Why Probationary Employment Is a Problem for Some Lenders
Most Australian lenders have a policy of requiring borrowers to be out of their probationary period before approving a home loan. The reason is that employees on probation can be let go without notice in most industries — making the income source less secure than a permanent employee who has passed their probation.
Standard bank policy typically requires: either employment that has already passed probation, or evidence that the borrower has been in continuous employment (allowing for a job change) for a certain period — usually 3–12 months.
However, not all lenders take this view — and the way the application is presented matters enormously.
Which Lenders Will Approve a Home Loan on Probation?
Several lenders will consider home loan applications from borrowers who are still in their probationary period, provided certain conditions are met:
- Same industry, different employer: If you have changed jobs within the same industry (e.g., nurse moving from one hospital to another, accountant moving between firms), many lenders treat this favourably. Continuous employment history in the same field is a strong positive factor.
- Prior permanent employment history: If you have a strong employment track record — say, 5+ years in stable employment before this job — some lenders are willing to overlook the probationary status.
- Specific lenders with flexible policies: Some second-tier and non-bank lenders have more flexible probation policies than the Big Four. A broker with access to 50+ lenders can identify these.
What If I Have Just Started a Job?
If you have literally just started a new role (within the first 1–3 months), your options narrow but do not disappear. Strategies include:
- Wait until probation passes: Most probationary periods are 3–6 months. Waiting until you have passed probation and obtained a permanent employment letter will open up all lenders, better rates, and a simpler application.
- Apply now with a specialist lender: If waiting is not an option (e.g., you have found your ideal property), a mortgage broker can identify which lenders will consider your specific situation.
- Use pre-approval: Even if you apply now, pre-approval is valid for 3–6 months. By the time you exchange contracts, your probation may have passed — and the formal approval can proceed smoothly.
Use our Borrowing Power Calculator to assess your position, and our pre-approval guide to understand what a conditional approval means.
Tips to Strengthen a Probationary Period Application
If you need to apply while on probation, these factors improve your chances:
- Offer letter and employment contract: Provide your signed offer letter and employment contract. This proves the employment is real, documented, and on known terms.
- Strong employment history: A CV or employment history showing consistent work in the same industry with progressively more senior roles is compelling.
- Large deposit: A 20%+ deposit eliminates LMI concerns and reduces lender risk, making them more willing to accept a less certain income source.
- Existing property or assets: Owning other assets (existing property, share portfolio) reduces lender risk and improves approval prospects.
- Letter from employer: A letter from your employer confirming your expected probation end date and confirming that performance to date is strong is helpful with some lenders.
Does Employment Type Affect Probationary Period Policies?
Yes, significantly:
- Government and public sector employees: Government employees — including teachers, nurses, public servants, and emergency workers — are treated more favourably during probation, as government employment is highly secure even during the probationary period.
- Essential workers: Police officers, firefighters, and healthcare workers on probation in their professional role are generally viewed favourably by lenders who understand these professions.
- Self-employed: Self-employed borrowers do not have a "probationary period" as such, but have their own income evidence requirements (typically 2 years' tax returns). See our guide on self-employed home loans.
For more on employment types and home loans, our partners at Home Loans Hub have additional guides covering complex employment scenarios.
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📅 Book a Free Call Get in Touch →Frequently Asked Questions
Yes, but your options are more limited than if you had passed probation. Some lenders will consider applicants on probation if they can demonstrate: same industry experience, a strong prior employment track record, or a large deposit. A mortgage broker can identify which lenders have the most flexible probationary period policies.
Different lenders have different policies. Some will consider applications from day one of a new job if the borrower has long, stable employment history in the same industry. Others require that probation has passed (typically 3–6 months). A broker will find the most favourable lender policy for your specific timeline.
It can — especially if you are moving to a completely different industry or taking on a lower income. If you are changing roles within the same industry (e.g., a nurse switching hospitals), most lenders treat this favourably as continuous employment history. The key is presenting the change in the most favourable context.
Yes. An employment offer letter, signed contract, and — if you can get it — a letter from your employer confirming expected confirmation of employment after probation can all strengthen your application. Lenders want evidence that the income source is genuine and likely to continue.
In most cases, waiting until you pass probation gives you access to all lenders, better rates, and a simpler application process. If you are 2–4 months into a 6-month probation and have found your ideal property, applying now via a mortgage broker (and using pre-approval) is a viable strategy.