Income Types Lenders Will Not Accept in Wollongong, NSW, What Lenders Check
Your payslip says one thing. Your lender's assessment says another. For borrowers in Wollongong, NSW, the gap between what you earn and what a lender will count is often the difference between approval and a shortfall, and it catches people off guard every time.
Lenders don't assess all income equally. Some types are counted in full, some are shaded, some are averaged over years, and a few aren't counted at all until you've built enough history. Whether you're a shift worker at Wollongong Hospital, a contractor at the UOW Innovation Campus precinct, or a sole trader with a strong income but a short ABN history, the rules vary and so do the outcomes between lenders.
At SimpleFin, we help borrowers across Wollongong, NSW work through exactly this. Understanding how a home loan is structured around your specific income mix is where most of the difference is made.
Key takeaways
- Overtime and casual income are typically shaded 80–100% depending on the lender.
- Some income types require 12 months or two years of history before lenders count them.
- Policy differs between lenders, so the right lender choice can change your borrowing number.
What income types do lenders actually look at?
Lenders assess borrowing capacity by building a picture of your reliable, sustainable income. The question isn't simply what you earn, but how consistently you earn it and how well it's evidenced. Permanent base salary is counted in full and is the simplest case. Everything beyond that is subject to lender policy, and that policy differs meaningfully between lenders.
Most borrowers come to us believing their income is straightforward, and then we open the assessment and find three different income streams being treated three different ways by three different lenders. The gap between the best and worst outcome for the same borrower can be substantial, and it's entirely down to which lender you're in front of.
Greg Cooke · Director and Finance Broker, SimpleFin · Chat to Greg →
How do lenders assess variable and non-standard income?
Variable income - anything beyond a fixed base salary - is assessed on consistency and evidence, not on your best month. Lenders average it over a recent period rather than taking a peak figure, and the length of history they want depends on the income type.
How the main variable income types are treated:
- › Overtime: typically between 80% and 100% of a recent average, heavily discounted if it's inconsistent. Most lenders want six to twelve months of payslips showing regular overtime before they'll count it.
- › Shift allowances and penalties: commonly assessed as a portion of the average over a recent period. Lenders look for consistency across shifts, not just that you're paid at a higher rate.
- › Commission and bonuses: most lenders average the last one to two years and shade the result to between 80% and 100%. A single strong year with no prior history is often discounted heavily or excluded.
- › Casual employment: often accepted once you've established around twelve months in the same field. The lender wants to see the income is stable, not just that you have casual hours.
- › Rental income: typically shaded to around 80% of gross rent. Holding costs are added on top as commitments, so it's less of a boost to borrowing capacity than many investors expect.
- › Centrelink and child support: accepted by some lenders with conditions. Family Tax Benefit is the most commonly accepted; child support requires a court order or formal assessment and often has an age cut-off on the child.
Source: APRA.
Source: APRA.
Which income types do lenders most commonly reject or heavily discount?
Some income types are contested ground - not flatly refused by every lender, but excluded or heavily discounted by enough lenders that your choice of lender becomes critical.
Probation and new-job income
Many lenders will accept a new role if you're in the same field and haven't yet cleared probation. Others require probation to be completed before they'll assess the role. An unconditional letter of employment in a new field, without prior payslips, is harder to get across the line.
Self-employed and ABN income
Two years of tax returns is the standard requirement for self-employed borrowers. Some lenders accept one year where the ABN has been established longer, combined with an accountant's letter. A first-year ABN with no prior tax history is the hardest position - low doc lending exists for this, but it carries a lower maximum LVR and higher rates than a full-doc loan.
Income types that most lenders exclude
What tends to be excluded or not counted:
- › Dividend and director's fee income: accepted by some lenders, excluded by others. Two years of history is typically required, and the treatment varies significantly across the panel.
- › Trust distributions: some lenders count them where the trust is the borrower's and distributions are consistent. Many do not count them at all.
- › Superannuation pension: accepted by some lenders for retirees, subject to the loan term working within the retirement income picture. Most require current statements as evidence.
- › Buy now pay later and ATO payment plans: these appear on bank statements and are treated as commitments by most lenders. The balance is often less relevant than the payment plan's existence.
How much can excluded income cost you in Wollongong, NSW?
The impact of excluded income on borrowing capacity is felt most acutely in a market like Wollongong's, where house medians in established suburbs already sit above $1,000,000 in many pockets. CoreLogic data shows Wollongong (2500) with a median house price of $1,300,000, while more affordable options like Unanderra sit around $880,000 and Dapto around $830,500.
If a lender excludes your overtime and it represents a meaningful portion of your income, the deposit gap between a home you could realistically buy and one you couldn't widens fast. A borrower with consistent overtime who gets it counted in full can be in a materially different position than one who can't, even with identical take-home pay. Whether you're looking at suburbs like Unanderra- Dapto or Horsley, that difference in assessed income changes which properties are actually within reach.
