Can You Buy a Home on One Income? What to Expect in 2026
Key Takeaways
Buying solo is achievable in 2026, but with one wage absorbing the buffer assessment near 9.5%, your borrowing capacity is more sensitive to debts, dependants, and living costs.
Work backwards from your real capacity to a property type and location that fit, rather than stretching to a price that only works at today's rate.
Low-deposit pathways help: the 5% Deposit Scheme avoids LMI, and eligible single parents may buy with a 2% deposit.
Trimming credit card limits and other debts, keeping a post-settlement buffer, and matching lenders to your income type all strengthen a single-income application.
Buying a home alone has always required more of a budget than buying with a partner, and in 2026, the maths is tighter than usual. The Reserve Bank of Australia (RBA) cash rate sits at 4.35% after a series of increases through the first half of the year, and average variable home loan rates are in the high 6% range. Because lenders must test your repayments above the rate you actually pay, a single applicant is now commonly assessed at close to 9.5% per annum. With only one income to absorb that test, your borrowing capacity is more sensitive to debts, expenses, and dependents than a couple's would be.
The picture is not one-sided, though. The expansion of the Australian Government 5% Deposit Scheme in late 2025 removed income caps and placed limits, and a separate stream lets eligible single parents buy with as little as a 2% deposit. So the real question for a solo buyer is not simply whether a loan is possible, but whether your income, deposit, and buffers line up with how lenders assess risk, and whether the loan stays comfortable once you are in it.
This article explains what one income means to a lender, why solo borrowing capacity is tighter, the deposit and scheme options available, and a clear way to judge whether you are ready, close, or better off strengthening your position first.
What one income actually means to a lender
The phrase covers more situations than it first appears, and lenders treat them differently because the risk profile changes with each one. Understanding which category you fall into helps you read your own application the way an assessor would.
The common single-income situations are:
A single applicant with no dependants, buying on their own income alone.
A single parent or guardian with one or more dependent children, where childcare and living costs reduce serviceable income.
A couple applying on one income, often because one partner is not working or is on parental leave, while both adults still need to be supported by the budget.
The number of people the income has to support matters as much as the income itself. A buyer earning $100,000 with no dependants has more borrowing capacity than the same earner supporting two children, because lenders build assumed living costs for each dependant into the assessment.
Why is the borrowing capacity tighter on one income
Borrowing capacity is the amount a lender will advance based on your income, expenses, debts, and assessment rules. For a solo buyer, the same rules that apply to everyone simply have less income to work against, which is why the result often surprises people.
Under rules set by the Australian Prudential Regulation Authority (APRA), lenders must assess your repayments at your actual rate plus a buffer of 3 percentage points. With variable rates in the high 6% range, many applicants are being tested near 9.5%. For a couple, a second income helps absorb that buffer figure. On one income, there is no second wage to soften it, so the assessed repayment consumes a larger share of what you earn.
Lenders also apply an assumed living-cost estimate, often based on the Household Expenditure Measure (HEM), and add any real commitments on top. A second constraint now applies as well: from February 2026, lenders must limit loans with a debt-to-income (DTI) ratio of six or more to a small share of their new lending. Single-income buyers are more likely to bump against this ceiling because their borrowing sits against one wage rather than two.
As a rough illustration, supporting a $480,000 loan assessed at around 9.5% means an assessed repayment in the region of $4,000 per month. Once living costs are factored in, a single PAYG buyer with no other debts might need taxable income somewhere around $90,000 to $110,000 to service it, and more if they have a car loan or a credit card. The exact figure varies by lender and circumstances, but the direction is clear: the buffer, not your real repayment, sets the bar.
How much you might need to earn, by property type and location
There is no single income figure that unlocks a home, because the number moves with the price you are targeting, and price moves with location and property type. Framing your search around what your income supports, rather than a fixed dream price, keeps the process realistic.
A few patterns hold for solo buyers. Capital city houses generally demand the highest single income, while units, townhouses and apartments lower the entry point because the purchase price is smaller. Regional centres and outer suburbs widen what one income can reach. The practical move is to work backwards: establish your borrowing capacity first, then choose the location and property type that fit inside it comfortably, rather than stretching to a figure that only works at today's rate.
Deposit, LVR, and LMI on a single income
Saving a deposit on one income takes longer, which makes the deposit rules and the insurance attached to smaller deposits especially important for solo buyers. Knowing how these interact can save you both time and a significant cost.
