Self Employed Home Loans in Australia
Get home loan solutions for self employed borrowers, including small business owners, sole traders, freelancers, and contractors.'
- Low doc and full doc home loan options available
- Get approved with alternative documentation
- Access the same rates and terms as PAYG employees
Contact Our Team
Fill out our online form to apply for a self employed home loan. We'll get in touch with you fast to understand your situation and make a recommendation.
Submit Application
We'll expertly handle your application from start to finish.
Some lenders can approve self employed home loans in just hours.
Get Funded
Once approved, documentation is signed electronically, making settlement fast.
What are Self Employed Home Loans in Australia?
A self employed mortgage is specifically tailored for borrowers who earn their income through self employment rather than through a traditional PAYG salary. This includes a wide range of Australians, such as sole traders, small business owners, freelancers, and contractors.
Home Loan Eligibility for Self Employed Borrowers
To qualify for a home loan as a self-employed person in Australia, lenders typically look at:
Minimum Trading History
Most lenders require at least 2 years of self-employed history. Some may consider 1 year or less if your previous employment was in a related field.
Proof of Income
Demonstrating consistent income over time is important to demonstrate the capacity to repay the loan.
Credit History
There are bad credit loan options, but a good credit history provides access to more lenders and lower rates.
Deposit
Ideally, a 20% deposit is required for purchases (or 80% LVR max for refinances), but on rare occasions, some lenders will offer LVRs above 80%.
What Documents do Self Employed Borrowers Need For a Home Loan?
Self employed applicants typically fall into one of two categories when applying for a mortgage: full doc or low doc loans. Each has its own set of income verification requirements.
Full Doc Self Employed Loans
These loans require comprehensive financial documentation and offer the most competitive interest rates. Most mainstream lenders and banks will require:
- Business financials – including profit and loss statements and balance sheets for the last two financial years
- Notice of Assessment (NOA) from the ATO
- Bank statements – generally from the past 3–6 months
- Credit card and savings account statements – to verify liquidity and financial habits
Low Doc Self Employed Loans
Low doc loans are tailored for applicants who cannot provide full financial documentation, perhaps due to recent business activity or non standard accounting. While these loans offer more flexibility, they generally come with higher interest rates and more conservative lending terms.
Common documents accepted for low doc applications include:
- Business Activity Statements (BAS) – typically the last two quarters
- Accountant's letter – confirming income and business viability (though increasingly difficult to obtain due to professional liability concerns)
Low doc loans may also require a larger deposit (e.g., 20–30%) and often come with loan to value ratio (LVR) restrictions.
| What you have ready | What loan option fits best | What the residential lender looks at |
|---|---|---|
| Tax returns are fully up to date | Full Doc Loan | 2 years of company tax returns and ATO Notices of Assessment (NOAs). This gets you standard market rates. |
| Tax returns aren't done, but BAS is current | Alt Doc Loan | Your last two quarters of BAS to verify your recent business turnover. |
What's the Difference Between PAYG and Self Employed Loans in Australia?
🏢 PAYG Home Loan
PAYG borrowers are individuals who receive a regular salary or wage from an employer.
💼 Self Employed Mortgage
Self employed borrowers are typically freelancers, sole traders, or business owners.
Do Lenders Treat Self Employed Differently from PAYG Borrowers?
Lenders typically don't necessarily view self employed borrowers differently from PAYG borrowers. The difference lies in the documentation required. While PAYG applicants provide payslips and demonstrate their employment history, self employed individuals must supply business financials or sometimes BAS statements or an accountant's letter to show income and the capacity to repay a loan.
Self employed borrowers are not necessarily considered high risk unless their income is irregular, seasonal, or inconsistent. Many self employed borrowers have a very strong personal position and would be considered a lower risk than a PAYG applicant.
Approval depends on your overall financial position and capacity to service the loan, not your employment type.
Key Differences Between PAYG and Self Employed Home Loans
PAYG Borrowers
Income is verified through payslips, tax returns, or group certificates, providing clear evidence of earnings. PAYG applicants also need to show savings, credit card, and other loan statements.
Self Employed Borrowers
Income verification involves providing financials, ATO notices of assessment, savings, credit card, and other loan statements, Business Activity Statements (BAS), or sometimes an accountant's declaration will be used for low doc applications. This documentation can be more complex and may vary depending on the business structure and duration of operation.
