The Australian Bureau of Statistics (ABS) recently released figures showing the country’s divorce rate continues its slow, but steady rise.
While the emotional strain of divorce is well recognised, the financial stress and impact on housing can have a more lasting impact, particularly for mothers with dependent children.
Figures from the Australian Institute for Family Studies show that in the year immediately following divorce, women’s incomes decline while men’s stay the same. In subsequent years, women’s incomes rise much slower than men’s do.
It can take up to six years for single mothers with dependent children to recover their pre-divorce income, as they struggle to combine work and family responsibilities with less support.

They can also experience social and economic disadvantage that places them at a higher risk of financial distress and reliance on government benefits.
For these women, the idea of owning a home can seem a difficult, if not insurmountable, challenge.
While they may have equity from the family home, one of the barriers to buying out a former spouse is the upfront cost of refinancing.
The affordability of ongoing repayments is another challenge, especially for mothers that are working part-time and may not meet the eligibility criteria for a loan from many financial institutions.
Given these difficulties, there is a very real social need to provide more flexible lending options to help single mothers recovering from divorce into home ownership. This is essential for the wellbeing and security of these families.
For this reason, HomeStart recognises Centrelink payments and Family Tax Benefits as income. It also offers innovative loans like shared appreciation that boost borrowing capacity.

These unique options can give single mothers the ability to purchase their former spouse’s share of the house and help them keep their children in the family home.
Managing the household budget on a lesser amount is a challenge for all families, but particularly for those on limited incomes such as single parent households, who may struggle when hit with interest rate rises.
HomeStart’s unique repayment structure helps break the link between interest rates and repayments, which provides more certainty with budgeting and assists with managing unexpected expenses.

A customer’s initial repayments are based on their income plus commitments and typically adjust once a year in line with inflation. This means in most cases, the repayment amount changes only every 12 months.
As their children grow, single parents are generally able to increase their earning capacity.

Providing innovative loan products and alternative finance options to single mothers while they raise families and regain their financial position makes good financial sense, and it’s addressing a clear social need at the same time.

Want to see how someone else started over on a single income? Watch Moira’s story to see how she achieved her home ownership aspirations.