Your deposit sets your loan-to-value ratio (LVR), the size of your loan as a percentage of the property value. A 20% deposit gives an 80% LVR, the level most lenders treat as low risk. When you borrow more than 80%, lenders generally require Lenders Mortgage Insurance (LMI), which protects the lender if you default; it does not protect you, and it can add thousands to your loan. For first home buyers, the main way to avoid LMI with a small deposit is the Australian Government 5% Deposit Scheme, where the government guarantees up to 15% of the value, so you can buy with a 5% deposit and no insurance. The single-parent stream lowers that to a 2% deposit for eligible buyers. Lenders also look for genuine savings, funds you have built up over time, as evidence that you can manage repayments.
Government schemes that can help single-income buyers
For a solo buyer, government support can close the gap between what you have saved and what you need, and some schemes also reduce the size of the loan itself. Checking your eligibility early lets you plan your deposit accurately.
The options most relevant to single-income buyers include the Australian Government 5% Deposit Scheme, which is now free of income caps and place limits, making it more accessible than it once was. The First Home Owner Grant, offered by states and territories and usually tied to new builds, and first home buyer stamp duty concessions or exemptions, which differ by state, can both reduce upfront costs. The First Home Super Saver Scheme lets you withdraw eligible voluntary super contributions toward a deposit. The Help to Buy shared equity scheme, which is means-tested, can be particularly useful on one income because the government co-purchases part of the home, which lowers the loan you need to service. Because caps and rules vary by state and change over time, confirm the current details for your situation before relying on any of them.
Debts that quietly reduce your borrowing power
On a single income, existing commitments carry more weight because there is no second wage to offset them. Lenders factor each one into your serviceability, and several cost you more capacity than the monthly payment suggests.
Credit cards are usually assessed on the limit, not the balance, so an unused $15,000 card still reduces what you can borrow. Car loans and personal loans bring fixed repayments that come straight off your serviceable income. Buy-now-pay-later accounts and Higher Education Loan Program (HELP) debt also lower capacity, with HELP repayments rising as your income grows. A clean credit file supports your application, while recent defaults or missed payments narrow your lender choices. For a solo buyer earning $95,000, clearing a credit card and reducing a car loan before applying can lift borrowing capacity by tens of thousands, which is often a bigger gain than adding the same amount to the deposit.
Single-income scenarios
The general rules become clearer when applied to real situations. The following scenarios show how lenders tend to view different solo buyers, and where the pressure points sit for each.
The single first home buyer
A salaried buyer with no dependents and minimal debt is in the most straightforward position. Their main constraints are the deposit and the buffered serviceability test. Reducing credit card limits and choosing a property type that fits inside their capacity usually does more to strengthen the application than chasing a marginally higher loan.
The single parent
A single parent faces the deposit hurdle and the added living costs of dependants, which reduce serviceable income. The 2% deposit single parent stream can be decisive here, since it removes LMI and lowers the savings needed. Childcare costs and any child support, paid or received, will be factored into the assessment, so accurate budgeting matters.
A couple applying on one income
When only one partner works, perhaps during parental leave, the application is assessed on that single income while still supporting both adults. Some lenders take a more favourable view if there is evidence the second income will return, but the safe approach is to ensure the loan is comfortable on the one income that exists today, not the one expected later.
The self-employed sole applicant
A self-employed solo buyer is typically assessed on one to two years of tax returns, with lenders adding back certain expenses and depreciation in different ways. Because the treatment of business income varies widely between lenders, this is the scenario where lender selection makes the largest difference to the borrowing figure.
How to improve your chances of approval
If your borrowing capacity is short, the position is rarely fixed. A few targeted changes can move the number meaningfully, and most can be done within a few months.
Reduce or close unused credit card limits, since the limit is what counts against you.
Pay down or clear car and personal loans where practical.
Build a larger deposit to lower your LVR and avoid or reduce LMI.
Adjust your target to a property type and location that your income supports comfortably.
Keep clean, consistent income evidence, especially if you are casual, contract or self-employed.
Match your application to lenders whose policies suit your income type rather than applying broadly.
Each of these works because it changes a specific input in the serviceability calculation. The aim is not just to pass the assessment, but to land on a loan that remains comfortable afterwards.