Self employed borrowers can qualify for the same rates as PAYG applicants with full doc applications as long as they demonstrate they can service a loan. Interest rates will differ if a self employed borrower opts for a low doc or alt doc loan, which can come with slightly higher rates.
PAYG and self employed borrowers can qualify for the same LVRs for full doc loans if they can demonstrate their capacity to service the loan. Self employed borrowers may face an 80% LVR cap if they go for low doc or alt doc loans.
Common Questions From Self Employed Borrowers
Can I Get a Home Loan With One Year of Self Employment?
Many lenders will require self employed individuals to have at least 2 years of trading history. That said, some lenders will accept applicants with just 1 year of trading history, particularly if:
- You previously worked in the same industry.
- Your business is performing well.
- You have substantial savings or a large deposit.
- You apply through a low doc lender that is open to broader qualifying criteria.
However, having 2 full years of income documentation that shows consistent income for servicing will provide you with the most lending options with the lowest rates.
Self Employed Borrowers Ask: Can I Get a Home Loan If I Have ATO Debt?
Yes, it is possible to get a home loan with ATO debt. Not all lenders treat ATO debt the same way. In fact, most residential lenders do not check for ATO debt unless it has been escalated to the point of a credit default lodged on your file via CreditorWatch or Equifax or there's a substantial debt on your balance sheet.
But if your tax debt has caused any of the following:
- a missed payment or court judgement,
- registration with a credit reporting agency,
- …or legal action by the ATO,
If this is the case, mainstream lenders are unlikely to approve your application.
There are still competitive home loan options for people who don't have these credit problems, especially those who have an agreed upon repayment plan with the ATO. These options include specialist lenders and non bank lenders.
Typical Loan Structures for Self Employed Borrowers
Both PAYG and self employed borrowers can access the same types of loans. Here are the different types of loans:
Variable Rate Loans
A variable rate loan has an interest rate that fluctuates based on market conditions. This means your repayments can go up or down over time based on factors like the Reserve Bank of Australia's (RBA) cash rate.
Advantages:
- Flexibility: Borrowers can make extra repayments and access redraw facilities.
- Potential Savings: If market rates decrease, so do the interest rates on the loan.
- Offset Accounts: Many variable loans offer offset accounts, reducing the interest payable on the loan.
Fixed Rate Loans
Fixed rate loans lock in an interest rate for a specified period, typically 1 to 5 years. Your repayments stay the same during this term, after which your rate will switch to the standard variable rate.
Advantages:
- Predictability: Fixed repayments for a certain period make budgeting easier.
- Protection Against Rate Increases: Borrowers are shielded from interest rate hikes during the fixed term.
Split Rate Loans
A split rate loan combines both fixed and variable interest rates, allowing borrowers to divide their loan into portions with different interest rate types.
Advantages:
- Balanced Approach: Borrowers can enjoy the stability of fixed rates and the flexibility of variable rates.
- Tailored Risk Management: Suitable for those who want to hedge against interest rate fluctuations while retaining some flexibility.
Interest Only Loans
Interest only loans allow borrowers to pay only the interest on the loan for a set period, typically 1 to 5 years, after which repayments revert to principal and interest.
Advantages:
- Improved Cash Flow: Lower initial repayments can free up funds for other investments or business expenses.
- Investment Strategy: Commonly used by property investors to maximise cash flow during the investment period.
Low Doc & Full Doc Home Loans
What is a Low Doc Home Loan for Self Employed Borrowers?
A low doc (low documentation) home loan is made for self employed Australians who may not have the usual income documentation that lenders ask for. Borrowers can give other types of proof of income instead of full financial statements and notices of assessment.
These loans may have higher interest rates or loan-to-value ratios (LVRs) that are capped at 80% because they require less paperwork. But for a lot of Australians who are self employed, low doc home loans are a useful and necessary way to get into the housing market.
How Does a Full Doc Home Loan Work for Self Employed Borrowers?
A full doc (full documentation) home loan is the standard loan offering available from most banks and lenders. For self employed borrowers, a full doc loan requires a more comprehensive suite of financial documents to verify income.
These documents give lenders a full picture of your financial situation, including your income, liabilities, expenses, and capacity to repay a mortgage. Because of the more robust income verification, full doc loans often offer lower interest rates.
