Self-Employed Home Loans: Secure Your Dream Home While Running Your Business

Being self-employed does not make getting a home loan impossible. With the right strategy and preparation, you can improve your chances of approval. Unlike salaried employees, self-employed applicants need to provide extra financial documentation to prove income stability. Lenders may have stricter criteria, but there are loan options designed specifically for business owners, freelancers, and contractors.

For self-employed Australians looking to secure a home loan, Trusted Finance Solutions provides expert guidance and access to lenders who recognise the unique nature of self-employment income. Whether you have complete financial records or need a low-doc home loan, our team can guide you through the process and help you find a loan that suits your needs.

Can Self-Employed Individuals Get a Home Loan?

Self-employed borrowers can apply for home loans, but the process may require additional documentation and stricter income verification. Since self-employment often comes with fluctuating income, lenders take a different approach when assessing financial stability compared to those with a regular salary.

With the right preparation, securing a home loan is entirely possible. While it may take a little more effort, there are many loan options available for self-employed borrowers.

How Lenders Assess Self-Employed Home Loan Applications

Lenders assess self-employed home loans differently, as there is no fixed salary or standard payslip to verify income. Instead, they focus on a borrower’s overall financial stability, business performance, and repayment ability. Borrowers with strong financial records and a demonstrated ability to meet repayments could have access to competitive interest rates and higher loan amounts.

Key factors lenders assess include:

• Business income trends – Consistency and stability matter more than one-off high earnings.
• Cash flow and expenses – Lenders consider both revenue and outgoing costs.
• Taxable income – A low taxable income due to deductions can affect borrowing power.
• Industry and business history – A longer business history may improve lending prospects.

What Income Documents Do Self-Employed Borrowers Need?

Self-employed home loan applicants must provide additional documentation to verify income and business stability. Lenders assess these documents to determine financial health and repayment capacity. However, requirements can vary between lenders, with some being more flexible than others, especially for low-doc or alternative documentation loans.

Commonly required documents include:

• Personal & business tax returns (last two years).
• Profit & loss statements from an accountant.
• Business Activity Statements (BAS).
• Personal and business bank statements.
• A letter from an accountant verifying financial position (if required).

Self-Employed Home Loan Options

Self-employed borrowers in Australia have access to various home loan options tailored to different financial situations. Whether you have full financial records or require a more flexible approach due to irregular income, there are solutions available.

1. Full Documentation (Full Doc) Home Loans 

For self-employed borrowers with a steady income and complete financial records, a full doc home loan may provide access to a wider range of lenders, competitive interest rates, and more favourable loan terms. These loans follow a similar assessment process to standard home loans but require a more detailed review of your business finances. 

To apply, lenders typically require:

• At least two years of tax returns (both personal and business).
• An ATO Notice of Assessment to verify income.
• A Profit and Loss Statement detailing business income and expenses, prepared by a qualified accountant.
• Business financial statements demonstrating stability and consistent earnings.

2. Low Documentation (Low Doc) Home Loans

For borrowers without full tax returns, low doc home loans for self-employed may provide a more flexible alternative. These loans suit those with strong cash flow but limited documentation, though they often come with higher interest rates, stricter deposit requirements (10-20%), and conditions like a minimum of one to two years of self-employment.

Lenders may accept:

• BAS statements to verify revenue.
• Bank statements showing steady deposits.
• Accountant declarations confirming income.

3. Specialist Lender or Non-Bank Home Loans

For self-employed borrowers with irregular income, a short trading history, or credit challenges, specialist lenders offer non-conforming home loans with more flexible criteria. These loans can accommodate lower deposits, financial setbacks, or limited credit history, often allowing higher loan-to-value ratios (LVRs) with Lenders Mortgage Insurance (LMI). 

While these loans may be more accessible, self-employed borrowers could face higher interest rates or additional fees due to perceived lending risk. Still, they can be a good option for those who don’t meet traditional lending requirements.

Which Lenders Offer Home Loans for Self-Employed?

Many Australian banks and lenders offer home loans for self-employed borrowers, but their lending policies can vary significantly. Lenders evaluate risk in different ways, which can impact interest rates, LVR requirements, and eligibility criteria for self-employed home loans.

Here’s an overview of lender categories that offer home loans for self-employed in Australia:

• Major Banks (CBA, Westpac, NAB, ANZ) – Generally require full financial documentation but may have self-employed-friendly policies.
• Non-Bank and Specialist Lenders – More flexible with low doc home loans, suitable for those with non-traditional income verification.
• Credit Unions and Mutual Banks – May offer competitive rates for self-employed borrowers with strong financials.

Looking for the best self-employed home loans? Every lender assesses income differently, but an experienced mortgage broker can help in finding a loan that aligns with your financial situation. Get expert guidance today!

How Much Can You Borrow if You’re Self-Employed?

Borrowing power depends on income stability, deposit size, and financial commitments. Lenders often look for consistent business revenue, and a lower Loan-to-Value Ratio (LVR) could improve approval chances and potentially reduce the need for Lenders Mortgage Insurance (LMI). Most self-employed borrowers can access up to 80% LVR without LMI, though higher LVRs may be possible with extra financial proof.

A strong credit history and low debt levels can also enhance eligibility. For a quick estimate, try an online mortgage calculator, but for a more accurate assessment, speaking with a mortgage broker is recommended.

