Self-Employed Home Loans: A Complete Guide
Around 2.1 million Australians are self-employed. Getting a home loan is absolutely achievable, but requires more documentation and preparation than a PAYG employee.
What Lenders Look For
Self-employed borrowers are assessed differently because income can be variable and less transparent. Lenders typically require:
- 2 years of personal tax returns and Notices of Assessment
- 2 years of business tax returns and financial statements
- An accountant's letter confirming the nature and stability of your business
- BAS statements for the past 1–2 years
- Business bank statements (3–12 months)
How Is Income Calculated?
Lenders typically use a 2-year average of your taxable income, or the lower of the two years for conservative assessments. This is important — if you've had one strong year and one weak year, you may be assessed on the average.
Tip: Keep your income declarations as high as possible in the 2 years before applying. Minimising tax may feel smart short-term, but it reduces your reported income and borrowing power.
Low Doc Loans
If you can't provide 2 years of full financials, some lenders offer low doc loans, which may only require:
- 12 months of BAS statements
- An accountant's declaration
- Business bank statements
Note that low doc loans typically come with slightly higher interest rates.
How to Maximise Your Chances
- File your tax returns on time and keep them up to date
- Maintain clean business bank accounts with consistent deposits
- Build a strong savings history to demonstrate financial discipline
- Reduce personal debts before applying
- Work with a specialist broker — not all lenders are self-employed-friendly
Which Lenders Are Self-Employed Friendly?
Some lenders are significantly more flexible than others when it comes to self-employed borrowers. Non-bank lenders and specialist lenders often have more pragmatic policies than the big four banks. A Loan Rocket broker specialises in finding the right lender for your self-employment situation.