Quick answer
A farm loan with off-farm income is rural lending where part of the household's repayments comes from wages, a partner's job, contract work or another business rather than the farm itself. Lenders will usually count it, but how much depends on the type, stability and evidence. Ownright arranges these loans Australia-wide and prices each on circumstances.
Key points
- Many Australian farm households rely on off-farm work
- Lenders often accept wages, partner income and side-business earnings
- Stable, documented income counts for more than irregular cash
- It can help hobby, lifestyle and part-time farms qualify
- Ownright knows which lenders give off-farm income proper weight
- Suits
- Part-time farmers, new entrants, households with a second job or business
- Income types
- PAYG wages, partner income, contracting, rental, side business
- Security
- Rural land and improvements
- Australia-wide
- Yes
How do lenders treat off-farm income?
Off-farm income is money the household earns away from the farm enterprise: a wage, a partner’s salary, contracting work, a side business, rental income. Many lenders count at least some of it toward repayments on a farm loan, and in many households it is the reason the whole arrangement stacks up.
It reflects how a lot of Australian farm households actually live. ABARES surveys of farm financial performance have long tracked income earned away from the farm business alongside farm income, because for many families the two together make a sustainable livelihood. A lender who only looks at the farm’s own profit misses half the picture.
Who does this suit?
- Part-time farmers with a job in town or a mining, health, trades or government role
- Couples where one partner farms and the other works off-farm
- New entrants buying a first property with limited farm trading history
- Hobby and lifestyle farm owners, see lifestyle and hobby farm loans
- Established farms through a lean run, supported by another income
- Producers who run a second business such as contracting, tourism or a market stall
If your farm is the full income and you have complete financials, a standard farm loan may be simpler.
What counts as off-farm income, and how strong is each type?
| Income type | How lenders tend to see it |
|---|---|
| Permanent PAYG employment | Strong and easy to document with payslips |
| Partner’s salary | Usually counted, with the partner on the loan |
| Contract or casual work | Counted once it has a track record |
| Own side business | Needs tax returns or an accountant’s letter |
| Rental or investment income | Often counted, sometimes at a reduced share |
| Government payments | Treatment varies by type and lender |
| Seasonal work | May be averaged or discounted |
Every lender sets its own policy, which is why two lenders can look at the same household and reach opposite conclusions. A broker’s job is to find the one whose rules suit your income mix.
What do lenders look at beyond income?
- The security. Rural land has to be saleable and suited to the lender’s policy. Size, location and use matter.
- Household expenses. Living costs, school fees, other debts and dependants.
- Farm viability. Even when off-farm income supports the loan, some lenders want to see that the farm is not a drain.
- Credit history. Defaults and arrears still count, though specialist lenders assess them differently.
- Employment stability. Length of service, probation periods and contract end dates.
- Deposit or equity. How much of the purchase or refinance is covered by existing equity.
How does Ownright help?
Ownright is about finding the lender who reads the whole file rather than ticking boxes. Trevor Scott has more than 40 years in finance, and the team regularly handles households with several income streams spread across entities. We know how different lenders treat a part-time farm and which ones consider a nurse’s wage, a truck driver’s pay or a partner’s consulting income in a fair light.
We arrange finance in every state and territory. If you are not sure whether your mix of income will work, send us your situation and we will give you a straight answer on the likely paths.
An illustrative example
This is illustrative only, with no real client. A couple with a small beef herd on a grazing block earn most of their income from a health-sector job and a trades business. The farm barely breaks even. A bank looks only at the farm accounts and declines a refinance. A lender that accepts household income, including the PAYG wage and the tradie business with recent tax returns, assesses the full picture and a facility is arranged that suits their combined cash flow.
Mistakes to avoid
- Leaving a partner off the application when their income is a key part of the file
- Presenting off-farm income without payslips, tax returns or contracts to back it
- Overstating farm income in the hope it will lift the application
- Changing jobs or starting a new contract just before applying, when a settled period would help
- Applying to a lender whose policy discounts the very income you rely on
Documents to have ready
- Two most recent payslips and a recent employment letter for each wage earner
- Last two years’ tax returns and notices of assessment for each borrower
- Partner’s income evidence, if they are on the loan
- Business accounts or an accountant’s letter for any side business
- Rental statements for any investment property
- Farm records such as sales summaries, stock lists and production data
- Details of existing loans and the property you want to borrow against
If farm records are thin, our low doc farm loans page explains how alternative documents can be used. Our guide on off-farm income and farm lending goes through the topic in more depth.
Buying a property with off-farm income
If you plan to buy, the same ideas apply, and a first purchase is often where off-farm earnings do the heavy lifting. See farm purchase loans for how purchases are structured, including deposits and bridging while a current home is sold.
Which parts of a mixed household income do lenders discount most?
