The Queensland property market continues to grow, with areas like Brisbane and Logan showing steady increases in median house prices. But for many Australians, especially those who’ve been through bankruptcy, buying a home can feel out of reach.
Here’s the good news: home loans for discharged bankrupts do exist, offering a real chance for people to rebuild after financial hardship. A discharged bankrupt is someone who has completed their bankruptcy period and is no longer under legal restrictions. Their credit history may still show the impact, but some lenders provide loan options to help them move forward and buy a home.
This guide breaks down home loans for discharged bankrupts, what they are, how they work, and what to know in 2025 if you're planning to buy a home after bankruptcy.
Feeling overwhelmed after bankruptcy? Let our Queensland mortgage brokers simplify the path. We specialise in helping discharged bankrupts find lenders who say “yes.” Call (07) 3461 6499 or visit zestmortgagesolutions.com.au to get started today.
What Is a Discharged Bankrupt?
In Australia, bankruptcy is a legal process for people who can’t pay their debts. Once declared bankrupt, your finances are placed under strict control by a trustee. But this doesn’t last forever.
A discharged bankrupt is someone who has completed their bankruptcy period and is no longer under the legal restrictions that come with it.
For most people, this happens three years and one day after their bankruptcy was accepted by the Australian Financial Security Authority (AFSA). In some cases, this period can be extended if obligations aren’t met.
In Queensland, especially in areas like Logan, Ipswich, and parts of regional Brisbane, bankruptcy rates are higher than the national average. Rising living costs, job instability, and personal debt have pushed many households into financial distress in recent years.
For those who’ve gone through the process, becoming a discharged bankrupt marks the end of legal restrictions and the start of a new chapter. While you’re free to rebuild, it’s important to know that traces of the bankruptcy may still remain on your credit file for some time.
Can You Get a Home Loan After Bankruptcy?
You can technically apply for a home loan the day after you’re discharged from bankruptcy.
For most people, that’s three years and one day from when their bankruptcy was accepted. But just being eligible doesn’t mean you’ll be approved right away.
Lenders want to see what you've done since the discharge. That means having a stable income, paying your bills on time, and showing signs of financial responsibility.
Most lenders, especially non-bank and specialist lenders, prefer to wait at least 12 months after discharge before seriously considering your application.
When Lenders Consider Discharged Bankrupts
Not all lenders are willing to work with discharged bankrupts, especially major banks with stricter lending rules. But many non-conforming lenders and specialist providers do. They're more focused on your current financial behaviour than past credit events.
These lenders know that bankruptcy doesn’t define your future and that people can recover and manage a loan responsibly after discharge.
Key Factors Lenders Assess
Here’s what lenders usually look at when reviewing your application:
- Credit reports and history – They’ll check for improvements after the bankruptcy, such as no defaults, fewer enquiries, and on-time payments.
- Income and employment – A consistent job and steady income are essential. Some lenders may require a full 12 months in your current role.
- Time since discharge – The longer it’s been, the better. More time shows stability.
- Savings and deposit size – A larger deposit (15–20%) can improve your approval chances.
- Spending habits – Lenders will go over your bank statements, credit card balances, and general expenses.
- Current debts – They’ll check your debt-to-income ratio to make sure you’re not overcommitted.
These factors help lenders decide whether you’re ready for a mortgage, even with a not-so-good credit history.
Bank said no? You still have options. Our expert Queensland mortgage brokers match discharged bankrupts with flexible lenders offering real home loan solutions. Call (07) 3461 6499 or head to zestmortgagesolutions.com.au for a free chat.
Best Home Loan Options for Discharged Bankrupts
After bankruptcy, knowing where to start can be tough. A mortgage broker can guide you through the loan application process and help match you with lenders who assess your situation fairly.
Here are the main bankruptcy home loan options worth considering:
Specialist Lenders (Non-Bank Lender)
These are lenders who don’t follow major lenders' strict criteria. A non-bank lender like Pepper Money or Liberty focuses on your recent finances and uses a more flexible credit assessment process.
Non-Conforming Credit Home Loan
This loan type is made for those with poor credit scores, past defaults, or bankruptcy. While the loan term may come with higher interest, it’s a realistic path to homeownership when banks say no.
Low-Doc Loans
If you're self-employed or don’t have a full tax return or formal financial statement, a low-doc loan allows you to apply using bank statements or BAS statements. These loans still follow specific eligibility criteria, so a strong income stream is key.
Debt Consolidation Loan
Before applying for a mortgage, some discharged bankrupts use a debt consolidation loan to combine their personal loan, credit card, and other debts into one. This simplifies loan repayments and shows lenders you’re serious about managing your finances.
