Can I get a home loan if I'm self-employed?

Being self-employed does not make you a second-class borrower. It makes you a borrower whose income has to be proven differently. Mainstream lenders write full-doc loans for sole traders, partnerships, companies and trusts every day, at the same rates and the same maximum LVRs as a salaried applicant. What changes is the evidence, and how much of your real income survives the lender's method of counting it.

The standard path: two years of figures

The usual requirement is two years of personal tax returns with notices of assessment, plus business returns and financial statements where you trade through a company or trust, and an ABN and GST registration history. Lenders then take either the lower of the two years or an average, and many will cap growth — so if last year's profit doubled, expect the assessed figure to be more conservative than your best year. Recent Business Activity Statements or an accountant's letter can help support a strong current year.

Add-backs: the part most people miss

Lenders will add back expenses that reduce taxable profit but aren't a genuine drain on your ability to repay. Depreciation is the big one. Interest on debts being refinanced, one-off and non-recurring expenses, additional superannuation contributions above the required amount, net profit retained in a company, and sometimes a portion of motor vehicle or home office costs can all be added back. Add-backs routinely lift assessed income by a meaningful margin, and they're the single most useful thing a broker who reads financials properly brings to a self-employed file.

When two years isn't available

Several lenders will accept one year of returns, generally where your ABN has been active for longer than the business has been profitable, or where you've moved from employment to contracting in the same field. A smaller group work with two years of BAS plus business bank statements, or an accountant's declaration of income — historically called low-doc, now more accurately described as alternative documentation. These carry a rate premium and often a lower maximum LVR, and they are a legitimate stepping stone rather than a last resort: refinance to a full-doc product once your returns catch up.

The tax trade-off nobody warns you about

Minimising taxable income and maximising borrowing power pull in opposite directions. An accountant doing an excellent job on your tax return can halve what a lender thinks you earn. If a purchase is on the horizon in the next two years, that's a conversation to have with your accountant now — before the returns are lodged — not after you've been declined. We're happy to join that conversation.

What else lenders look at

Consistency of trading, the industry you're in, whether your income is contract-based or genuinely diversified, the health of your business accounts, and your ATO position. Outstanding tax debt or a payment arrangement with the ATO is treated seriously and needs to be disclosed and explained rather than discovered. Personal and business conduct on accounts matters too — overdrawn accounts and dishonours do more damage to a self-employed file than to a PAYG one.

How to make it straightforward

Get your last two years of returns, notices of assessment and financials together, along with your latest BAS and three months of business and personal statements. We read the financials, work out the add-backs, calculate the income the way each lender's policy calculates it, and then approach the lender whose method suits your structure. Self-employed files are where lender choice makes the largest difference to the outcome — often a six-figure difference in capacity on identical figures.

The information on this website is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information you should consider whether it is appropriate for you. Terms, conditions, fees, charges and normal lending criteria apply. Rates are subject to change.