Getting a Mortgage as a Casual or Contract Worker

Casual employees and contractors can get home loans, but lenders assess your income differently than they do for permanent employees. Understanding the rules upfront lets you structure your application for the best possible outcome.

Casual Employment — How Lenders Assess Income

Casual income is treated as less reliable than permanent employment because there is no guarantee of ongoing hours. Lender policies typically require:

• Minimum time in role: 6–12 months with the same employer. Some lenders require 12 months in the same industry if you have changed employers recently.
• Income averaging: Lenders use the average of actual earnings over the period — typically the lower of a 3-month or 12-month average, not a full-time projection of your current casual rate.
• Long-tenure casual: If you have been a casual with the same employer for 2+ years with consistent hours, many lenders treat this almost as permanent employment.

Prepare: 12 months of payslips, a letter from your employer confirming the ongoing casual engagement, and tax returns or group certificates showing your income history.

Contract Workers — PAYG vs ABN

Lenders treat contractors differently depending on employment structure:

• PAYG contractors (paid through an employer or agency): Assessed similarly to permanent employees. The key concern is contract term remaining. A contract expiring in three months may cause a lender to decline or require evidence of renewal intentions.
• ABN contractors (self-employed): Assessed as self-employed — two years of tax returns required, income averaged across both years. See the self-employed mortgage guide for the full process.

Agency and Labour Hire Workers

Workers placed through a labour hire agency are assessed as PAYG employees — the agency is the employer of record. The 6–12 month minimum period applies to the agency engagement, and payslips from the same agency across different assignments help demonstrate continuity even if the client site changed.

Tips for Approval

• Apply after 12 months in the same role — crossing the 12-month mark with the same employer significantly strengthens the application
• Get an employer/agency letter confirming your role, pay rate, and that the engagement is expected to continue — lenders often require this
• Save a larger deposit — 20%+ removes LMI and signals financial discipline, which matters more for variable-income applicants
• Reduce all other debts — with income averaged down, every existing debt (credit cards, car loans, HECS) compresses your borrowing capacity further
• Consider a joint application with a permanently employed partner to anchor the serviceability assessment with stable income
• Use a mortgage broker who knows lender policies for casual and contract workers — the right lender can make a material difference to the outcome

The Income Averaging Reality

Build your borrowing capacity estimate around averaged income, not your current rate projected to full-time. A casual worker earning $95,000 in their most recent year but $75,000 in the year before will have their income assessed at approximately $85,000 by many lenders. Use the borrowing capacity calculator with your expected averaged figure before approaching lenders.

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