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Considering a Job Change? Here’s How It Might Impact Your Mortgage Application

Considering a Job Change? Here’s How It Might Impact Your Mortgage Application

Changing jobs often brings perks like higher income, greater fulfilment, and growth opportunities. But have you thought about how it might impact your mortgage application? 

**Prime Time for Job Switches**

January and February are prime months for job changes in Australia. With the holiday season behind us, it's a time ripe with new opportunities. According to LinkedIn, 59% of workers are considering leaving their job in 2023, with over half confident in finding something better. Interestingly, 2023 is also shaping up to be a great year for property purchases, with house prices seeing a record decline of -8.40% in January from the May 2022 peak.

**Can a Job Change Affect Your Mortgage Application?**

The short answer is yes, a job change can impact your mortgage application. However, the extent depends on several factors. Frequent job changes can raise concerns for lenders, even if you have a stable employment history. Lenders prefer stability, so staying in a job and building your financial profile enhances your mortgage approval chances. 

**Low-Impact Job Changes**

Switching to a permanent, salaried role within your current industry is considered low-risk by lenders. This shows a proven track record and steady income. Typically, lenders require two to three recent payslips, and some may want you to be in your new job for at least three months. As long as you have a solid financial profile and stable employment history, the impact should be minimal

**High-Impact Job Changes**

A complete career overhaul, starting a business, or switching to casual, contract, or freelance work poses higher risks. These changes, while potentially rewarding, can make mortgage approval more challenging. Lower initial pay, lack of job security, and the time needed to establish yourself in a new role are all factors lenders consider risky. Lenders may require more than the usual two to three payslips and might want to see six months of employment in the new role. Self-employed applicants usually need at least a year’s worth of business income records.

**Need Help Navigating Your Mortgage Application?**

Switching jobs while applying for a mortgage can be tricky, but we're here to help. We can guide you to lenders who understand your situation and assist in presenting your application in the best possible light.

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