Being self-employed doesn't stop you getting a home loan, but lenders check your income differently. They usually want to see your tax returns, or other records such as BAS and business bank statements. This page explains how lenders assess self-employed income and how to prepare, with links to the official sources.
Who this is for
- Sole traders and contractors working on an ABN
- Owners of a company or trust that runs a business
- Tradies, consultants and other small business owners
- Rideshare, delivery and other gig workers
How do lenders work out your income?
Lenders have to make reasonable inquiries about your financial situation and take reasonable steps to check it. That's part of the responsible lending rules ASIC oversees. For self-employed borrowers, it means showing your income in one of two broad ways:
| Type of loan | How income is usually shown |
|---|---|
| Full doc (standard) | Personal tax returns and notices of assessment, plus business tax returns and financial statements if you trade through a company or trust |
| Alt doc or low doc | Business activity statements (BAS), business bank statements or an accountant's declaration, instead of full tax returns |
In ASIC's 2014 review of low doc lending, lenders confirmed self-employment by checking that the ABN had been registered for at least six months, and GST registration where it applied. They checked income using an accountant's statement, BAS or business bank statements covering six to twelve months. Each lender sets its own rules today, so they vary.
Low doc loans in plain English
Moneysmart describes a low doc loan as one that needs less paperwork to prove your income, assets and debts than a standard loan. They're typically used by self-employed people. They usually have higher interest rates, and some have terms that limit what you can do. A low doc loan can suit you if your tax returns aren't up to date, but it's worth checking whether a full doc loan is possible first.
Things that help your application
- Lodge your tax returns on time. Your most recent return and notice of assessment are often the first things a lender asks for.
- Register for GST if you need to. The ATO requires it once your GST turnover reaches $75,000. Where you're registered, lenders may check it.
- Keep business and personal money separate. A separate business account makes your income easier to see.
- Keep personal debts down. Credit card limits and car loans reduce how much you can borrow.
- Check your ABN date. ABN Lookup shows when your ABN became active, and lenders can see it too.
Guides for your situation
- Can I get a home loan with a 1-year ABN? Some lenders consider self-employed borrowers with about 12 months of ABN history. What they look at, the documents you'll need, and full doc vs low doc.
- What is a low doc home loan, and is it right for me? Low doc loans let self-employed borrowers show income with BAS, bank statements or an accountant's letter. How they work, what they cost, and the alternatives.
Calculators
- Borrowing power calculator Estimate how much you could borrow from your income, expenses and debts, using the same 3% buffer lenders use.
- Mortgage repayment calculator Work out weekly, fortnightly or monthly repayments and the total interest, principal and interest or interest-only.
- Offset account calculator See how much interest your savings in an offset account could save, and how much sooner you could pay off the loan.
- Extra repayments calculator See how much interest extra repayments could save, and how much sooner you could own your home.
- Interest-only vs principal and interest calculator Compare interest-only and principal and interest repayments, and see the extra interest over the loan.
- Refinance calculator Compare your current loan with a new rate: the change in repayments and interest, and when the switching costs are covered.
- Equity calculator Work out your equity and LVR, how much equity you might be able to use, and what it could mean for buying another property or your next home.
- NSW stamp duty and First Home Guarantee calculator Work out NSW stamp duty, including first home buyer exemptions and the foreign buyer surcharge, and check the First Home Guarantee.
- Can I get a home loan? Check your situation Five quick questions on your visa, income, credit history and deposit: see what lenders usually look at for someone like you.
How MoneyGenie helps
- Works out which lenders suit how long you've had your ABN and the records you already have.
- Explains how each lender is likely to calculate your income before you apply.
- Helps you get your documents in order with your accountant, so your application is complete first time.
Nabita compares options from MoneyGenie's panel of 35+ lenders, tells you upfront which are realistic for your situation, and handles the application with you through to settlement. Our service is generally at no cost to you, as we're paid a commission by the lender, which we disclose to you upfront. Details are in our Credit Guide, available on request. Talk to Nabita: call 040 110 1608 or send an enquiry.
Call 040 110 1608 Send an enquiryFrequently asked questions
Can I get a home loan if I'm self-employed?
Yes. Many lenders lend to self-employed people. The difference is how they check your income: usually through your tax returns, or for some loans through BAS, business bank statements or an accountant's declaration.
What is a low doc loan?
A low doc loan needs less paperwork to prove your income than a standard loan. Moneysmart notes they're typically used by self-employed people and usually have higher interest rates, so compare them carefully.
Do I need two years of tax returns?
Many lenders want two years of tax returns for a standard (full doc) loan. Some will consider around 12 months of ABN history, usually with at least one year's tax return or BAS.
Last reviewed by Nabita, mortgage broker, MoneyGenie Finance.
Official sources
The rules and figures on this page were checked against the official sources above on the review date. Government rules and lender policies change, so check your own situation with us or the relevant authority before acting.