Single Parent Home Loans: What Lenders Count (and the 2% Deposit Option)

Yes, you can get a home loan as a single parent, and you may need as little as a 2% deposit to do it. The Australian Government’s 5% Deposit Scheme has a single parent option that lets an eligible single parent or legal guardian buy with a 2% deposit and no lenders mortgage insurance. Whether a lender will approve the loan comes down to something else: which parts of your income it will count, and how it treats the cost of raising your kids.

I’m David from Rebus Finance. If you’re raising children on your own, you’re already handling the planning, the budget and the school runs single-handed, and a home loan can feel like one more thing to carry alone. It’s also common to hear no from one bank and take that as the final word. It isn’t always. Lenders treat child support, Family Tax Benefit and other Centrelink payments very differently, so the same household can look quite different from one lender to the next. This guide covers what they count, what they don’t, and how to set yourself up before you apply.

The 2% Deposit Single Parent Option

The scheme used to be called the Family Home Guarantee. It now sits inside the Australian Government 5% Deposit Scheme, run by Housing Australia. The government guarantees part of your loan, so the lender doesn’t charge lenders mortgage insurance (LMI), even though your deposit is well under 20%.

Since 1 October 2025 there are no income caps and no limit on the number of places, so there’s no waiting list. Participating lenders summarise the single parent criteria like this:

• You’re a single parent or single legal guardian of at least one dependent child.
• You’re applying on your own. Joint applications aren’t allowed under the single parent option.
• You’re at least 18 and an Australian citizen or permanent resident.
• You have at least a 2% deposit that you’ve saved.
• You’ll live in the home. It must be an owner-occupied, principal and interest loan, not an investment.
• You don’t have to be a first home buyer. You can have owned property before, but you can’t hold any other property interest once the new home settles.

That last point matters for separated parents. If you owned a home with your former partner and it has since been sold or transferred, you can still use the single parent option.

There’s also a price cap. Newcastle and Lake Macquarie are a listed regional centre, so the cap here is $1.5 million, the same as Sydney. Buy further inland and the cap drops to $800,000. Both the purchase price and the lender’s valuation have to come in under the cap. We explain the caps in detail in our guide to the $1.5 million cap.

You can’t apply to Housing Australia directly. The application goes through a participating lender, and not every lender in my panel takes part, which is one more reason the choice of lender matters.

What a Lender Counts as Your Income

This is where single parent applications are won or lost. Two lenders can look at the same payslips and Centrelink statements and come up with very different borrowing amounts, because each has its own rules about which income it accepts and for how long.

The common thread is continuity. A lender wants to know the income will still be there in a few years. Parenting Payment Single, for example, generally depends on you being the principal carer of a child under 14. Family Tax Benefit Part B for single parents can run until the youngest child is 18, provided children aged 16 to 18 meet the study requirements. Lenders often stop counting these payments well before they actually end, and where that cut-off sits varies from one lender to the next.

So a parent whose youngest is 12 might find one lender ignores their Family Tax Benefit entirely while another counts all of it. On a single income, that difference can be enough to change the answer.

Child Support: Paperwork Beats Promises

If you receive child support, how it’s arranged matters as much as how much it is. Under Private Collect, the amount is still set by an assessment, agreement or court order, but you and the other parent manage the payments yourselves. Services Australia notes that it’s then up to you to keep records. A handshake deal with no assessment behind it is harder again.

Lenders generally prefer:

• A formal basis for the amount, such as a Services Australia assessment, a court order or a binding child support agreement, showing what’s payable and for how long.
• A clear payment history. Regular, on-time payments into your account over recent months, so the lender can see the money actually arrives.
• Payments that match the paperwork. If the order says $1,200 a month but $900 turns up irregularly, expect the lender to use the lower figure or none at all.

If you’re the parent who pays child support, it works the other way. Lenders treat it as an ongoing commitment that comes out of your borrowing power, and they may also count children you have in your care part of the time as dependants.

Why One Income Gets Tested Harder

Every lender has to check you can afford the loan, not just today but if rates rise. APRA expects lenders to test your repayments at least 3 percentage points above the loan rate. With the cash rate at 4.60% after the 29 September rise, that buffer bites harder than it did a year ago.

