18 Nov 2024 Home Loans for Single Parents in Melbourne: Government Support & Low Deposit Options

Melbourne’s property market remains competitive, driven by consistent population growth and a strong local economy. For single parents, the challenge of balancing household expenses on one income often makes home ownership feel out of reach. Home loans for single parents offer critical support in bridging that gap, especially when combined with government initiatives and lender flexibility. These tailored loan options can open doors for those who might otherwise be excluded from the property market.

That’s where mortgage brokers at EverLend step in. With deep knowledge of Melbourne’s loan market, EverLend helps single parents access the most suitable lenders, maximise available support, and simplify the home loan process. Working with a broker means saving time, improving your loan choices, and getting expert help every step of the way.

Let’s explore what’s available for single parents looking to buy a home in Melbourne.

Key Takeaways

• Single parents in Melbourne can access home loans with as little as a 2% deposit through government-backed schemes.

• The Family Home Guarantee and First Home Guarantee are major supports, removing the need for Lenders Mortgage Insurance.

• Victoria also offers a $10,000 First Home Owner Grant for eligible buyers purchasing new homes.

• Shared equity programs, like Victoria’s Homebuyer Fund, can reduce upfront costs for eligible single parents.

• EverLend mortgage brokers offer expert guidance, personalised loan solutions, and access to over 40 lenders.

• Working with a broker increases your chances of finding the most suitable loan and reduces stress in the process.

Government Assistance for Single Parent Home Buyers

Single parents may be eligible for government schemes aimed at helping low and moderate-income Australians buy their first home. Here’s what you need to know:

First Home Guarantee (FHBG)

Previously known as the First Home Loan Deposit Scheme, this program allows eligible single parents to purchase a home with as little as 2% deposit, without paying Lenders Mortgage Insurance (LMI). The government guarantees the remaining 18%.

• You must be an Australian citizen or permanent resident.

• The income cap for single applicants is $125,000 per year.

• The property price cap in Melbourne is $800,000.

Family Home Guarantee

Exclusively for single parents with at least one dependent, this initiative also requires just a 2% deposit and provides government backing for the loan. It’s not limited to first-home buyers — existing homeowners may also qualify.

First Home Owner Grant (FHOG) in Victoria

While the grant mainly applies to newly built homes, it offers $10,000 to eligible first-home buyers in Victoria. It can help cover upfront costs like stamp duty or part of the deposit.

These programs significantly lower the barrier to entry for single parents. However, understanding how to qualify and apply can be complex — and that’s where working with a Melbourne mortgage broker like EverLend becomes invaluable.

Low Deposit Home Loan Options for Single Parents

Lenders in Melbourne offer several low deposit home loan options, especially for those accessing government-backed programs. Here’s how single parents can take advantage:

• 2% Deposit with FHBG or Family Home Guarantee: As mentioned, this allows you to avoid the standard 20% deposit requirement.
• 5-10% Deposit Loans: Some lenders accept lower deposits outside government programs, though these often require LMI, which adds to the cost of your loan.
• Guarantor Loans: If a family member is willing to act as guarantor, you may be able to borrow up to 100% of the property price. This reduces the deposit required and avoids LMI.
• Help to Buy Scheme: This scheme is the latest federal initiative offering shared equity support. Under this scheme, the government contributes up to 40% of the purchase price for new homes (30% for existing homes). This reduces the size of your home loan, the deposit needed, and ongoing repayments.

Each loan option has its own eligibility criteria and long-term implications, so it’s vital to compare your choices carefully. EverLend can guide you through lender requirements and find the most suitable match for your financial situation.

We help single parents in Melbourne cut through the noise. From loan eligibility checks to final approval, EverLend makes the home loan process easier. Speak with our Melbourne brokers today at 03 7036 3356 or visit www.everlend.com.au.

Choosing the Right Lender and Loan Product

Not all lenders offer the same terms or support for single-parent borrowers. Here’s what to keep in mind:

• Compare Interest Rates and Fees: Use comparison rates to evaluate true loan costs, not just headline rates.

• Check for Family-Friendly Loan Features: Offset accounts, flexible repayments, and repayment holidays can make managing your mortgage easier.

• Avoid Lenders with Strict Criteria: Some banks are more conservative with single-income applications. A broker can help you avoid these and find lenders with more inclusive policies.

• Work With a Specialist Broker: EverLend has access to over 40 lenders, including banks and non-bank lenders who understand the challenges single parents face.

