Self Employed Home Loans
How self employed borrowers get approved, what income lenders accept, and why the right lender choice changes everything, explained by an Adelaide mortgage broker.
Self employed borrowers can absolutely get a home loan, but lenders assess your income differently to a salaried applicant. Most use your tax returns and financial statements, while some accept alternative documentation. Because every lender treats business income and add backs differently, the lender you choose matters far more than it does for a salaried borrower.
Why one lender says no and another says yes
The most common frustration for self employed borrowers is being declined by one lender and approved comfortably by another on the same figures. It comes down to how each lender treats business income, add backs and the age of your financials. Matching you to a lender that suits your structure is the whole game.
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Self Employed Home Loans: common questions
Can I get a home loan if I am self employed?
Yes. Self employed borrowers can and do get home loans every day. The main difference is how you prove your income. Instead of payslips, lenders look at tax returns, business financials, or for low doc loans, alternative proof such as an accountant letter or BAS.
How long do I need to be self employed to get a home loan?
Many lenders prefer two years of self employment, but it is not a hard rule everywhere. Some lenders will consider one year of figures, and a few will look at borrowers with a shorter history if the broader picture is strong.
What documents do self employed borrowers need for a home loan?
For a full doc loan, lenders usually want your two most recent personal tax returns and notices of assessment, and often your business tax returns and financial statements. For a low doc loan, the proof is lighter, such as an accountant letter, BAS, or business bank statements.
What is a low doc home loan for self employed borrowers?
A low doc home loan lets self employed borrowers prove income with alternative documents rather than full tax returns. Acceptable proof can include an accountant letter, recent BAS, or business bank statements, depending on the lender.
Can I get a home loan with one year of tax returns?
Often yes. While many lenders prefer two years, a number will assess self employed borrowers on a single year of tax returns, especially where the figures are strong and the business is established in the same field you worked in before.
How do lenders calculate income for self employed borrowers?
Lenders generally take your net business profit, then apply their own rules. They often add back certain non cash or one off expenses such as depreciation and interest, and they may average two years or use the most recent year if it is lower.
Can I get a home loan with an ABN?
Yes. Holding an ABN is normal for self employed borrowers. Lenders will usually want to see how long the ABN has been active and registered for GST where relevant, alongside your income evidence. Some low doc lenders accept an ABN active for as little as 12 months.
Do self employed borrowers pay higher interest rates?
Not necessarily. If you can provide full documentation, you can often access the same rates as a salaried borrower. Low doc loans, where income is proven by alternative means, may carry a higher rate to reflect the lighter verification.
How much deposit do self employed buyers need?
On a full doc loan, self employed buyers face the same deposit expectations as anyone else, often from around 5 to 20 percent depending on the lender and whether lenders mortgage insurance applies. Low doc loans usually ask for a larger deposit, commonly around 20 percent.
Can I use add backs to increase my borrowing power?
Often yes. Add backs are legitimate expenses in your financials that a lender adds back to your net profit to reflect your true cash flow. Common examples include depreciation, one off costs, and certain interest. They can meaningfully lift your assessable income.
Can I get a home loan if my tax returns are not finalised?
Possibly. If your latest returns are not lodged, some lenders will consider recent BAS, business bank statements, or an accountant letter under a low doc arrangement, rather than waiting for the tax to be finalised.
Can sole traders get a home loan?
Yes. Sole traders are assessed much like other self employed borrowers, usually on personal tax returns and notices of assessment, since the business income flows through to you personally. Low doc options are also available where returns do not yet tell the full story.
Can I get a home loan if my business is new?
It is harder but not impossible. With under a year of trading, options narrow, but some lenders will consider a new business where you have strong prior experience in the same field, a healthy deposit, and evidence of steady income.
Will my business debt affect my home loan?
It can. Lenders look at business and personal commitments when assessing your capacity. Some business debt can be excluded if it is genuinely serviced by the business and documented, but unmanaged or personal style debt will usually reduce your borrowing power.
Should self employed borrowers use a broker?
It often helps. Because lenders assess self employed income so differently, a broker can match your figures to the lender most likely to read them favourably, and package the application correctly. For first home buyers there is generally no fee, as the lender pays the broker.
General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.