When buying on one income may be too risky
Part of a sound decision is recognising when waiting is the stronger move. One income offers no second wage to fall back on, so certain situations carry more risk than the approval alone suggests.
It is worth pausing if your income is new or irregular and not yet proven, if you would be borrowing close to your maximum while supporting dependants, or if your budget only works at today's rate with nothing left after settlement. A single income with no emergency buffer is exposed to a single setback, whether a repair, a rate rise or a gap between jobs. Strengthening your deposit, buffer or income stability first is not a backward step; on one income, it is often what makes the purchase durable.
How a mortgage broker compares your options
Working out where you stand across income type, debts, deposit, and lender policy is harder on one income, because the policies that matter most to solo buyers differ between lenders and are not published. This is where a broker adds practical value beyond finding a rate.
A broker compares how different lenders assess your income, treat your debts, and view dependants, then matches you to those most likely to support your situation. They can pinpoint the single blocker holding back your capacity, whether a credit card limit, a shaded income type, or a serviceability gap, and identify which schemes and grants apply to you. If you are unsure whether your income, deposit, and buying costs line up with lender requirements, a mortgage broker in Albury and Wodonga can help you understand your borrowing capacity, compare lender policies, and work out whether government schemes or lender-specific options improve your path before you start making offers.If you are unsure whether your income, deposit, and buying costs line up with lender requirements, speaking with a mortgage broker in Albury & Wodonga can help you understand your borrowing capacity, compare lender policies, and work out whether government schemes or lender-specific options may improve your path before you start making offers.
Frequently Asked Questions (FAQs)
Can I get a home loan on one income in Australia?
Yes, single-income home loans are common and available from most lenders. The key factors are the stability of your income, your deposit, your existing debts and how many people the income supports. Because you are assessed at the buffered rate with only one wage, your borrowing capacity will be lower than a comparable couple's, so it helps to know your real capacity before you start searching.
How much do I need to earn to buy a home alone in 2026?
There is no fixed figure, because it depends on the price you are targeting, your debts and your living costs. As a rough guide, supporting a loan around $480,000 assessed near 9.5% could require taxable income in the region of $90,000 to $110,000 for a buyer with no other debts, with the requirement falling for smaller loans and rising if you carry a car loan or credit card. A broker can model your specific number.
Can a single parent buy with a 2% deposit?
Eligible single parents and guardians with at least one dependent child may be able to buy with a deposit as low as 2% under the single parent stream of the Australian Government 5% Deposit Scheme, without paying LMI. Eligibility conditions and property price caps apply, so it is worth confirming the current rules and whether your situation qualifies before counting on it.
Does HELP debt affect a single-income application?
Yes. Higher Education Loan Program repayments are treated as an ongoing commitment and reduce your serviceable income, with the repayment increasing as you earn more. On one income, this can have a noticeable effect on capacity. It does not usually rule out a loan, and clearing a small remaining balance before applying can help in some cases, though it is worth weighing the trade-off first.
Should I close my credit card before applying?
Reducing or closing an unused credit card can lift your borrowing capacity, because lenders assess the limit rather than the balance. On a single income, that effect is amplified. If you use the card regularly, you may not need to close it, but lowering the limit to what you actually need is often a simple way to improve your position.
How much emergency buffer should I keep after buying?
A common target is three to six months of essential expenses, including your new repayment, kept in accessible savings or an offset account. On one income this buffer matters more, because there is no second wage to cover a surprise such as a repair, a rate rise or a gap in work. Settling with nothing in reserve is one of the more avoidable risks for solo buyers.
Should I get pre-approval before making offers?
In most cases, yes. Pre-approval gives you a realistic borrowing figure and signals to agents that you are a serious buyer. Treat it as conditional rather than guaranteed, since the lender still needs to assess the specific property and confirm your details before final, unconditional approval.
The Bottom Line
Buying on one income is achievable in 2026, but it requires planning over optimism. The decisive factors are your income type and stability, the size of your deposit, the debts you carry and the buffer you keep after settlement, all measured against a serviceability test that assumes rates higher than you pay. If your income is steady, your debts are minimal and your budget holds at a rate above today's, a solo purchase can be well within reach, often with help from the expanded deposit schemes. If a piece is short, treat that as direction rather than a closed door: strengthen the weak point, get a realistic borrowing figure, and you can move forward as a clear, considered decision.