A single mum left broke and homeless following her divorce has built herself a new home for less than $15,000.

Charlotte Sapwell, 27, a mother of two from Victoria, Australia, was on the brink of homelessness following her divorce.

She changed her life by building a tiny home in her grandfather's backyard.

The Sun reports that Sapwell worked for five months to build the tiny 3m x 6m house for her and her two sons, aged 2 and 6.

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She built the house herself, with a little help from her grandfather who also loaned her the money. She managed to fund some of it by selling some of her belongings online.

She kept to a strict $14,600 budget.

The tiny home has a combined lounge room, kitchen, dining room, as well as a bedroom for Sapwell and a kids' room for the boys.

"I went from living in a massive home with my husband and kids to a tiny rented unit to this small space, and out of all the places I've lived this is my favourite," she told MailOnline.

"It is all mine. The kids are right there all the time and we are so close. Yes, it means we have virtually zero privacy from each other, but I love it."

The single mum says she has now "embraced minimalism".

"I don't know how long we will stay in this space, but I can't imagine living anywhere else but a tiny home now."

She says she will now build another tiny home - this one for her grandmother - and hopes to start her own business selling tiny houses.

"I just want other females to know they are capable of anything," she said. "Anyone can build their future."