Holding Back Because You Think You Need to Sell First
You don't need to sell your current property before securing finance for a larger home. Lenders can assess your borrowing capacity based on both properties, allowing you to purchase before you list. This approach removes the pressure of settlement timing mismatches and gives you control over both transactions.
Consider a midwife in a permanent role with a property valued at current market rates and a remaining mortgage of around 60% of that value. The equity available in that property can form part of your deposit for the next purchase without requiring immediate sale. The lender will assess your income against both the existing mortgage and the new loan amount, factoring in rental income if you decide to lease the current property rather than sell.
Some lenders who work regularly with healthcare professionals understand that shift patterns and allowances form a stable income base, which strengthens your application when borrowing across two properties. If your income can service both loans, you may buy your next home while keeping the first as an investment or selling it after settlement on more favourable terms.
Underestimating How Much You Can Borrow When Income Includes Allowances
Midwives often assume their borrowing capacity is limited to base salary. Most lenders will include regular shift penalties, overtime, and allowances when calculating what you can borrow, provided these payments appear consistently on your payslips over several months.
Your taxable income as shown on your Notice of Assessment may not reflect your true earning capacity if allowances are partly tax-exempt or if you've only recently increased your hours. Lenders assess serviceability using payslips and employment contracts, not just tax returns. If you work permanent part-time or full-time with a consistent roster that includes night shifts or weekend penalties, those loadings count toward your application.
In scenarios where a midwife is moving from a smaller property into a four-bedroom home to accommodate growing children, the difference in loan amount might be significant. Access to home loan options that recognise healthcare income structures means the gap between what you think you can borrow and what you actually qualify for can be wider than expected, particularly if you're comparing online calculators that only accept base salary inputs.
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Choosing Variable Rate Only Because It Feels Flexible
A variable rate gives you the ability to make extra repayments and access features like an offset account, but it also means your repayments move with rate changes. When upsizing into a higher loan amount, that exposure increases.
A split loan structure lets you fix a portion of the loan while keeping the rest variable. You might fix 50% to 70% of the loan amount for three to five years, locking in repayment certainty during the years when childcare costs and school fees are rising, while keeping the variable portion available for extra repayments or access to an offset.
If your household budget tightens when rates rise, the fixed portion acts as a buffer. If you receive a bonus, inheritance, or parental leave payout, the variable portion allows you to reduce the principal without penalty. This structure suits midwives who want repayment stability without losing the flexibility to pay down debt when income allows.
Skipping Pre-Approval Because You're Still Looking at Properties
Waiting until you find the right property before seeking finance means you enter negotiations without knowing your limit. Sellers and agents take buyers with pre-approval more seriously, and you avoid the risk of falling short once formal valuation and serviceability checks are completed.
Pre-approval involves a full assessment of your income, existing debts, and deposit. It's valid for several months and gives you a confirmed borrowing limit. If you're upsizing from a two-bedroom unit into a house with enough space for a growing family, knowing exactly what you can borrow lets you focus your search on properties within reach and make offers with confidence.
Lenders who work with healthcare professionals regularly will process your application with an understanding of how shift work, allowances, and parental leave arrangements affect income verification. That familiarity can reduce the time it takes to reach pre-approval and improve the likelihood of a smooth path to settlement.
Overlooking Offset Accounts When Structuring the Loan
An offset account linked to your home loan reduces the interest you pay by offsetting your loan balance with the funds sitting in the account. If you carry a balance from regular income between pay cycles, even a modest amount reduces the daily interest calculation on your mortgage.
For midwives who may be planning parental leave in the coming years, an offset account provides a place to accumulate savings while still reducing loan costs. Rather than paying extra directly onto the loan, funds in the offset remain accessible if you need them during reduced income periods, while still delivering the same interest saving as a direct repayment would.
This feature works particularly well on the variable portion of a split loan. You maintain the certainty of fixed repayments on one part of the loan and maximise flexibility on the other. When comparing home loan products, check whether the offset is fully linked or only partially linked, as a partial offset delivers less value.
Assuming You'll Need Lenders Mortgage Insurance on the Full Loan
When your deposit is below 20%, Lenders Mortgage Insurance usually applies. Some lenders offer LMI waivers or discounts to healthcare professionals, which can reduce or remove that cost even when your deposit sits between 5% and 20%.
If you're using equity from your current property as part of your deposit, the combined loan to value ratio across both properties determines whether LMI applies. In some cases, releasing equity brings your total borrowing above 80% of the new property's value, triggering the insurance. Access to no LMI loans for midwives through specialist lenders means you may be able to borrow more without that additional cost, freeing up funds for furniture, relocation, or retention as a financial buffer during the transition.
The saving from avoiding or reducing LMI on a larger loan can be several thousand dollars. That amount might cover stamp duty concessions, moving costs, or the deposit for childcare when you return to work after a period of leave.
Moving Forward with Confidence
Upsizing into a larger home when your family is growing involves more than finding the right property. The way you structure your home loan determines how much flexibility you retain, how much interest you pay, and how well the mortgage adapts to changes in income or expenses over the next few years.
Call one of our team or book an appointment at a time that works for you. We'll assess your income, review your current position, and structure a loan that fits your situation as a midwife moving into the next stage of family life.
Frequently Asked Questions
Do I need to sell my current home before buying a larger one?
No, you don't need to sell first. Lenders can assess your borrowing capacity based on both properties, allowing you to purchase before listing. This approach removes the pressure of settlement timing mismatches and gives you control over both transactions.
Will shift penalties and allowances count toward my borrowing capacity?
Yes, most lenders include regular shift penalties, overtime, and allowances when calculating what you can borrow. These payments need to appear consistently on your payslips over several months, and lenders assess them using payslips and employment contracts rather than just tax returns.
What is a split loan and why would I use one when upsizing?
A split loan lets you fix a portion of your loan while keeping the rest variable. This provides repayment certainty on part of the loan while maintaining flexibility for extra repayments or offset account access on the variable portion, which suits growing families managing changing expenses.
Can I avoid Lenders Mortgage Insurance when upsizing with less than 20% deposit?
Some lenders offer LMI waivers or discounts to healthcare professionals, which can reduce or remove that cost even with a deposit between 5% and 20%. Using equity from your current property may also affect whether LMI applies depending on the combined loan to value ratio.
Why should I get pre-approval before looking at properties?
Pre-approval gives you a confirmed borrowing limit before you make an offer, which means you can negotiate with confidence and focus your search on properties within reach. Sellers and agents also take buyers with pre-approval more seriously during negotiations.
