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The career move that could cost you your home loan

Reviewed by expert, David Koch
3 min read
30 May 2024
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Job hoppers who forged the ‘great resignation’ have been warned that too many career changes could put their home loan applications at risk.

A survey of 1,000 Australians in December found that more than a third of employed respondents were actively seeking a job change this year.

Compare the Market Economic Director David Koch, said job stability was a major consideration for lenders when assessing a home loan application, and too many short-lived stints could raise concerns.

“It’s important for aspiring home buyers to be able to demonstrate they’ll have a steady income, so the lender is confident they’ll meet mortgage repayments,’ Mr Koch said.

“If you’re a job hopper with gaps in your employment history, there’s a chance a lender may look at this unfavourably.

“Similarly, if you’re new to a job, or on a short-term contract, you could be seen as a higher risk compared with borrowers with a strong track-record of job security.”

Mass resignations became a workforce trend as employees sought better conditions in the wake of the Covid-19 pandemic.

According to the Australian Bureau of Statistics, the number of unemployed Australians rose to 4.1 per cent in January.

“Lenders policies can vary greatly, with some not considering borrowers with gaps of over 2 months on their employment records, or no more than 2 jobs in the last 12 months. Whereas others have less restrictions on these aspects.

This is why it pays to engage a specialist that can help you navigate these different policies so you find the lender that supports your situation.”

Other things that can impact a loan application include personal debts, poor credit scores, or a change in financial circumstances.

“If you’re looking for a home loan, or thinking about refinancing, it pays to focus on your credit history, make sure you’re paying bills on time, and wrap-up as many debts as possible to demonstrate that you are a reliable borrower,” Mr Koch said.

Aside from job hopping, Mr Koch said lenders look out for the following red flags:

Credit score

“Credit scores are a primary factor lenders take into account when people apply for a home loan because they represent your creditworthiness,” Mr Koch said. Lenders can look at where your credit score sits and immediately gain an idea of the amount of risk they’d be taking on by approving you for a loan.”

Late repayments

“Late repayments show up on your credit score as well. So, if you’re looking to refinance and you’ve missed repayments in the past two years, this might affect what home loan products are available to you. The good news is your repayment history renews after 24 months”.

Unpaid debt

Mr Koch said any unpaid debt should show up on a credit score as well. “Yes, this can include Buy Now Pay Later debt, car loans, personal loans and credit card debt. Another faux pas with credit cards is forgetting to pay the annual fee – even if you’ve met all other repayments, this can bring down your credit score”.

Card churning

Credit card churning is when you obtain a credit card, qualify for their bonus offer, then cancel it to repeat the process elsewhere. Mr Koch said many people might be tempted to do this but it can bring down your credit score. “It’s common for people to want to find ways to maximise these offers, but credit card churning can be another red flag for lenders”.


“If you’ve been bankrupt, it may take a while to build up your creditworthiness,” Mr Koch said. “Bankruptcies will remain on your credit file for seven years before it renews. If you’re within the seven years and are looking to take out a loan, make sure you do your research first before making an application”.

Multiple unsuccessful mortgage applications

You credit file will also include details of the loans you’ve applied for and repeat applications can be off putting to lenders. Mr Koch said this is why an online or traditional broker may be advantageous as they can look at a range of lenders which may be more inclined to grant you a home loan.

Mr Koch said people can get a free credit score report or compare lenders and their eligible products at Compare the Market’s website.

*Survey of 1,001 Australians conducted in December 2023.

For more information, please contact:  

Natasha Innes | 0416 705 514 | [email protected]

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, travel and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.

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Written by Natasha Innes

Natasha Innes is a Media and Communications Advisor at Compare The Market. Natasha joins us after working as a journalist at the Courier Mail and Seven News. She graduated from Queensland University of Technology with a dual degree in Business and Journalism majoring in Public Relations.

[email protected]

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