Yes, many lenders will assess first home buyer contract income, including PAYG and fixed-term contracts, even if you have not been in the role long. Lenders mainly want to see that your income is likely to continue, so they look at your contract, your payslips and your history in your industry. This guide explains how they assess it and what to have ready.
What counts as PAYG contract income?
PAYG contract income means you are paid as an employee on a contract, not through your own business. You receive payslips, tax is withheld and you do not need an ABN. Common examples are a fixed-term contract with one employer, a labour hire or agency placement, and a project or government contract role.
If you invoice with your own ABN or company, you are an independent contractor, and lenders assess that income differently. We cover that situation in our guide for IT contractors moving into self-employment.
Can you get a home loan on a contract?
Yes. A contract is not a problem on its own. In fact, being a fixed-term employee can help, because you receive regular payslips like any other employee. The lender’s question is whether your income is stable and likely to continue.
Policies differ a lot. Some lenders want a minimum time in the role or a minimum time left on the contract. Others will consider a new contract with a signed agreement and a first payslip, as long as you have a strong record in the same field. That is why the same borrower can be declined by one lender and approved by another.
How do lenders assess first home buyer contract income?
Your contract. Lenders look at the start and end dates, your pay rate, your hours and whether the contract has been renewed before.
Your payslips and tax records. Most lenders ask for recent payslips and your ATO income statement or tax return to confirm your income and the tax withheld. The number of payslips varies by lender.
Your industry history. Years of work in the same or a similar field often count for more than the length of your current contract.
Gaps between contracts. Short gaps are usually fine. Long or frequent gaps raise questions, so be ready to explain them.
Your pay structure. If you are paid a daily or hourly rate, lenders convert it to an annual figure based on your usual days or hours. Some lenders count only part of overtime or allowances.
What if your contract ends soon?
This is the most common worry, and it is not always a dead end. Some lenders will still consider a contract with only a few months left, especially if you have been renewed before or work in an industry where contracts regularly roll over. Others prefer a minimum time remaining.
Things that help include your renewal history, a letter from your employer or agency confirming the contract is likely to be extended, and a clear work history in the same field. Rules on fixed-term employment contracts changed in late 2023 and can limit how long some contracts run and how often they are extended, so it is worth asking your employer or agency what is possible for your role.
Do not assume that a decline from one bank means a decline from every lender.
Does it help if you were permanent before?
Yes. If you moved from a permanent job into contracting in the same field, some lenders treat that as continuity and use your earlier payslips to show a stable income history. If you have changed fields, the assessment is usually stricter.
If you have only just started, speak to a broker before you apply. Some lenders will consider a new starter with a signed contract and a first payslip, while many will not, and every application leaves a mark on your credit file, so the first lender you approach matters.
What deposit do you need?
A contract does not automatically mean a bigger deposit. But with less than 20%, Lenders Mortgage Insurance (LMI), the fee banks charge when your deposit is small, usually applies. You have three main options.
Save 20%. This avoids LMI, but it can take years in Sydney.
Use the First Home Guarantee. The government scheme lets eligible first home buyers buy with a deposit as low as 5% without paying LMI. Since 1 October 2025 there has been no income cap and no limit on places. Price caps still apply, currently $1.5 million for Sydney and certain regional centres and $800,000 for other parts of NSW. You apply through a participating lender, and you must be buying to live in the home. Check the current rules at Housing Australia.
Ask your family to help. A parent or close family member can act as a guarantor using the equity in their home. Our guide to guarantor home loans explains how it works and the risks.
Also check the NSW first home buyer stamp duty exemptions and concessions, which apply up to set price thresholds.
What else affects how much you can borrow?
HELP or HECS debt. Repayments count as a commitment, so they reduce what you can borrow.
Credit cards. Lenders count your card limits, not your balances, so closing cards you do not use can help.
Other debts. Car loans, personal loans and buy now pay later accounts all count.
Living expenses and dependants. Lenders compare your spending with benchmarks as well as your declared figures.
What documents will you need?
Most lenders ask for your signed contract and any extensions, your most recent payslips, your latest ATO income statement or tax return, bank statements that show your savings and spending, ID, and details of your debts and commitments. If your contract is being extended, a letter from your employer or agency helps. If you recently moved from a permanent job, include your earlier payslips or employment history.
A worked example (illustrative only)
This example is for illustration only. Actual outcomes depend on the lender and your circumstances.
Sam is 29 and works as an analyst on a 12-month PAYG contract through an agency, earning about $110,000 a year. The contract has been renewed once and has five months left. Before contracting, Sam spent three years in a permanent role in the same field. Sam has $45,000 saved and wants to buy a $750,000 home.
One lender Sam approaches wants at least six months left on a contract, so it declines. Another lender looks at Sam’s three years of permanent work in the same field, the renewal and a letter from the agency confirming the contract is likely to continue, and agrees to assess the application.
Sam uses the First Home Guarantee with a 5% deposit of $37,500, and keeps the rest of the savings for stamp duty, legal costs and a buffer. The same income and the same deposit led to two different answers, depending on the lender.
Common mistakes to avoid
Applying to one bank and assuming the answer applies to all. Lender policies on contract income vary widely.
Waiting until the contract has run out. It is usually easier to apply while you are still under contract.
Not keeping your paperwork. Keep your contract, extensions and payslips in one place.
Taking on new debt first. A new car loan or a buy now pay later account can reduce your borrowing power.
Applying everywhere at once. Each application can leave a mark on your credit file, so get advice on which lender to approach first.
Ready to take the next step?
Book a free strategy call with Rovo Finance. We will look at your contract, your work history and your deposit, tell you what options are available and which lenders we can take you to, and explain how long the process will actually take. There is no cost and no obligation to proceed. We can also tell you early whether a lender is likely to accept the time left on your contract.
