The single-income mortgage conversation

The mortgage was approved on two incomes. Then there was one income. The mortgage didn't care.

This is the conversation almost nobody walks you through. Not the lawyer (out of scope). Not the bank (they want you in the loan, not out of it). Not your mates (most haven't been there). You have to run the numbers yourself, then have a series of awkward chats, then make a call.

Here's the order I'd run it in if I were doing it again.

Conversation one: with yourself, with real numbers

Before you ring anyone, you need the truth. Pull last twelve months of statements. Strip out the joint expenses that have now halved or doubled. Add the new ones (rent on a second place if you've moved out, child support, double utilities during the transition).

Build a single-income P&L:

• Net monthly income (after tax, after super, after any garnishees)
• Mortgage repayment (current, plus what it'd be if rates rose 1%)
• Council rates, water, insurance (annualised / 12)
• Utilities, internet, phone
• Food, fuel, car running costs
• Child support, school fees, kids' activities
• Personal: gym, subs, health insurance
• Buffer for the surprises (around 10% of total)

Compare total outgoings to net income. The gap (or the deficit) is the conversation.

A common rule of thumb: if mortgage repayments are above 35% of net income on a single salary, you're stressed. Above 45%, you're in trouble. Below 30%, you've got room.

Conversation two: with the bank (carefully)

The bank can do several things to help, and a few that look like help but aren't.

Genuinely useful:

• Switch to interest-only for a defined period (12-24 months). Cuts repayments significantly. Doesn't reduce the loan, but it buys breathing room.
• Repayment pause / hardship arrangement. They have to consider this if you're in genuine financial difficulty. Affects your servicing record, but it's better than missed payments.
• Refinance to a longer term (back out to 30 years). Lowers monthly cost. Costs more total interest. Sometimes the right trade.
• Rate review. If you've been on the same rate for 12+ months, ask. Or get the broker to ask. They'll often shave 0.2-0.5% off to keep you.

Less useful, often pitched:

• Redraw your buffer to "consolidate" debt. You're moving short-term unsecured debt into a 30-year secured loan. The headline repayment drops. The total interest paid balloons.
• Top-up to "tide you over". Same problem.
• A "product switch" that resets your fixed-rate clock. Read the fine print on break costs.

I'd rather have a hard conversation about hardship than a smooth one about a top-up.

Conversation three: with a broker

A good broker is worth their commission. They have visibility across 30+ lenders, they know which ones are flexible on single-income servicing, and they do the paperwork.

What I'd ask:

• "If I refinance with my current loan, my current single income, and my actual expenses, what's the best rate I can get and from whom?"
• "What's the difference between staying with my current bank on a renegotiated rate and refinancing elsewhere?"
• "Are there any lenders that would consider my rental income / side income / bonus more favourably than mine does?"
• "What are the break costs and the total switching costs?"

If the broker can find you 0.5% lower over a 25-year remaining term on a $600k loan, that's $3,000 a year. Materially changes the single-income maths.

The harder conversation: do you keep the house?

Here's the question almost no man wants to ask out loud in the first six months. Should the house go.

Reasons to hold:

• Kids stable in the school zone
• You can actually afford it on the new numbers
• Selling now would crystallise a loss in a flat market
• The transaction costs (agent ~2%, conveyancer, marketing, stamp duty on a new place) are punishing

Reasons to let go:

• Repayments are above 40% of net on the single income
• You're chewing through the emergency fund to make ends meet
• The house is full of memories you'd rather not visit daily
• Downsizing frees up equity that gets the rest of your financial life unstuck

There's no universally right answer. There's only the answer that lets you sleep.

I held mine. Two of my closest mates sold theirs. All three of us made the right call for our own situations.

The numbers that actually decide it

If I had to write down the test for "can I keep this mortgage on one income", it'd be:

• Mortgage repayment under 35% of net income at current rate
• Repayment under 40% if rates went up 1%
• Three months of expenses in cash buffer after settlement dust has settled
• Income protection insurance in place
• A clear answer to "what's the fallback if I lose this job for six months"

Tick all five and you can probably hold. Miss two or more and it's worth running the sale numbers honestly.

The non-financial bit

Houses aren't just assets. They're memory containers. Sometimes selling is the right financial move and the wrong emotional one. Sometimes it's both right.

I know a bloke who sold a beautiful house he could have afforded because every room reminded him of a marriage he was trying to leave behind. Two years later he's in a smaller place, a smaller mortgage, a bigger life. No regrets.

I know another bloke who sold under pressure and spent three years in a rental he hated trying to claw his way back into the market in a rising city.

Run the numbers. Talk to a broker. Have the hard conversation with yourself before the bank has it for you.

Not financial advice, talk to an adviser before acting.