Are you ready to buy a home but have been knocked back by your bank because you are in casual employment?
Don’t worry!
In this post, we will share with you everything you need to know about getting a home loan with a casual job. The strategies in this article will work GREAT in 2024.
Let’s dive in…
Table of Contents
Casual home loan basics
Casual work comes in all different formats and variations. Some people have stable but irregular hours – others might work regular hours but might never have been offered a permanent role.
According to the ABS, 23% of workers in Australia are casually employed or about 2.7 million people. Many of these people work in the retail and hospitality industries, where it is quite normal to be in a casual job.
Unfortunately, the banks are filled with full-time workers, so they do not understand much about casual employment, and their lending policies also reflect this. Some banks will decline your home loan if you are casually employed because they think it is a much higher risk than giving a loan to a permanent employee. Of course, this is a joke!
According to the Government, “around 81 per cent of casual employees is expected to be with their current employer in 12 months compared with around 93 per cent of permanent employees”. So realistically, being in a casual job these days isn’t that much more of a risk than being a permanent employee.
Fortunately, we have a few lenders that understand home loans for casual employment and are fine with your job on a case-by-case basis.
We work with lenders that can give you a casual home loan if you are:
- Full-Time Casual. If you are considered a full-time casual and work the same regular hours each week, you only need to have been in your job for 3 months to qualify for a home loan.
- Part-Time Casual. If you are working irregular hours, or part-time casual, for example, 30 hours one week and 15 hours the next week, you need to have been in your job for at least 6 months to qualify for a home loan.
The banks have tightened their criteria for casual employment since COVID hit in 2020, so they require you to be in the role a little longer if you are working irregular hours.
Do you want to get your home loan approved? Give our home loan experts a call on 1300 088 065 or get in touch online, and we’ll call to chat about your options.
How to get a home loan approved with a casual job?
When you are a casual worker, you might have found it hard to get your home loan approved for many reasons, including:
- The banks might be concerned that you don’t receive holiday or sick leave pay.
- They might not be okay with how your part-time, casual income goes up and down each week.
- Many banks assume if your work were going to start firing people, you’d be the first to go because you are casual. This is clearly not the case!
If you have been denied a loan for any of the reasons mentioned above, don’t despair. At Hunter Galloway, we help lots of casual workers, including:
- Stable casual jobs with irregular hours
- Full-time casuals
- Part-time casuals
- Casual teachers
- Casual nurses
- People who work in several different casual roles
What deposit do casual workers need?
If you are in a casual job, you can buy a home with as little as a 10% deposit, and if you have been in your role for over 6 months, you might be able to get a higher loan amount.
If you are a first-home buyer, you can also qualify for the following:
- The $15,000 First Home Owners Grant
- The First Home Guarantee Scheme, which can allow you to buy with just a 5% deposit.
- Stamp Duty waivers and discounts if the property you want to buy meets certain criteria.
All of these schemes will enable you to buy a home with little deposit.
There are also some ways you can purchase a home with zero deposit!
Chat with a Mortgage Broker
To fully understand how much deposit you need as a casual employee and increase your chances of getting your home loan approved, you need an expert mortgage broker.
The majority of mortgage brokers in Australia are generalists, but we specialise in arranging home loans for people in casual jobs. We can quickly work out what lender will work with your situation, so call us on 1300 088 065 or get in touch online to speak with a casual home loan specialist.
How can a casual teacher qualify for a home loan?
Being employed casually as a teacher or teacher’s aide can be great! You have flexibility when it comes to school holidays and might get paid more than if you were employed permanently.
However, you might have found the banks are struggling to understand your income… Why?
- You might only work 40 weeks out of a 52-week year.
- You could work across a few different schools, but all your payslips are from Education Queensland or your state’s Education Department.
- The Year to Date (YTD) figure on your payslip might not show your real salary because of recent school holidays.
- You tried to apply for a home loan during school holidays when you were not receiving any pay, making it tough to prove your income.
We work with a few banks that will calculate your real income based on your PAYG Summary (also known as a group certificate) or your weekly income times 40 weeks.
How will a bank calculate my casual income?
Every bank has its own way of working out casual income to use on a home loan application. The two most common ways we have seen banks work out your income are:
- your last 2 years’ PAYG Summaries (group certificates),
- The Year To Date (YTD) gross income from your payslip. The YTD calculator method is used if you have only been in your job for a few months. You can use our Year-to-Date Calculator to work out your annual income.
In General, the banks will want to see at least one of the following to calculate your casual income:
- Three months’ salary income credits to your bank account
- One payslip showing more than three months Year to Date income
- One payslip showing less than three months Year to Date income and PAYG payment summary or tax return.
Letter from employer or employment agency with current employment/length of employment and break up of Year to Date income and PAYG payment summary or tax return.
Which bank is the best for casual jobs?
There are big banks, small banks and non-banks that all consider your home loan while you are working casually. However, knowing whether your home loan will be approved is hard without understanding your overall situation.
Some of the banks we work with will approve your home loan application if you have been working casually for under 3 months!
Fill out our free assessment form, or call us on 1300 088 065 to chat with one of our specialist mortgage brokers to know which banks will approve your home loan while you’re in a casual job.
Real-life case study of a casual worker
Here is a real-life case study of casual workers who qualify for a home loan:
In this example, they have been working in the same industry for over 4 years – this strengthens the application because it shows consistency. We could even look at using the most recent year’s gross income of $54,000 if required, and they would absolutely qualify for a home loan based on their situation.
In this situation, we suggest having all of your supporting documentation together when you speak with your mortgage broker. Include the following:
- 2 Most Recent Payslips
- Last 3 Years PAYG Summary (also known as Group Certificate)
- Last 3 Months’ Day to Day Transaction Account Statements (Where you are paid)
Help! I’m not quite sure what applies to my situation.
If you are looking to get a Home Loan while working casually, our team at Hunter Galloway can help. Our team here at Hunter Galloway helps home buyers navigate the home-buying process.
We make it simple to get through the home loan process, including how to complete your first home buyer’s grant application.
Our service does not cost you anything, as we are paid by the lender when your home loan settles.
Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please call us on 1300 088 065 or book a free assessment online to see how we can help.
More Resources for home buyers:
- First Home Buyers Guide from start to finish
- How to Buy a House (Step-By-Step Case Study)
- The Complete Guide to the First Home Super Saver Scheme
- How to save for a house deposit (fast)
- Build a House in Brisbane The Definitive Guide
Ready to take the next step toward buying? We’re happy to help. Schedule a call today with a Home Loan Expert from Hunter Galloway, the home of home buyers.
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