a cheaper product with the same lender.
- Look at lenders using a lower buffer for refinances. Some lenders apply different serviceability rules when you're refinancing like-for-like and not increasing the loan. A broker knows who does this.
Documents that help
- Employment contract or offer letter
- Employer letter confirming return date and salary (parental leave)
- Recent payslips, ideally showing year-to-date income
- Tax returns and notices of assessment (self-employed)
- Savings statements showing a buffer
Frequently asked questions
Can I refinance while on unpaid parental leave?
Possibly, with the right lender and documentation. It's easier with a confirmed return date and savings to cover the gap.
Do I need to tell my current lender my income changed?
Not for your existing loan, unless you're applying for something new. If you're struggling with repayments, talk to them early.
Is a contractor considered self-employed?
It depends. Some lenders treat contractors paid through an ABN as self-employed; others accept contractors with continuous work history as PAYG-equivalent.
Has your income changed? Call Finfident on 0424 545 654. We know which lenders are flexible on parental leave, new jobs and self-employment.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.