Source: CoreLogic (via YIP, mid-2026).
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When does non-standard income not cause a problem?
Not every income complexity creates a problem. The lender's concern is consistency and evidence - if you can demonstrate both, many income types that seem uncertain become straightforward. A casual nurse with twelve months of consistent shifts at the same employer, for example, is in a much stronger position than someone who has just switched to casual work last month.
Parental leave is worth understanding here too. A return-to-work letter is typically what a lender assesses, rather than the parental leave payment itself. The income on the other side of parental leave is what matters - which means timing an application around confirmed return-to-work terms can make a real difference.
Similarly, HECS and HELP debt isn't an income type, but it functions like one in an assessment. Lenders count the compulsory repayment - not the balance - as an ongoing commitment. For borrowers with a large HECS balance and a high income, this repayment reduces borrowing capacity in the same way a car loan would.
Where I'd focus first is always the income the lender will shade or question, and whether there's a lender on the panel who treats it differently. It's almost never about getting a lower rate - it's about getting the right income assessment, and that often means going to a lender you wouldn't think of first.
Greg Cooke · Director and Finance Broker, SimpleFin · Chat to Greg →
How to manage your income picture before applying in Wollongong, NSW
Step 1: Talk to us
We work through your income mix before anything goes to a lender, so we know exactly how each component will be assessed and which lenders will give you the strongest result.
Step 2: Map your income types and evidence
We identify which income streams a lender will count in full, which will be shaded, and which need a longer history before they're usable. Payslips, tax returns, a current BAS if you're self-employed, and any Centrelink letters all form part of this picture.
Step 3: Match to the lender whose policy fits your situation
Policy differences between lenders are significant on variable income. We identify the lenders on our panel who treat your income type most favourably, and structure the application to make the strongest case with the right documentation in place.
Step 4: Submit and manage through to approval
Once the right lender is identified, we handle the submission and manage any questions that come back about your income during the credit assessment process.
What goes wrong when borrowers have complex income?
Where applications lose ground:
- › Applying to the wrong lender first: a lender who excludes your income type doesn't just decline the application - the enquiry sits on your credit file. Multiple unsuccessful applications in a short window make the next approval harder.
- › Insufficient income history: applying before the lender's required history period is established means the income is discounted or not counted. Waiting one reporting period can materially change what's assessed.
- › Undisclosed commitments: buy now pay later facilities, ATO payment arrangements and Afterpay all appear on bank statements. Lenders treat them as commitments regardless of the balance, and an undisclosed one discovered during assessment delays or derails an application.
- › Relying on a single lender's policy: if your main bank won't count your income type, that's one lender's policy - not the market's answer. A different lender with a different policy can produce a very different result.
- › Credit card limits assessed at full draw: lenders assess the limit, not the balance. A $20,000 credit card limit is treated as though it's fully drawn. Reducing limits before application can meaningfully lift borrowing capacity.
Frequently Asked Questions
Can lenders exclude overtime entirely from a home loan application?
Yes, some lenders discount overtime heavily or exclude it where the history is short or inconsistent. Most lenders want six to twelve months of regular overtime before they'll count it, and the percentage counted varies between lenders.
Does casual income count for a home loan in Wollongong?
Casual income is generally accepted once a borrower can show around twelve months of consistent work in the same field. Lenders assess the average income over that period rather than a single payslip.
How does self-employed income affect borrowing capacity?
Self-employed borrowers typically need two years of tax returns. The assessed income is usually the lower of the two years, or an average, which can be less than take-home pay suggests. Add-back treatment for depreciation varies between lenders.
Do lenders count Family Tax Benefit as income?
Some lenders accept Family Tax Benefit as income, particularly where there's a demonstrated pattern of ongoing payments. Others exclude it entirely. An entitlement letter is the usual supporting document required.
Is a HECS debt treated the same as other debt by lenders?
Lenders count the compulsory HECS repayment as an ongoing commitment, not the balance. At higher income levels this repayment reduces borrowing capacity in the same way a personal loan repayment would.
Is a mortgage broker better than a bank for borrowers with mixed income?
A mortgage broker, every time. Banks assess your income under their own policy only. A broker compares how your income is treated across 60+ lenders and routes the application to the one whose policy gives you the strongest result.
Your Next Steps
The right lender for a borrower with variable or non-standard income depends on which lender's policy fits your income mix, and that's a conversation worth having before you apply anywhere. Applying to the wrong lender first doesn't just risk a decline - it leaves a mark on your credit file that complicates the next application.
The right lender for complex income depends on your situation, and that's a conversation worth having. Talk to the SimpleFin team or call 0457 531 124, and we'll compare your options across 60+ lenders.
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External Resources
SimpleFin, Wollongong and the Illawarra. This is general information only and this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions.
