HOME > BLOG > Home Loan Advice > Structuring your home loan around a baby

Are you at the point in your life where you are thinking about buying a property, but you also want a family? Then it is important to choose the right home loan to suit your future needs.

Whether you already have a home loan or are looking to take out a home loan whilst starting a family, you need to ensure that you will be able to meet your mortgage repayments while on maternity leave. Listed below are just a few tips.

Save up for repayments

It is always a good idea to prepare for a rainy day when it comes to your home loan repayments. When you go on maternity leave, there is a chance that unexpected bills and expenses will come, so plan to be ahead in your repayments as far as you can before you go on maternity leave so your mortgage repayments can be taken out of the buffer you’ve built up. You can also set aside a regular amount in a savings account and use it to pay the mortgage while you’re off work.

'Interest only’ home loans

By choosing an interest only home loan for the first few months or first year of your baby arriving, it can help make your mortgage repayments more manageable. It can possibly reduce your payments by a couple of hundred dollars a month, making it much easier to afford during maternity leave.

Keep in contact with your lender

Most importantly, it is vital to keep your lender in the loop. If you are unable to meet a repayment and start missing the deadline, your lender may be more inclined to help you if they know about your situation from the start. But, if you have kept them in the dark about your pregnancy and maternity leave, they may not be able to do much to help you. Full disclosure is important.

You may not realise that lenders will be unable to use any part of your salary if you are not going to be paid for a few months during maternity leave. If you are planning maternity leave, you need to show that you are going to be receiving income for the whole time that you are away, not just part of the time.

But what should you do if you already have a mortgage and want to start a family?

If this is the case for you, then it may be time for a check up on your home loan. By reviewing your current home loan now, it will give you the time to do your research and ensure the home loan will still be right for you when the baby arrives later on. It can also help save you money immediately if you find a more competitive option.

Some other tips to consider if you already have a mortgage include:

• Get in touch with your lender to see whether there’s a product designed with features in mind for people who are planning to have a baby and also speak with other lenders to see if there are more suitable options for you.

• Use free online calculators to get an idea of the difference between ‘principal and interest’ and ‘interest only’ repayments