Home loans for self employed borrowers – what’s the go?

Self-Employed? You Can Still Land That Home Loan

Yep, it’s true—lenders look at self-employed borrowers a little differently.

But hey, just because you’re your own boss doesn’t mean you can’t take charge of your home loan too.

Owning your dream home is totally doable. You might just need to tick a few more boxes and hand over a bit of extra paperwork so the lender feels comfy lending to you.

So… what’s actually required when you’re self-employed and applying for a home loan?

• What’s different?
• What should you have ready?
• And how can you put your best foot forward?

Let’s break it down.

How Lenders See Self-Employed Borrowers

Put yourself in their shoes: lenders want to know you’ll be able to make your repayments—simple as that. If your income isn’t as regular as someone on a salary, they might see you as a higher risk.

But if you can prove you’ve got your finances under control, a home loan is still 100% within reach. Boom.

So, What Counts as Self-Employed?

If you’re working for yourself—whether as a sole trader, freelancer, contractor, or company director—you’re considered self-employed in the lender’s eyes. Even if you’re paying yourself a wage through your company, it still counts.

What Do Self-Employed Borrowers Need for a Home Loan?

Requirements vary from lender to lender, but generally, they want to see that your business has been running for at least two years. Basically, they’re looking for consistency and a reliable income history.

You’ll need the usual stuff like:

• ID – Driver’s licence, passport, etc.
• Proof of income – Like bank statements
• Financial position – Super balance, credit card limits, living expenses

Plus a few extras for self-employed applicants, such as:

• Company & personal tax returns (last two years)
• Business Activity Statements (BAS)
• Balance sheets and profit/loss statements (usually from your accountant)
• External liabilities (leases, business loans, etc.)
• ABN registration (ideally over two years)
• GST registration (if you earn over $75K)
• Possibly a letter from your accountant

Every lender’s a little different, which is why chatting to someone who knows the ropes (hello, mortgage broker 👋) can make life easier.

Are There Any Extra Hurdles?

Yep, a few—but nothing you can’t handle with the right prep and advice. Some things to keep in mind:

• Fewer lenders might be available to you depending on your situation
• You might cop a slightly higher interest rate, especially if you go with a low doc loan
• Lenders may want to see your other assets to feel secure

What If You’ve Been Self-Employed for Less Than Two Years?

Don’t stress—it’s still possible! You might just have fewer options.

If you’ve got loads of experience in your industry, lenders will take that into account. For example, if you’ve been a graphic designer for 10 years but only recently started freelancing, they’ll factor in your career background.

Some may even consider your previous salary or how easy it’d be for you to jump back into a stable role if needed.

Even if you’ve only been self-employed for under a year, you might still qualify—it just depends on the lender and your overall profile. Again, a good broker can help you work through it all.

What’s a Low Doc Loan?

Glad you asked! A low doc loan isn’t the same as a self-employed loan, but it’s often used by self-employed borrowers.

As the name suggests, it requires less documentation. You’ll still need to provide some income evidence—like BAS or bank statements—but not as much as a standard loan.

You might even sign an income declaration saying you can afford the repayments.

The catch? Low doc loans usually come with higher interest rates, possible risk fees, and might require a larger deposit or Lenders Mortgage Insurance (LMI). So while they’re a good workaround, they do come at a cost.

How to Prep for a Home Loan When You’re Self-Employed

So, what can you do to put yourself in the best spot before applying?

• Stay on top of your paperwork – Keep tax returns and BAS up to date
• Clear out debts – Pay off loans or credit cards where you can
• Line up some references – Your accountant or previous employers might be asked to vouch for you
• Make sure you’re registered for GST – If you’re earning over $75K, this one’s a must

And lastly—chat to a broker. There’s a bit more to juggle when you’re self-employed, but having someone who knows the ins and outs can save you time, stress, and even money.