Preparing financially
Buying while on or planning parental leave
Three separate questions — what a lender will approve, what your household can manage during leave, and how timing affects both — plus current Parental Leave Pay rates.
- Lender approval and your household's ability to manage repayments during leave are two different tests — run both separately.
- Lender treatment of parental leave income varies: some assess income at application time, others may consider a documented return-to-work plan. Ask your lender directly.
- From 1 July 2026, government Parental Leave Pay is 130 days (26 weeks) at $200.94 a day before tax — a separate, means-tested payment from any employer-paid leave.
Three separate questions, not one
Buying around parental leave gets confusing because people try to answer "can we afford it?" as a single question. It's really three: what will a lender approve, what can your household actually manage day-to-day during leave, and how does the timing of your application interact with both. Keep them separate and the decision gets much clearer.
| Stage | What it's really asking | What to do |
|---|---|---|
| Before leave | Should we apply now, while income is at its usual level, or wait? | Get pre-approval terms and expiry in writing; check the expiry window against your expected leave and purchase dates (see the pre-approval guide) |
| During leave | What income will the lender actually use if we apply or settle now? | Ask the lender directly — don't assume; get their answer in writing where possible |
| After leave | Can our household absorb the reduced-income period on the repayments we'll be committed to? | Budget the leave period itself using your actual reduced income, separately from what the lender approved |
Lender approval and household budget are different tests
A lender approving your loan is not the same as your household being comfortable making repayments during a lower-income period. Lenders assess whether you meet their serviceability rules at a point in time; they don't necessarily model month-by-month what leave will feel like for your household budget. Run both tests separately: the lender's approval, and your own calculation of income and outgoings during the actual leave period, including any employer parental leave pay, government Parental Leave Pay, and savings you plan to draw down. It's unlawful for a lender to discriminate against you because of pregnancy, potential pregnancy or family responsibilities (Australian Government (Federal Register of Legislation), verified 4 Aug 2026) — if you believe that's happened, see how to complain about a lender, broker or insurer for how to raise it.
How lenders treat parental leave income
Treatment varies by lender and there is no single rule that applies across the market. Some lenders assess based on your income at the time of application, which may be reduced or nil during leave. Others may consider a documented return-to-work plan — for example a letter from your employer confirming your position, hours and expected return date — alongside your pre-leave income. A lender may also ask about the other partner's income if you're applying jointly, and how ongoing costs like childcare are expected to be funded. Ask your own lender or broker directly how they handle this rather than assuming either approach.
Government Parental Leave Pay
Parental Leave Pay is a separate, means-tested government payment from any employer-paid parental leave. For children born or adopted from 1 July 2026, the entitlement is 130 days (26 weeks based on a 5-day week), paid at $200.94 a day before tax ($1,004.70 for a 5-day week) — a total of $26,127.40 before tax for the full entitlement. Eligibility depends on an income test and work test; check your own eligibility and current rates on the Services Australia website, since rates are indexed and can change. Some lenders count this payment as income for serviceability purposes and some don't — ask directly rather than assuming either way.
Evidence a lender may ask for
What a lender actually requests varies, but commonly includes some combination of: a letter from your employer confirming your leave dates, entitlements and expected return-to-work date and hours; recent payslips showing pre-leave income; evidence of any employer-paid parental leave and its duration; evidence of Parental Leave Pay if you're receiving it; and a written household budget for the leave period. Treat this as illustrative, not a checklist every lender will use — confirm the specific list with your own lender or broker.
Practical checklist
Before applying around parental leave
- Disclose any planned leave to your lender or broker early in the process
- Ask specifically how the lender assesses income during and after leave, in writing if possible
- Check your pre-approval's expiry against your expected leave and purchase timeline
- Budget the leave period separately using your actual reduced income, not the amount the lender approved
- Check your current Parental Leave Pay eligibility and rate on Services Australia
Questions for a professional
- How will you assess my application if my income is reduced during leave?
- Would a documented return-to-work plan change your assessment?
- Do you count government Parental Leave Pay as income for this loan?
Official resources
Sources and methodology
- Sex Discrimination Act 1984 (Cth) — Australian Government (Federal Register of Legislation) (retrieved 4 Aug 2026)
Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.