Home Loan on Probation, Casual Work or Overtime: What Lenders Look At

By Andrew Paterson

If your pay doesn’t look like a tidy permanent salary, someone has probably told you a home loan is out of reach. That’s rarely the case.

Buying while on probation, on casual shifts or with a lot of overtime is very doable. What matters is how each lender treats your income and applying to one whose policy fits.

Pick the wrong lender and you can end up with a decline and an extra enquiry on your credit file. Pick the right one and your application looks like anyone else’s.

General information only. This doesn’t consider your personal situation and isn’t credit advice. Lender policies change often, so confirm current policy with a broker before relying on any figure here.

Probation on its own won’t rule you out

No law or regulator rule stops you getting a home loan while on probation. Lenders still have to meet responsible lending obligations, so they look closely at whether your income is likely to continue.

How they handle probation is a policy choice, and it varies. Macquarie says it will typically still consider an applicant on probation if they meet its tenure rules. Bankwest’s broker guide says it considers probation up to 80% LVR.

The things that tend to help:

• Staying in the same industry or type of role as your previous job
• A permanent full-time or part-time contract
• An employer letter confirming your role, salary and that the position is ongoing

Picture a physio who moves clinics on the same permanent basis. They are two weeks into the new job but have five years in the field.

Some lenders will assess that application straight away, while others want probation finished first. That gap is why matching you to the right lender matters before anyone runs a credit check.

How lenders assess casual income

Casual work is common. The ABS counted 2.4 million casual employees in August 2025, about 19% of all employees.

A casual employee paid through PAYG, with tax withheld by the employer, is assessed under the lender’s employee income rules. The self-employed rules, with their tax return requirements, apply to people working under an ABN.

Lenders mainly look at how long you have been casual and how steady your hours are:

• Around 6 months in the role or industry is a common minimum, as at Macquarie and Bankwest
• Some lenders ask for 12 months
• A few specialist lenders will look at shorter histories where hours are regular

Once you meet the tenure rule, several lenders count 100% of casual income. Macquarie and Bankwest both say so in their broker guides, with Bankwest using annualised year-to-date income. Others are more cautious, so it pays to check before you apply.

For a longer look at tenure, savings and credit history, see our guide on getting loan ready.

Contractors: check how you’re paid

This is the real dividing line. If you invoice under an ABN, most lenders treat you as self-employed and usually want tax returns and notices of assessment.

A PAYG fixed-term contract is different and is generally assessed more like standard employment. Before you assume the harder path applies, look at your payslips.

• PAYG casual or fixed-term contract: employee income policy
• ABN sole trader, partnership or company: self-employed policy

Self-employed borrowers have more choice than they used to. All four major banks now consider one year of financials in some cases, including Westpac since July 2025. Our self-employed income requirements guide covers the detail.

Overtime, allowances and shift penalties

Overtime is where lender policy differs most. Many lenders count only part of it, which is known as shading.

• Regular overtime in most jobs: commonly counted at up to 80%
• Overtime for essential service workers: counted at up to 100% by some lenders
• Shift allowances that are a condition of employment: often counted at 100%

Macquarie counts up to 80% of overtime for most roles and up to 100% for essential services such as health, police, fire and public transport. Bankwest uses 100% of regular overtime for healthcare and emergency services workers.

Westpac counts 100% of overtime and allowances for eligible healthcare workers. Which roles qualify as essential services differs from lender to lender, so check the list before assuming yours is on it.

A few other points to know:

• Lenders want evidence the overtime is regular and ongoing, usually payslips with year-to-date figures
• Where history is short, some use the lower of annualised year-to-date income or last financial year
• A contract or employer letter showing overtime is part of the role helps

Why shading has such a big effect

Shading reduces the income a lender uses before it tests whether you can afford the loan. That test already includes APRA’s serviceability buffer of 3 percentage points above the loan rate.

APRA has also limited high debt-to-income lending since February 2026. Banks can write no more than 20% of new owner-occupier loans, and separately 20% of investor loans, at six times income or more.

For more on how the pieces fit together, read how lenders calculate borrowing power.

A worked example

Take a shift worker earning $75,000 base plus $25,000 of regular overtime. The table shows how much income each lender approach would count.

Overtime treatment	Overtime counted	Total income used
Not counted yet	$0	$75,000
Shaded to 80%	$20,000	$95,000
Counted at 100%	$25,000	$100,000

Now assume a 6.90% loan rate, assessed at 9.90% with the buffer, over 30 years. Assume a 32% marginal tax rate including the Medicare levy.

On those assumptions, the $5,000 gap between 80% and 100% adds roughly $32,000 to borrowing capacity. Counting the full $25,000 versus none of it adds roughly $160,000.

Real calculators also factor in living expenses and other debts, so treat these as rough guides. The takeaway holds, though: the same payslips can support quite different loan amounts at different lenders.

Which situation fits you?

Your situation	What lenders focus on
Permanent, on probation	Industry continuity and a permanent contract. Some lenders will assess you now, others want probation finished.
Casual PAYG employee	Time in the role, often 6 to 12 months, and steady hours. Several lenders count 100% of the income.
ABN contractor or company owner	Self-employed policy. Usually tax returns and notices of assessment, with some one-year options.
Overtime or shift heavy	Evidence the overtime is regular. Often counted at up to 80%, or up to 100% for essential service roles at some lenders.

Treat these as starting points. Weigh them against your goals and how your income might change over the next year or two.

Documents to gather

Having these ready speeds things up, whether you’re applying now or getting pre-approval first.

1. Your two most recent payslips, with year-to-date figures including overtime and allowances
2. Your employment contract
3. An employer letter confirming your role, pay and that it is ongoing
4. Last year’s PAYG income statement, so the lender can compare overtime year on year
5. For ABN contractors: recent tax returns and notices of assessment

Deposit size still plays a part

A bigger deposit gives you more lender choice, as Bankwest’s probation limit shows. With less than 20% saved, lenders mortgage insurance usually applies unless you use a scheme or qualify for a waiver.

First home buyers can look at the Australian Government 5% Deposit Scheme, which has had no income caps since October 2025. You still need to pass the lender’s serviceability test, so income shading matters just as much.

The bottom line

Probation, casual work, contracting and overtime are policy questions, and each lender answers them differently. Knowing which lender counts your income in full can change what you can borrow.

That’s where a broker earns their keep. We compare your actual situation across lenders before any application goes in.

Frequently asked questions

Can I get a home loan while still on probation?

Often, yes. Some lenders will consider you straight away if you meet their tenure rules, while others wait until probation ends or limit the loan size. Bankwest, for example, considers probation up to 80% LVR.

How long do I need to be casual before applying?

Six months in the role or industry is a common minimum, and some lenders ask for 12. A few specialist lenders will consider less where your hours are regular.

Will a lender count all of my overtime?

It depends on the lender and your job. Many count up to 80% of regular overtime, and some count 100% for essential service workers such as nurses, paramedics and police.

What if my overtime history is short?

Some lenders won’t count overtime until you can show a few months of it. Others use the lower of your annualised year-to-date figure or last financial year’s income.

Does a 5% deposit make it harder with variable income?

It can narrow your choice, because some lenders set lower LVR limits for less standard income. A broker can find lenders whose deposit and income rules both fit.