Self Employed Loans
Clear advice | Better options | No confusion
Self employed borrowers often get told their situation is more complicated, but that does not mean your options are limited.
At The Mortgage People, we help self employed borrowers understand their loan options more clearly, what may be possible and what may make sense based on their situation.
Whether you are a sole trader, contractor, company director or business owner, the right loan often comes down to understanding how lenders view your income and what documents you can provide.
At The Mortgage People, we help self employed borrowers understand their loan options, what may be possible and what may make sense for their situation.
The Challenge Usually Isn't Being Self-Employed. It's How the Lender Looks at Your Income.
If you run a business, work as a contractor or earn income through a company, your home loan application may be assessed differently to someone earning a standard salary.
That can mean more questions around your income, trading history, financials and the way your business is structured. It can also mean one lender may view your position very differently from another.
Three Things Usually Shape Your Options
Your Income
How you pay yourself, what the business earns and how consistently that income has been generated.
Your Documentation
Tax returns, financials, BAS, business bank statements or other evidence that may support the application.
The Lender's Policy
Different lenders can have different rules around trading history, income calculation and acceptable documents.
Self-employed income can be assessed differently from lender to lender
There is no single formula every lender uses for self-employed borrowers. The way your income is calculated can depend on your business structure, trading history, financial results and the lender's own policy.
Trading history
How long you have been operating can matter. Some lenders may want a longer financial history, while others may have options for borrowers with a shorter period in business.
Business structure
Sole traders, partnerships, company directors and other business structures can be assessed differently depending on how income is earned and distributed.
Financial performance
Lenders may look at tax returns, financial statements, business income and expenses to understand how the business has performed over time.
Your overall position
Existing debts, living expenses, credit card limits, deposit or equity and the amount you want to borrow can all affect the final assessment.
Full doc or alternative doc?
Not every self-employed borrower needs to follow the same documentation pathway. The right approach depends on your circumstances, the information available and the lender's criteria.
Full documentation
A full doc application generally uses a more complete set of financial information to demonstrate income.
- Personal and business tax returns
- Financial statements
- Notices of assessment
- Other supporting documents required by the lender
Alternative documentation
Some lenders may offer alternative ways for eligible self-employed borrowers to demonstrate income where standard documentation does not reflect their current position.
- BAS statements
- Business bank statements
- Accountant declarations
- Other acceptable business income evidence
A no from one lender doesn't necessarily tell you what another lender will do
Self-employed lending policies can vary. One lender may calculate income differently, require a longer trading history or ask for documents another lender does not.
That's why comparing lenders can be particularly important when you work for yourself. The aim is not simply to find a lender willing to approve the loan. It is to find an option that fits your circumstances and what you are trying to achieve.
How will the lender calculate my usable income?
Does my trading history meet their requirements?
What documents will they accept?
Does the loan structure suit my longer-term plans?
Your business doesn't define your home loan goal
Being self-employed may change how your application is assessed, but the reason you are borrowing could be exactly the same as anyone else.
Buying a home
Understand your borrowing position and compare home loan options suited to your circumstances.
Buying your first home
Get clear on how your self-employed income may be assessed before you start making offers.
Refinancing
Review whether your current mortgage still suits you and whether another lender may offer a better fit.
Buying an investment property
Understand how your business income and existing commitments may affect your investment borrowing position.
Want a starting point on the numbers?
Our calculators can help you get an initial feel for borrowing power and repayments before speaking with Martin.
Calculator results are estimates only. Self-employed income can be assessed differently between lenders, so the result may not reflect what a particular lender is prepared to offer.
A clearer path from business income to home loan
The process starts with understanding your situation properly before deciding which lender or loan may suit.
Understand your situation
We start with what you're trying to achieve, your business structure and how you earn your income.
Work through the numbers
We look at income, commitments, deposit or equity and the documents you have available.
Compare suitable lenders
We consider lender policies and options that may better match your circumstances.
Prepare the application
Once you've chosen how to proceed, we help organise the application and supporting information.
Approval and settlement
We stay involved through assessment, approval and settlement.
Your home loan doesn't need to feel more complicated than your business
Whether you're ready to apply or simply want to understand how lenders may look at your income, start with a conversation. Martin can help you work through the numbers, documentation and lender options so you have a clearer idea of what may be possible.
Talk to Martin about your options →Not ready to apply?
That's completely fine. You don't need to have every document organised or know which lender you want before having the first conversation.
Frequently Asked Questions
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Yes. Self-employed borrowers can apply for home loans in much the same way as employed borrowers, but the lender may assess income differently. Instead of relying mainly on payslips, they may look at tax returns, financial statements, business income, BAS or other supporting information depending on the lender and loan type.
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It varies between lenders. Some may look at one or two years of financials, while others may consider different combinations of business income, salary, profit, add-backs and other acceptable evidence. Your business structure and trading history can also affect the assessment.
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Not always. Some lenders prefer a longer financial history, while others may consider borrowers with a shorter period in business depending on the circumstances. If you do not have two full years of tax returns, it may still be worth reviewing which lenders and documentation pathways could suit your position.
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Potentially. This can be more limited because many lenders want to see an established trading history, but some lenders may consider a shorter period depending on your industry, previous employment, financial performance and overall application.
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The documents required depend on the lender and type of application. They may include personal and business tax returns, financial statements, notices of assessment, BAS, business bank statements and other evidence of income. Understanding what you have available before applying can help identify lenders whose requirements may better suit your situation.
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An alternative documentation, or alt doc, home loan may allow eligible self-employed borrowers to demonstrate income using different documentation from a traditional full-doc application. Depending on the lender, this could include BAS, business bank statements or an accountant declaration. Alt doc does not mean no income verification, and lending criteria, rates and acceptable documents vary between lenders.
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Your borrowing capacity will depend on the income a lender is prepared to use as well as your existing debts, living expenses, credit limits, dependants, deposit or equity and proposed loan. Because lenders can assess self-employed income differently, borrowing capacity can vary between lenders. Our Borrowing Power Calculator can provide an initial estimate.
