Self Employed Home Loans for Australian Business Owners

Self Employed Home Loans: A Complete Guide for Australian Borrowers

Self employed home loans don’t have to be hard work, but they are different. If you run your own business, are a contractor, freelancer or sole trader, lenders will look more closely at your income, paperwork and cash flow than they would for a PAYG borrower.

This guide explains how self employed home loans work in Australia, what lenders want to see, and practical steps to help you get approved, whether you’re buying, refinancing or investing.

What is a self employed home loan?

A self employed home loan is simply a standard home loan where at least one applicant earns most of their income from a business, contracting, freelancing or sole trader work. The loan itself can be a normal variable or fixed home loan, what changes is how your income is assessed.

Lenders need to be confident you can afford your repayments even if your income fluctuates. That’s why home loans for self employed borrowers usually require extra documents and a closer look at your business performance.

You’ll see a few common terms:

• Home loans for self employed – general phrase for any home loan where the borrower is self employed

• Self employed home loan – often used by banks for their standard products with self employed assessment

• Low doc / alt doc home loan – loans that allow alternative income verification (like BAS, bank statements or an accountant’s declaration) instead of full financials, usually for business owners who don’t fit mainstream criteria

Can you get a home loan if you’re self employed?

Yes, you can get a home loan for self employed borrowers, including with major banks. Many big lenders now have specific self employed policies, streamlined assessment and even fast-track options with fewer documents where your situation is strong.

Approval comes down to:

• How long you’ve been in business

• How stable and consistent your income is

• How strong your financials and credit history look

• How much deposit you have and the property you’re buying

If those boxes are reasonable, a home loan self employed application can be very similar to a PAYG loan.

Full-doc vs low-doc self employed home loans

Most lenders offer two main paths for self employed home loans:

1. Full-doc self employed home loan (mainstream option)

This is where you provide the same kind of detailed financial information a bank would expect from any business:

• 1–2 years of personal tax returns

• 1–2 years of business tax returns

• Notices of assessment from the ATO

• Business financial statements (profit & loss, balance sheet)

• Recent bank statements (business and personal)

If everything stacks up and the numbers are consistent, you can usually access the same interest rates and features as salary earners, just with self employed assessment criteria.

2. Low-doc / alt-doc self employed home loan

Low-doc or alt-doc loans are designed for borrowers who can’t provide full recent financials – for example:

• Your most recent tax returns aren’t lodged yet

• Your income has grown quickly and old tax returns are misleading

• Your business structure makes it hard to show income clearly

Instead of full tax returns, lenders may accept:

• BAS statements

• Business bank statements

• Accountant’s income declaration

• Older tax returns plus supporting documents

These home loans for self employed borrowers often come with tighter policies (lower maximum LVR, higher deposit, slightly higher interest rate or fees), so they’re best used as a stepping stone until your financials catch up.

Who counts as “self employed” for home loan purposes?

Lenders generally treat you as self employed if:

• You’re a sole trader, contractor or consultant

• You’re a company director or run a trust

• You earn most of your income from business profits, distributions or invoices

• You work as a freelancer with ABN income

If you have both PAYG and business income, some lenders may still treat you as self employed, especially if your business income is significant.

Basic eligibility checklist for self employed home loans

While each lender has its own rules, most self employed home loan policies look for:

• Time in business – often at least 1–2 years of trading with an ABN; some lenders need 2 full financial years, others may work with 1 year at lower LVRs.

• Stable or growing income – big drops may be a red flag.

• Up-to-date tax returns and ATO obligations – especially for full-doc.

• Clean credit history – late payments or defaults will be scrutinised.

• Acceptable LVR (loan-to-value ratio) – lower LVR gives lenders more confidence.

• Genuine savings – cash reserves and buffers always help.

If you’re unsure how you stack up, a broker can map your situation against lender policies before you apply.

What documents do you need for a self employed home loan?

For a full-doc home loan for self employed borrowers, expect to provide:

Personal & business financials

• 1–2 years of personal tax returns

• 1–2 years of business tax returns

• ATO Notices of Assessment

• Profit & loss statements and balance sheets

Bank & BAS statements

• 3–6 months of business bank statements

• 3–6 months of personal bank statements

• BAS statements where needed

Business details

• ABN and (if applicable) GST registration

• Details of your business structure

• Any existing business loans or leases

For low-doc / alt-doc self employed home loans, lenders may rely on:

• BAS statements

• Business bank statements

• Accountant’s declaration

• ATO portal snapshots

Getting these ready early can speed up your application significantly.

How much can a self employed borrower borrow?

Your borrowing power with a home loan self employed application is based on the same principle as any home loan: income vs expenses.

Most lenders will:

• Look at your net profit plus salary or drawings

• Average your income over the last 1–2 years

• Sometimes use the lower year if income has dropped

• Add back certain non-cash or one-off expenses

Your deposit also matters:

• A 20% deposit (80% LVR) opens up more lenders and helps avoid LMI

• Specialist lenders may allow higher LVRs but with tighter criteria

7 steps to getting a self employed home loan

1. Get your financials in order

Keep tax returns, BAS and financial statements up to date.

2. Separate business and personal accounts

This makes your income much clearer to lenders.

3. Check your credit score

Correct any errors before applying.

4. Work out your budget and deposit

Borrow based on what’s comfortable even in slower months.

5. Choose between full-doc and low-doc

Stronger financials = mainstream lenders with sharper rates.
Less documentation = low-doc specialist lenders.

6. Compare lenders (or use a mortgage broker)

Policies vary widely, so matching your situation to the right lender is key.

7. Apply and respond quickly

Fast responses keep your application moving smoothly.

Common self employed home loan scenarios

Self employed under 2 years

Options may still exist, especially with:

• Industry experience

• Strong BAS and bank statements

• A larger deposit

Fluctuating income

Many business owners have seasonal income. Clear explanations and supporting documents help lenders understand your true earning capacity.

Refinancing or cash-out

Many self employed borrowers refinance to consolidate debt or access equity for business growth or investment.

Risks and things to watch out for

• Higher rates or fees for some low-doc loans

• Borrowing too aggressively during peak income periods

• Tax planning vs borrowing power – declaring low taxable income reduces borrowing capacity

• Cash-flow pressure – ensure your business remains stable after loan approval

How a mortgage broker can help self employed borrowers

A broker can:

• Identify lenders who are self employed–friendly

• Compare full-doc vs low-doc options

• Help present your income clearly

• Explain policy differences across lenders

• Manage paperwork and negotiations

For many self employed clients, this can be the difference between approval and decline.