Choosing the right lender goes beyond interest rates; it’s about finding one that understands your unique situation.

Struggling to find the right home loan as a single parent? Our expert Melbourne mortgage brokers help you access low deposit options and choose the right loan. Call 03 7036 3356 or visit www.everlend.com.au to get a personalised loan strategy tailored to your needs.

Tips to Improve Home Loan Eligibility as a Single Parent

Securing home loans for single parents in Melbourne requires demonstrating financial stability. These practical steps can strengthen your application:

• Maintain a Clean Credit Record: Pay off debts on time and avoid multiple credit inquiries.

• Show Stable Income: Even part-time or casual income may be considered if it’s consistent. Providing payslips, Centrelink payments, or child support documents helps.

• Budget Effectively: Demonstrating that you can manage household expenses and still service a mortgage shows lenders you’re low risk.

• Minimise Outstanding Debts: Reducing credit card balances and personal loans can improve your borrowing capacity.

• Consult a Mortgage Broker Early: Getting expert advice early helps you prepare financially and understand how much you can borrow.

EverLend’s experienced brokers can help analyse your situation, identify weak spots, and offer strategies to boost your eligibility.

Why Work with EverLend Mortgage Brokers in Melbourne

Single parents benefit enormously from the guidance of an expert mortgage broker, especially when buying in a complex market like Melbourne.

Here’s how EverLend helps:

• Tailored Loan Advice: We match you with lenders that support low deposit and government-backed loans for single parents.

• Application Support: Our team ensures your paperwork is accurate, complete, and meets lender requirements.

• Access to Exclusive Lenders: We offer products from trusted banks, credit unions, and specialised lenders you may not find on your own.

• Local Market Knowledge: As Melbourne-based brokers, we understand the city’s housing market and lending landscape inside out.

• No Cost to You: Our services are typically free for borrowers. Lenders pay us a commission when your loan is settled.

Visit www.everlend.com.au or call 03 7036 3356 to book a free consultation and speak with a friendly Melbourne broker today.

FAQs

Can I get a home loan as a single parent?

Yes, single parents in Australia can get a home loan through the Home Guarantee Scheme, backed by the Australian Government. It allows legal guardians with a dependent child to buy a home with just a 5% deposit via a participating lender. You’ll need a stable income, good credit score, and the capacity to repay the loan.

Can you buy a house on single parenting payment?

Buying a house on a single-parent payment is possible if you meet lender requirements. Some participating lenders in the Home Guarantee Scheme may count Centrelink payments as income. You’ll need to meet income limits and provide Australian Taxation Office records. Combining payments with other income and accessing stamp duty concessions can improve your chances.

Can single parents really buy a home with a 2% deposit in Melbourne?

Yes. With programs like the Family Home Guarantee, eligible single parents can buy a home with just a 2% deposit and no LMI.

Do single parents qualify for the First Home Owner Grant in Victoria?

Yes, if it’s their first home and the property is a new build. The grant offers $10,000 toward the purchase.

What income do I need to qualify for a home loan as a single parent?

Each lender has different criteria, but showing stable income (including child support or Centrelink payments) is essential.

Can I use child support payments as income for a loan?

Yes. Many lenders count child support as income, but you must provide documentation showing it’s consistent and ongoing.

Is it better to go to a bank or use a mortgage broker like EverLend?

Mortgage brokers offer access to multiple lenders, increasing your chances of finding a suitable and affordable loan.

How much does a single parent need to buy a house?

The amount a single parent needs to buy a home depends on price and location. With the 5% Deposit Scheme under the Home Guarantee Scheme, you may need just 5% upfront—around $32,500 for a $650,000 home in Melbourne. 

Don’t forget other costs like legal fees and stamp duty concessions. A strong credit score and meeting income limits boost your chances with a participating lender.

Wrapping It Up

Home loans for single parents in Melbourne are more accessible than many realise, thanks to supportive government schemes and low deposit options. With rising property prices, these resources are more important than ever in helping single parents achieve home ownership. 

EverLend’s Melbourne mortgage brokers are here to simplify the process, offer tailored advice, and connect you with the most suitable lenders for your circumstances.

If you’re a single parent ready to explore your options, don’t go it alone. Reach out to EverLend today at www.everlend.com.au or call us directly at 03 7036 3356 to book a free personalised consultation. Our team is ready to help you turn the dream of owning a home into a reality.