Can I Buy a House as a Single Person in Australia?
By Amie Parker
Yes, you can buy a home without a partner. Your relationship status does not determine whether you can qualify for a home loan. Buying on one income does come with real challenges, but with careful planning, home ownership is a genuine possibility for single buyers.
You Do Not Need to Wait for a Partner
One of the questions I hear most often is some version of: should I wait until I am with someone before I try to buy? My honest answer is no, not if you are financially ready and the timing makes sense for your life.
I bought my first home on my own at 25. I had spent five years saving while studying at university and living in share houses. By the time I was ready to buy, I had saved $80,000 and was working as a new graduate nurse. I used that as a 20% deposit to purchase a townhouse.
I want to be upfront about something: if you read those numbers and feel frustrated rather than inspired, that is a reasonable response. House prices have increased significantly in the years since I bought that property, and saving a 20% deposit while paying rent on one income can feel completely out of reach.
There are, however, options available to buyers now that were not available to me at the time. The Australian Government offers a scheme that may allow eligible first home buyers to purchase with a minimum 5% deposit without paying LMI (Lenders Mortgage Insurance). Under that same scheme, eligible single parents and legal guardians may be able to purchase with a minimum 2% deposit. There is also a shared equity scheme under which eligible buyers contribute a minimum 2% deposit and the Government may contribute a share of the purchase price, which can reduce the amount you need to borrow. Both schemes have eligibility requirements and property price caps that apply.
These schemes can be genuinely helpful, but suitability depends on your individual circumstances. I have flagged some of the specific details for verification in the notes at the end of this article, because the rules can change and you deserve accurate information.
What Is the Biggest Challenge for Single-Income Buyers?
When people come to me worried about buying on their own, they are usually most focused on the deposit. The deposit matters, but for many single-income buyers, the bigger obstacle is serviceability.
Serviceability is your demonstrated ability to afford the proposed loan. A lender will look at your income, living expenses, existing debts, credit card limits, dependents and other financial commitments. Lenders also assess home loans using an interest rate higher than the rate you will actually pay, to make sure you could still manage repayments if rates increased.
This means you can have enough saved for a deposit and still be unable to borrow the amount needed for the property you want. A larger deposit helps because it reduces the amount you need to borrow. A smaller loan generally means lower repayments and can make the application easier to service.
In some situations, a family guarantee may also be an option. This can allow a family member to use equity in their own property as additional security for your loan, which may help you get into the market sooner or reduce the need for lenders mortgage insurance. However, a family guarantee does not fix a servicing shortfall. You still need to show the lender you can afford the repayments from your own income. A guarantee also carries significant financial and legal risks for the family member involved, so everyone should get independent legal and financial advice before proceeding.
Your First Home Does Not Need to Be Your Forever Home
One of the most useful things I learnt from buying on my own is that your first home is a starting point, not a final destination.
Buying a smaller, older or less expensive property can give you more breathing room than borrowing the absolute maximum a lender is prepared to offer. Just because a lender approves you for a certain amount does not mean you will feel comfortable making those repayments every month alongside all of your other costs of living.
Before you set a price range, think honestly about what you want your life to look like after you buy. Will you still have money to go out, take a holiday, maintain your car or handle an unexpected expense? Could you manage if your interest rate changed? Would the repayments still be comfortable if you needed to take unpaid leave?
A less expensive home may give you a more manageable mortgage and allow you to build savings after settlement. That said, the cheapest property is not automatically the most affordable. An older home that needs significant work can cost considerably more than expected once you factor in renovations, repairs, strata fees, council rates, insurance and maintenance. Always consider what a building and pest inspection reveals before committing.
My first home was not my dream home. I owned the townhouse for approximately two and a half years. During that time, I renovated much of it myself with help from my dad, online tutorials and qualified tradespeople for work that needed professional expertise. When I sold, I made a profit. That gave me the foundation to move towns and eventually buy a home I truly love.
That outcome is not guaranteed. Property values can fall as well as rise, and renovations do not always add more value than they cost. But that first property gave me a way to start building equity and eventually move into something that suited me better.
How Should I Prepare My Finances as a Single Buyer?
When you buy with a partner, there is potentially a second income available if one person temporarily cannot work. When you buy alone, your financial safety net becomes especially important.
Consider how much money you will have left after paying the deposit and purchase costs. Using every dollar you have saved can leave you exposed when the first unexpected expense arrives. An emergency fund can cover urgent repairs, medical costs, car problems or a period away from work without immediately relying on credit.
It is also worth thinking about personal insurance. Income protection insurance is designed to replace part of your income if illness or injury stops you from working temporarily. Something as ordinary as a broken leg could cause serious financial stress if your job requires physical activity and you do not have enough paid leave or savings to cover the time off. Policy definitions, waiting periods and benefit periods vary, so the details matter.
Total and permanent disability insurance, commonly called TPD, generally pays a lump sum if you are permanently unable to work under the policy's definition. You may already have some cover through superannuation, but default cover is not automatically sufficient for everyone. A licensed financial adviser can help you assess what is appropriate for your circumstances.
Where Do I Start if I Want to Buy Alone?
You do not need to have everything perfectly in order before speaking to a mortgage broker. Starting the conversation early can help you understand approximately how much you may be able to borrow, what deposit and savings you may need, whether a government scheme could be available to you, how your existing debts and credit cards affect your borrowing capacity, and what practical steps you can take before applying.
You may find you are ready sooner than you expected. You may also find that you need another six or twelve months to save more, reduce debt or reassess the type of property you are looking for. Neither outcome is a failure. A realistic plan is far more useful than rushing into a mortgage that leaves you financially stretched.
Buying a home without a partner takes patience, flexibility and sometimes some difficult compromises. You may not be able to borrow the same amount as a couple on two incomes, but that does not mean home ownership is out of reach for you.
I know how daunting it can feel when every decision and every repayment rests with you alone. I also know how genuinely empowering it is to receive the keys to a home you purchased for yourself. Your first home does not need to be perfect. It simply needs to be the right first step for where you are right now.
If you are hoping to buy a home on your own, I can help you understand your borrowing position, explore what options may be available and work through a realistic plan for your purchase.
This article contains general information only and does not constitute personal financial, credit, legal or insurance advice. Eligibility for lending products and government schemes depends on individual circumstances and applicable criteria.
Click here for the Australian Government 5% Deposit Scheme
Click here for the Australian Government 2% Deposit Single Parent Scheme