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I’m in a trial period - Can I apply for a home loan?

It’s less common these days to see trial periods in employment contracts since the law changed in 2018 to only allow employers with 19 or less staff to include trial periods. But the question does come up every now and then - can I apply for a home loan during a trial period? 

A trial or (sometimes referred to as a probationary period) allows an employer to assess your suitability for the role you were employed for over a given timeframe (but no more than 90 days). There’s heaps more info about that here but today we are going to look at whether being in a trial period will affect your ability to apply for a home loan! 

If you are in a trial period and the bank is relying on the income you generate in that role to service the home loan you are applying for, the bank will generally want you to be outside of that trial period before it will advance any funds for you to purchase a home. 

However, that doesn’t mean that you can’t apply for a home loan now. 

Let's say your trial period ends on the 1st of December. Once your home loan has been approved, the offer is valid for three months. We could apply in November so that you have a pre-approval ready to go and the bank will simply ask for confirmation that you have successfully completed your trial period after the 1st of December. 

So, if you’re thinking about making offers on a home, you’d likely need to have a finance condition in your agreement that took you past December 1, so that you could confirm this with the bank before going unconditional on the property. 

Of course, if your employer is willing to agree to move the end date of the trial period forward we can confirm this with the bank by providing a letter from your employer. Lots of employers are willing to help their employees move ahead with their home buying plans, so if you’re comfortable asking, it might be a good option to speed up the process. 

In short, don’t let a trial period put you off chatting to your mortgage adviser and getting an application ready - There’s no better time than now!

Get in touch to find out more!


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