Basic Home Loan
This credit home loan has no extra features, just simple terms and lower rates. It’s a great fit if you meet the credit provider's income and eligibility criteria, and have shown good financial habits since discharge.
Each option above suits different situations. The right match depends on your current financial position, documentation, and how much time has passed since your discharge.
How to Apply for a Home Loan for Discharged Bankrupts
Applying for a mortgage after bankruptcy might feel overwhelming, but it doesn’t have to be. With the right guidance and understanding of each step, you can move through the loan process with confidence.
Here’s what you can do:
1. Assess Your Financial Position
Before starting your loan application, review your financial history and understand your current borrowing power. Gather details about any unsecured debt, credit card debts, or tax debt, and speak to a tax adviser if needed.
2. Check Your Credit Rating
Order your report from a credit reporting agency like Equifax to see what lenders will see. If you’ve had late payments, bad credit score issues, or multiple credit applications, it’s best to address these first.
3. Get Personalised Tax Advice
A qualified tax adviser can help you sort out any unresolved tax debt or payment plans, which may affect your eligibility for a standard loan or specialised loan options. Some lenders will want to see this resolved before offering a loan product.
4. Identify the Right Type of Loan
Discharged bankrupts often don’t qualify for standard home loans or regular mortgages right away. Look into non-conforming Loans, low-doc home loans, asset finance loans, or package home loans, depending on your income and documentation. Each type of loan has different lending limits and conditions.
5. Get Pre-Approval
This is also called conditional approval, and it helps you know your actual interest rate and borrowing range before shopping for property. Be sure to factor in possible variable rates and whether the lender charges Lenders Mortgage Insurance (LMI); this may apply if your deposit is under 20%.
6. Submit Your Loan Application
Once you’ve chosen a loan product, your broker will guide you through the loan setup. You’ll need to submit documents including payslips, bank statements, credit products, existing types of debt, and any paperwork explaining your bankruptcy history.
7. Pass the Lender’s Assessment
Lenders will assess your income, expenses, credit rating, and past credit applications. If you're applying for a standard mortgage, they’ll apply traditional lending criteria, which can be strict. But if you're going for a specialised loan, lenders may use more flexible criteria.
8. Receive Unconditional Approval
Once approved, you’ll get a formal contract from the credit provider stating the loan amount, mortgage payment schedule, and loan term. Review carefully before signing, especially if it’s a non-conforming loan with higher rates or fees.
9. Finalise the Property Purchase
After signing, your solicitor or conveyancer will handle settlement. At this point, the loan process ends, and your first mortgage payment date will be set. Make sure funds for stamp duty, fees, and LMI (if applicable) are ready.
10. Plan for the Future
Once you're in your home, keep track of your mortgage payment history and improve your financial habits. Over time, this can help you refinance into a standard mortgage or explore future loans under better conditions.
By understanding your options and preparing early, discharged bankrupts can access the right type of loan, even with a poor credit history.
Don’t let a discharged bankruptcy hold you back.
At Zest Mortgage Solutions, our Queensland mortgage brokers help real people with real financial history find home loan options that fit. Call us today on (07) 3461 6499 or drop by zestmortgagesolutions.com.au.
Frequently Asked Questions (FAQs)
What is the easiest home loan to get with bad credit?
Non-conforming loans from specialist lenders are usually the most accessible option for borrowers with bad credit or past bankruptcy.
How long do bankruptcies stay on a credit report in Australia?
Bankruptcy stays on your credit report for 5 years from the date you became bankrupt or 2 years after discharge, whichever is later.
How long after insolvency can I get credit?
You can apply for credit as soon as you’re discharged, but approval depends on your credit history, income, and lender criteria.
How much can I borrow as a discharged bankrupt?
This varies by lender, but most will assess your borrowing power based on income, debts, deposit size, and how long it’s been since discharge.
When can you apply for a home loan after bankruptcy?
You’re legally allowed to apply immediately after discharge. However, most lenders prefer a 12-month period of stable finances first.
Which lenders can help you after you're discharged from bankruptcy?
Specialist lenders like Pepper Money, Liberty, and non-bank providers are more open to helping borrowers with a bankruptcy history.
Wrapping Up
Getting back on track after bankruptcy isn’t always easy, but home loans for discharged bankrupts are absolutely possible in 2025 with the right help!
A mortgage broker’s role isn’t just about finding a lender. It’s about understanding your story, guiding you through the steps, and matching you with loan options that fit your current situation.
At Zest Mortgage Solutions, we offer a free consultation and real advice; no pressure, no judgment. We’ve got offices in Ipswich and Springfield, and we work with clients all across Queensland.
Ready to find out what’s possible? Call us on (07) 3461 6499 or visit zestmortgagesolutions.com.au to book your free chat today.