Lenders rarely accept every dollar of every stream at face value. Typical patterns, which vary by lender, include:
- Overtime, bonuses and allowances being averaged over a longer period or counted at only a portion
- Second jobs being considered only after they have run for a reasonable time
- Rental income being shaded to allow for vacancies and costs
- Newly started side businesses needing at least one lodged tax return before they carry weight
- Seasonal or fly-in fly-out rosters being assessed on actual annual earnings rather than a single pay
Knowing this before you apply lets you present the file in its strongest form. A household with a permanent wage and a long-running side business is a different proposition to one with several short contracts, even if the totals are similar.
How do lenders weigh a farm loss against off-farm income?
Farm profit swings with prices, rain and costs, so a loss in one year is not unusual. What lenders want to understand is whether the loss is a one-off, such as a dry season or a one-time purchase, or a pattern. Some assess the household as one unit and set the farm result against the wages. Others calculate the farm separately and only then add outside income. A few will look at the farm’s cash result rather than its taxable result, since depreciation and stock changes can distort the picture.
Presenting an accountant’s commentary alongside the numbers often helps, particularly where the farm is still being built up, for example through new fencing, water or pasture work that has not yet paid back.
What changes if you are on a drought or hardship payment?
Support such as Farm Household Allowance exists to help farming families through hard times, and Services Australia explains who can apply. Lenders treat these payments with care because they are time-limited and tied to circumstances. They may be excluded from serviceability or counted only in part. If you are receiving support and are considering a refinance, say so at the start so the right lender is chosen. Our drought finance page covers the wider options.
Does the type of farm change how off-farm income is used?
| Type of holding | Role of off-farm income |
|---|---|
| Lifestyle block or hobby farm | Often the main source of repayments |
| Small grazing property | Frequently supports the loan while the herd builds |
| Broadacre farm with a partner working in town | Smooths out poor seasons |
| Horticulture or vineyard in establishment | Carries the household while plantings mature |
| Large commercial operation | Usually secondary, with farm cash flow leading |
If your property is at the commercial end, rural business loans may be the closer fit.
How do state and regional differences come into it?
Off-farm work looks different across Australia. In parts of Queensland and Western Australia, mining and resources rosters are a common second income. In Victoria and Tasmania, many households combine a small property with health, education or trades work in a nearby town. In the Northern Territory and remote regions, work may be seasonal or contract-based. Lenders vary in how comfortable they are with each pattern and with the distance between the borrower, the property and the lender’s branch. Ownright knows which lenders handle which, and we arrange finance in every state and territory. See loans in regional and remote Australia for more.
What questions should you ask your accountant first?
- Is household income reported clearly across individuals and entities?
- Are any tax returns outstanding that a lender will expect to see?
- Would restructuring how income is paid change how lenders view it, and over what timeframe?
- Is there a clear explanation for any dip in farm or side-business profit?
A tidy set of returns and a short covering letter often does more for an application than any amount of explaining on the phone.
Ready to find out where you stand?
Your household income does not have to come from the paddock to count. Tell us how you earn and we will explain how lenders are likely to see it.
How it works, step by step
- 1
Step 1
We map every income stream in the household, on-farm and off, and how each is documented.
- 2
Step 2
We work out how different lenders are likely to treat each stream, since policies vary widely.
- 3
Step 3
Ownright presents the file to lenders who accept off-farm income properly and understand part-time farming.
- 4
Step 4
You pick the offer that fits, and we manage the process through valuation and settlement.
Frequently asked questions
Can off-farm income be used to qualify for a farm loan?
Yes, in many cases. Lenders commonly consider wages, a partner's income, contracting earnings and rental income when assessing a farm loan. How much of it they count, and what evidence they need, varies by lender, so choosing the right one matters.
What counts as off-farm income?
Typically any household income not generated by the farm enterprise itself, such as PAYG employment, a partner's salary, a separate business, contract work, investment or rental income. Government payments are treated differently depending on type and lender.
Does a hobby or lifestyle farm qualify differently?
Often yes. Lifestyle properties are commonly assessed on household income because the land is not the main earner. Our lifestyle property loans page covers that, and off-farm income is usually central to those applications.
Is casual or seasonal off-farm work accepted?
Sometimes, but lenders tend to want a track record, usually shown through payslips and tax returns. Irregular income may be averaged or discounted. Contract and casual work are easier to place when they have continued for a while.
How does off-farm income help if the farm made a loss?
A farm loss can drag down a standard serviceability calculation, but strong off-farm income can offset it. Some lenders handle this far better than others, and we know which ones tend to look at the household as a whole.
What if my partner's income is the main support?
That is common. Lenders usually assess both borrowers, and it helps if the partner is on the loan. Their income, expenses and credit history will all be considered.
Can off-farm income help with a farm refinance?
Yes. A household with stable off-farm earnings may qualify for better terms or a longer repayment structure, since the loan does not depend entirely on farm results.