Which is Better for the Self Employed: a Low doc or a Full doc Mortgage?
The better option depends on your own financial situation, how long you've been self employed, and what documentation you can provide.
✅ A full doc loan might be better if:
- You've been self employed for two or more years.
- Your income is stable and well documented.
- You have recent financials and notices of assessment.
- You want access to lower interest rates.
📋 A low doc loan might suit you if:
- You're newly self employed and you don't have tax documents or financials yet.
- Your income is seasonal or variable.
- You have strong business performance but limited formal documentation.
- You need to act quickly.
A qualified mortgage broker can assess your situation and recommend the most suitable lenders and loan products based on your documentation and goals.
Can I Switch from a Low Doc to a Full Doc Loan Later?
Yes, and many self employed borrowers do just that. Switching from a low doc to a full doc loan, referred to as refinancing, is a common strategy once you've established a more consistent income history and have the required documents.
Benefits of switching include:
- Possible lower interest rates
- Better loan terms (e.g. reduced fees, offset accounts)
- Potential to reduce or eliminate Lenders Mortgage Insurance (LMI)
Refinancing also gives you the chance to consolidate debts or free up equity for other investments. It's worth reviewing your loan yearly to check if it still meets your needs and that you're not paying more than necessary.
Tips to Improve Home Loan Approval Chances When Self Employed
Even if you're confident in your ability to make loan repayments, following these best practices can increase your chances of approval:
Maintain a Good Relationship With Your Accountant
Your accountant will prepare your financials and may provide a letter for low-doc applications, though this is becoming harder to secure recently. If your accountant is responsive and provides accountant letters, maintaining a good relationship with them can make a difference with low doc lenders.
Save a Larger Deposit
The more you can contribute upfront, the less risk to the lender. A deposit of 20% or more helps you avoid LMI and that means you avoid the insurer's assessment that could be different to the lenders.
Maintain a Good Credit Score
Pay your bills, loans, and credit cards on time. There are bad credit options, but a higher credit score will give you access to more lenders at cheaper rates.
Limit Existing Debts
High levels of personal or business debt can reduce your serviceability. Lower limits on credit cards and limit applications for car finance or personal loans before applying.
Engage with an Experienced Broker
A lending expert like Dark Horse Financial can help you find the right home loan lenders for self employed Australians. The right lender can meet your needs and provide favourable rates and terms for your financial position.
Frequently Asked Questions
Got questions?
Common questions about self employed home loans answered by our specialist brokers.
Speak with a broker- Self employed home loans and regular home loans may differ when it comes to the requirements, but they don't really differ when it comes to the difficulty of getting approved. Getting approved is definitely possible and can be simplified with the help of a loan expert.
- Lenders typically look at your taxable income from tax returns, as well as other financial records like profit and loss statements or low doc loan options may look at your previous BAS or accept an accountant declaration for income.
- Yes, low doc home loans are still available for self employed Australians. These loans allow borrowers to verify income using alternative documentation such as BAS or an accountant's declaration, although they may come with higher interest rates and LVR caps.
- Yes, it is possible to refinance your existing home loan if you are self employed. Refinancing is best done when your financial or credit situation has improved. This allows you to potentially secure better rates and terms and even reduce your monthly repayments. Refinancing can also help release equity or consolidate debts.
- Your borrowing capacity depends on your income, expenses, credit score, loan to value ratio (LVR) and the lender's criteria. For full doc loans, LVRs can go up to 90%-95%, while low doc loans are usually capped at 80%. In rare instances, some lenders may offer up to 90% LVR on low doc self employed home loans.
- No, self employed borrowers can generally access the same interest rates as PAYG borrowers. The difference lies in whether your loan is full doc or low doc. Full doc borrowers may access rates similar to PAYG borrowers, while low doc or alt doc lending solutions may have higher pricing.
- You don't have to use tax returns for a self employed home loan application. Tax returns are requirements for PAY employees. Full doc self employed home loans require business financials, a notice of assessment from the ATO, and bank, credit card, and savings account statements. Low doc loans need your last two BAS and an accountant's letter, if available.
Ready to Apply for a Self Employed Home Loan?
Speak with a specialist self employed mortgage broker at Dark Horse Financial and explore your options today.