Home Loan Application Benefits
Did You Know Government Benefits Can Boost Your Home Loan Application? Let’s Find Out How!
When we think of government benefits in Australia, we often associate them with basic financial support — but did you know some Centrelink payments can actually improve your borrowing power when applying for a mortgage or refinancing?
In this article, we’ll explain how Family Tax Benefits (FTB) and other common welfare payments can support your loan application — with a real-life example to show how it works!
1. Centrelink and Your Borrowing Capacity
Australia is well-known for its strong welfare system, offering a wide range of support payments. But what many people don’t know is that certain Centrelink payments can be considered as income by banks when calculating your home loan eligibility.
This means you may be able to borrow more simply by including eligible government benefits in your application.
2. What is FTB (Family Tax Benefit)?
Family Tax Benefit (FTB) is a government payment designed to support low and middle-income families with the cost of raising children. It’s commonly known as the “baby bonus”.
FTB is divided into two parts: FTB Part A and FTB Part B.
FTB Part A
- Calculated based on your children’s age and household income.
As of now:
- Children under 12: up to AUD 222.04 per child every fortnight
- Children aged 13–15: up to AUD 288.82 per child every fortnight
- AUD 288.82 for a child 16 to 19 years who meets study requirements
- To receive the maximum amount, your family income must be under $65,189 per year.
FTB Part B
- Extra payment for single-parent families or single-income households.
- If one parent works while the other stays home or works part-time, you may qualify.
- Paid per family (not per child):
- Families with kids under 5: up to $188.86 every fortnight
- Families with kids aged 5–18: up to $131.74 every fortnight
- Payment amount reduces based on household income as well.
3. Real-Life Example — FTB Helped Unlock Investment Opportunities
A recent client came to us hoping to refinance their mortgage and borrow extra funds to invest in property. The client’s weekly income was around $700 (year 2022), which, after running a serviceability calculator, was not enough to qualify for the additional funds.
However, during a deeper discussion, we learned the client was receiving the maximum FTB payments.
What many don’t realise is that these FTB payments can be fully counted as income in loan assessments. In this case, the FTB payment added around 25% to the client’s total income, significantly boosting their borrowing power.
As a result, the client was approved to cash out enough funds to proceed with their investment property purchase.
4. Other Government Payments That Can Support Your Loan Application
Besides FTB, many other Centrelink payments can also help increase your borrowing power, depending on the lender:
- Age Pension
- Disability Support Pension
- Carer Payment
- Child Care Subsidy
- Widow Allowance
- And many more…
✔️ Pro Tip
Many government payments can be used to support a loan application, but how much each bank accepts varies. Some lenders may only count a percentage of certain benefits, while others may accept the full amount.
Speak with a mortgage specialist or broker to understand how much your benefits can boost your loan eligibility — you might be surprised how much you can borrow!
Visit our website to learn more: openmortgage.au