How Much Deposit Do You Need?

Self-employed borrowers typically need a 10%–20% deposit, though borrowing over 80% LVR may require Lenders Mortgage Insurance (LMI). Some specialist lenders offer higher LVR options with alternative income verification.

Some government programs, like the First Home Guarantee (FHG), can help lower deposit requirements by allowing eligible first-home buyers to purchase a property with as little as a 5% deposit while avoiding LMI.

Home Loan Options for Newly Self-Employed Borrowers

Starting a business doesn’t mean delaying homeownership. Lenders prefer two years of self-employment, but options exist for those with less. Understanding lender criteria and alternative income proof is key.

Home Loans for Self-Employed Under 2 Years

While most lenders prefer two years of self-employment history, some may consider borrowers with 12 to 24 months if they have at least one full year of tax returns. Alternative income verification, such as bank statements, BAS statements, or an accountant’s declaration, could be considered by some lenders. Relevant work experience in the same industry before becoming self-employed can help strengthen your application.

Home Loans for Self-Employed Under 1 Year

For those with less than 12 months of self-employment, securing a loan can be challenging, but some specialist lenders may assess income using bank statements, BAS statements, business contracts, or even an accountant’s letter instead of tax returns. A larger deposit, a solid financial history, or relevant industry experience may improve approval chances, though interest rates and conditions could still vary.

Finding the best home loans for self-employed is easier with expert support. Contact us today to explore your options and secure a loan that fits your needs.

Tips to Increase Your Chances of Approval

Getting a home loan when self-employed can take extra preparation, but improving financial stability, credit history, and income consistency may strengthen your application. Here’s how:

1. Maintain Updated Financial Records

Lenders assess self-employed income based on tax returns, profit and loss statements, and bank statements. Keeping accurate, up-to-date records may help demonstrate financial stability and improve your borrowing power.

2. Reduce Business and Personal Debt

Debt-to-income ratio plays a key role in how much you can borrow. Lowering your credit card balances, business loans, or personal debts before applying for a mortgage could help improve your eligibility and borrowing capacity.

3. Maintain a Good Credit Score

A strong credit history shows lenders that you’re responsible for repayments. Regularly paying off business expenses, loans, and tax obligations on time can help maintain a healthy credit score, which may improve your home loan options.

4. Show Consistent Income Growth

Lenders prefer self-employed borrowers with stable or growing incomes over at least two years. Even if your income fluctuates, demonstrating a general upward trend in earnings can boost lender confidence in your ability to manage mortgage repayments.

5. Consider a Guarantor

If your income history is shorter or your deposit is smaller, a guarantor home loan could improve your chances of approval. A family member can offer their property as security, reducing the lender’s risk and potentially helping you avoid LMI.

6. Work with a Mortgage Broker

Finding the right lender is especially important for self-employed borrowers, as policies vary between banks and non-bank lenders. A mortgage broker for self-employed can help by:

• Matching you with lenders who specialise in self-employed home loans.
• Identifying low doc and alternative income verification options if needed.
• Structuring your application to maximise approval chances and secure a competitive interest rate.

You Work for Yourself—Your Home Loan Should Work for You

Getting a home loan when you’re self-employed does not have to be complicated. It is about finding the right lender and presenting your finances in the best possible way.

At Trusted Finance Solutions, we understand the challenges self-employed borrowers face and work to find home loans that suit your needs. Whether you’re planning to buy or simply exploring your options, our experienced mortgage brokers in Melbourne are here to support you and help you find lenders familiar with self-employment income.

Get in touch today and let us help you find a loan that works for you.

Frequently Asked Questions

1. Do I need to separate my personal and business finances when applying for a home loan?

While it is not a strict requirement, separating your personal and business finances can help simplify the home loan process. Lenders will need a clear picture of your income, and having dedicated business accounts helps show consistent cash flow. It also simplifies the paperwork, making it easier to provide the financial documents required for your application.

2. Will refinancing be more difficult if I am self-employed?

Refinancing as a self-employed borrower may require additional documentation, but it is definitely possible. Lenders will assess your income stability and business performance, similar to a standard home loan application. If your financials are in good shape and you have a solid repayment history, you may even be able to secure a better rate or more flexible loan terms.

3. Do lenders require extra security or collateral for self-employed borrowers?

Most lenders do not require additional security beyond the property itself, but they may ask for a larger deposit if you are self-employed. If your financial situation is considered high risk, lenders may also require Lenders Mortgage Insurance (LMI) if your deposit is less than 20%. Providing strong financial records, a good credit score, and a stable income history can help improve your borrowing terms.

4. Can I get a home loan if my business is not profitable on paper but has a strong cash flow?

Yes, but it may be more challenging. Lenders focus on your taxable income when assessing your borrowing capacity, and if your business expenses significantly reduce your declared income, it could impact how much you can borrow. 

Some lenders consider bank statements or BAS statements to assess cash flow instead of tax returns. Low-doc home loans or specialist lenders may be a good option if your taxable income does not reflect your actual earnings.

5. Can I use rental income or other investments to strengthen my home loan application?

Yes, lenders may consider rental income, dividends, or other investment earnings when assessing your financial situation. However, they typically discount rental income by 20-30% to account for expenses. 

If you receive regular investment income, providing clear documentation such as tax returns, rental statements, or dividend records can help strengthen your application.