Lenders also estimate your living costs. Most compare what you tell them you spend with a benchmark, usually the Household Expenditure Measure (HEM), and use whichever is higher. The benchmark rises with each dependant, so a single parent with two kids is assessed as spending more than a single person on the same wage. Childcare fees, school fees and private health cover for the kids are added on top if you pay them.

Here’s how the numbers can look on a $750,000 home, a little under the median unit value across Newcastle and Lake Macquarie, using an illustrative 6.5% rate over 30 years:

The 2% deposit gets you in years sooner, but the bigger loan means about $850 a month more in repayments, and the lender has to be satisfied you can carry roughly $6,180 a month at the buffered rate. That’s why the income a lender will accept matters so much. Try our borrowing power calculator to see where you sit, then talk to me about which income a lender may or may not count.

Other Ways to Bridge the Gap

The 2% option isn’t the only route. Depending on your situation, these may help as well or instead. Our first home buyers page covers the wider picture if you’ve never owned before.

• A family guarantee. A parent or close relative uses equity in their home as extra security, which can cover the deposit and avoid LMI. It’s a big ask, so read who can be a guarantor and our comparison of a guarantor versus a government scheme first. You’ll also find more on our guarantor home loans page.
• NSW stamp duty relief. First home buyers in NSW pay no transfer duty on homes valued up to $800,000, and a reduced amount below $1 million, under the First Home Buyers Assistance Scheme. There’s a catch for separated parents: unlike the 2% deposit option, this concession is only for buyers who have never owned residential property in Australia. Our NSW first home buyer stamp duty guide has the detail.
• The First Home Super Saver Scheme. If you’ve never owned a home, voluntary super contributions can help build the deposit faster. See how the FHSS works.

Getting Ready to Apply: A Checklist

1. Get your child support on a formal footing. If it’s an informal arrangement, talk to Services Australia or a family lawyer about an assessment or agreement, then let a few months of regular payments build up.
2. Download a current Centrelink income statement. It shows exactly which payments you get and at what rate.
3. Write down your real living costs. Include childcare, school fees, sport, health insurance and phone plans. Lenders check your bank statements against what you declare.
4. Tidy up your credit. Close cards and buy now pay later accounts you don’t need, and avoid new credit applications. Our guide to Afterpay and your credit score explains why.
5. Keep your deposit in your own account, ideally building over a few months. It shows genuine saving, which some lenders want to see.
6. Finalise the property settlement if you’ve separated. Lenders generally want to see the settlement or consent orders, especially if you still hold an interest in a former home.
7. Get pre-approval before you house hunt. Under the scheme you have 90 days from pre-approval to sign a contract, so start looking once you’re ready to move.

Frequently Asked Questions

Talk It Through Before You Apply

A decline from one bank doesn’t mean you can’t buy. It often means that bank’s policy didn’t suit how your income is made up. With more than 30 lenders on my panel, I can usually find out which ones count your child support and Centrelink payments before you apply, so you don’t collect credit enquiries testing the waters.

Want to know what you could borrow as a single parent? Call David on 0417 676 191 or get in touch via our contact form.

This article is general information only and does not take into account your objectives, financial situation or needs. It is not a promise or indication that any application will be approved. Lender credit policies, rates and fees change regularly and are subject to each lender’s assessment. Government scheme eligibility is assessed by participating lenders and Housing Australia. Please seek advice specific to your circumstances before acting.

Sources

• Australian Government, Australian Government 5% Deposit Scheme, accessed 27 October 2026.
• Commonwealth Bank (participating lender), What is the Australian Government 5% Deposit Scheme?, accessed 27 October 2026.
• Services Australia, Who can get Parenting Payment, accessed 27 October 2026.
• Services Australia, FTB Part B eligibility, accessed 27 October 2026.
• Services Australia, Private Collect, accessed 27 October 2026.
• Revenue NSW, First Home Buyers Assistance Scheme, accessed 27 October 2026.
• APRA, APRA maintains current macroprudential policy settings, 28 May 2026.
• Reserve Bank of Australia, Monetary Policy Decision, 29 September 2026.