Getting a home loan when you’re self-employed can feel like jumping through hoops, but it doesn’t have to be. While banks tend to favour borrowers with a steady salary, there are plenty of options for self-employed professionals, business owners, and freelancers who want to buy a home.
In this guide, we’ll break down how self-employed home loans work, what lenders look for, and how to boost your chances of approval – without unnecessary headaches.
The biggest challenge for self-employed borrowers is proving their income. Unlike salaried employees who can provide payslips, you need to show your business earnings in a way that reassures lenders you can afford the mortgage.
Lenders assess risk, and fluctuating income or inconsistent financial records can make them hesitant. That’s why preparation is key – and why understanding the loan process can help you secure a mortgage faster.
Every lender has different requirements, but most will look at:
✔️ Your Business Financials – Expect to provide at least two years’ worth of tax returns and financial statements (profit & loss, balance sheets, etc.).
✔️ Income Stability – The more consistent your earnings, the better. If your income fluctuates, be ready to explain why and provide supporting evidence.
✔️ Loan-to-Value Ratio (LVR) – If you have a 20% deposit, you’ll likely get better rates and avoid Lender’s Mortgage Insurance (LMI).
✔️ Credit Score – A solid credit history helps. Late payments or defaults can make approval harder.
✔️ Business Longevity – Most lenders prefer that you’ve been self-employed for at least two years (though some offer loans with as little as one year of trading).
Depending on your situation, here are the best mortgage options:
If you have at least two years of tax returns and financials, you can apply for a regular home loan like any other borrower. Having a solid income history will work in your favour.
A low-doc loan is an option if you don’t have traditional financial documents but can provide alternative proof of income (e.g., BAS statements, accountant declarations, or business bank statements).
🔹 Pros: Less paperwork, faster approval.
🔹 Cons: Higher interest rates, stricter deposit requirements.
Some non-bank lenders specialise in self-employed home loans, offering more flexible income verification. They assess your ability to repay the loan based on cash flow, assets, and industry trends rather than strict tax return data.
Follow these key steps to strengthen your loan application and get approved faster:
✅ Ensure your tax returns and financial statements are up to date.
✅ Keep personal and business finances separate to show clear income streams.
✅ Reduce tax deductions if possible—lenders look at your taxable income, not revenue.
Aiming for a 20% deposit helps avoid LMI and gets you better interest rates. If you have less than 20%, some lenders will still approve your loan, but you may need to pay LMI.
✔️ Pay off debts (credit cards, personal loans) before applying.
✔️ Avoid late payments—these can hurt your application.
✔️ Limit new credit inquiries, as too many can be a red flag to lenders.
If your income fluctuates, provide multiple years of financials to show stability. If you’ve had higher income recently, some lenders may allow you to use the most recent year’s figures.
Before house hunting, apply for pre-approval to get an idea of how much you can borrow. This also makes you a stronger buyer in the eyes of sellers.
🚫 Not checking your credit report – Know your score before applying.
🚫 Applying with multiple lenders at once – This can lower your credit score.
🚫 Underestimating living expenses – Be realistic with your budget.
🚫 Not working with a mortgage broker – A broker can help you find lenders who specialise in self-employed home loans.
Absolutely! While self-employed home loans require extra documentation and planning, the right preparation can fast-track approval and get you competitive rates.
If you’re self-employed and looking for a home loan, reach out today—we’ll help you navigate the process, compare lenders, and get you into your new home sooner.
With 20 years of experience, Julie helps self-employed Australians secure home loans with less stress and better approval odds. She understands the challenges of verifying income and ensures your loan works for you—not the other way around.
✅ Low-doc & self-employed home loans
✅ Solutions for fluctuating income
✅ Faster approvals for business owners
💡 Ready to buy your home?
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At Mortgage Pass, we specialise in simplifying finance for business owners, professionals, and tradies by offering tailored mortgage and business finance solutions designed to meet your unique needs.
Our focus is on helping you achieve your financial goals by securing the right home or business finance, all while providing a personalised, client-first experience backed by nearly 20 years of business experience.
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