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Can I refinance while on maternity or parental leave?
Bayley Clarke · Mortgage broker on the road · Last checked 3 September 2026 · 4 min read
The short answer
Yes, you can, providing we can show the lender what your return-to-work income is going to look like, and we've generally got some savings behind us to make up the difference while you're on leave.
It's about your situation, not the bank saying yes or no because you're on parental leave. The rule of thumb is that banks will use your return-to-work income, providing you are going to be returning to work. Where the banks differ is how much buffer they want, how long the leave can be, and whether the loan sits under 80% of the property's value.
The one minute version. The rest of this page is the detail underneath it.
What the bank is actually checking
Two things. First, what does your income look like when you're back? That's the number they'll assess the loan on, so they want evidence it's real: a letter from your employer confirming the return date, position and salary, plus your payslips from before the leave started.
Second, can you cover the repayments in the meantime? If the repayments while you're on leave are higher than what's coming in, the bank wants to see savings behind you that make up the difference for the leave period. It's not a trap, it's the bank making sure the months before you're back don't hurt.
How lenders differ on it
Every bank writes its own version of this. The common pattern is a maximum leave window before the return date, often somewhere in the range of a few months to a year, a return-to-work letter, and a savings buffer sized to the shortfall over that window. Some banks assess on the full return-to-work income from day one. Others shade it, or only use part of it until you're back. A couple want you returning to the same employer, not just to work.
So the same family can be a clean approval at one lender and a decline at another with nothing about their situation changing. That's the routing I do before anything gets lodged. If your partner's income covers the loan on its own, most of this drops away.
The refinance gates that still apply
Parental leave doesn't switch off the normal refinance rules. If the loan is under 80% of the property's value, the reduced-buffer refinance paths some banks offer can still be in play, providing the repayment history is clean and the loan has been open at least 12 months. Above 80% of value the options narrow, and lenders mortgage insurance may come back into it. That side is on can I refinance if my LVR is over 80%.
And your credit file gets read the same way as anyone else's. If you've juggled cards while on leave, get the report in front of you before applying. What credit score do I need to refinance covers what matters on it.
The honest bit: if you're not sure you're going back
The whole thing hangs on return-to-work income. If you're genuinely unsure whether you'll return, or in what capacity, the honest move is to run the numbers on the income you're confident of, not the income the letter says. A refinance that only works on a full-time return you're not planning to make is a problem in 12 months.
Sometimes the right answer is a reprice with your current bank now and a refinance once you're back and settled. That's not a no, it's a sequence.
On leave and want to know if a switch stacks up?
A 30 minute call. Your return-to-work income, your savings, the repayment gap for the leave window, and which lenders I'd expect to approve it. Nothing lodged, no hit on your file.
No cost to you. The bank pays me when a loan settles. ยท How I get paid
Next question
What credit score do I need to refinance?The other thing the bank reads before it says yes.
Related answers
Repricing versus refinancing: which one should I do first? What does the bank need if I'm relocating for work? Can I refinance if my value dropped or my LVR is over 80%?Not your question? Book a call and ask it, or call 0437 189 939.