How To Get A Home Loan On Contractor Income [Updated For 2026]

Getting a home loan on contractor income can be a bit complex, especially as most banks don’t really understand contractor income. But with the right information, you can successfully apply for a home loan as a contractor. 

In this article, we will show you exactly how to get a home loan on contractor income in 2026.

(Step-by-step).

The best part?

You’ll see LOTS of real-life examples of these steps in action. We will also show you how working with a mortgage broker in Brisbane can get you the best deal.

Let’s dive right in…

Contractors often struggle to get home loans because banks see their income as unstable.

However, with the right approach and documentation, it’s possible to secure a loan. Here’s a summary of the step-by-step guide:

Hunter Galloway specialises in helping contractors find suitable home loans. Contact us for personalised assistance and improve your chances of securing a loan.

The banks view contractor income as highly unstable and (wrongly) assume there is a high chance your contract can get cancelled at any time.

While this is often NOT the case, many banks view contractor income in much the same way as casual employment—Short term and unstable.

By applying with the right bank and working with a specialist Mortgage Broker like Hunter Galloway, you’ll have a much higher chance of getting your loan approved. We work with several banks that understand contractor income and can find you competitive interest rates in the current market.

But how do you get a home loan on contractor income?

Different types of contractors face distinct challenges when applying for a home loan. Let’s break down the main categories:

Understanding which category you fall into can help you prepare the right documentation and approach lenders who are more likely to view your situation favourably.

Contractors get paid in many different ways.

Understanding your income type will determine what your home loan options are. Specifically, you want to know if a bank will treat you as a regular (PAYG) employee or a self-employed contractor.

While these are the broad categories, there are lots of subcategories of a contractor that we see, including:

There can be special cases and exceptions for Mining Contractors because they receive some of the highest salaries in Australia. While mining contractors may have shorter-term contracts today than previously, we work with a few banks that adopt a common sense approach to considering applications. They understand that mining contracts can be easily replaced if they are not renewed.

This is one of the more common types of contractors that we help with arranging home loans. IT Contractors are some of the best-paid workers across Australia, but so many banks do not understand their type of work and decline their applications. Due to the high employer demand and relatively low risk, we have several banks we work with that can assist IT Contractors with getting a home loan.

Contractors in construction might work from project to project, like a unit development or a large mining project. If you supply your own materials and tools to the construction project, some banks will consider you self-employed. So you will need to provide 2 years’ tax returns – but the benefit is that you can be assessed like other contractors.

Contractors who work as journalists or freelancers are paid on a per-work basis, like for an individual article. As a freelancer, your income will be assessed using a few different methods, but typically, you will need to provide the last 2 years’ tax returns to substantiate income.

Subcontractors can be employed on both a regular PAYG or self-employed contractor basis. Subcontractors are very common in the construction, mining, and real estate industries, with many working jobs that have been externally commissioned. How your income is treated really comes down to how you are paid. Do you receive payslips? If so, you are PAYG. Do you invoice your employer? If so, you are considered self-employed.

As you can see, the banks treat each type of contract worker differently. What type of income will be acceptable is determined by what information you need to provide to get your home loan approved.

Once you are ready to look at home loan options, it’s time to collect your supporting documents.

You’ll need to provide evidence to support your current income and future employment using the following documentation:

When less than 5-6 months are left on your current employment contract, the lenders will place much more importance on your previous work history to understand employment patterns.

If you have been contracting for over 2 years and have always been employed in short-term contracts, then this is fine. We may just need to provide a copy of your last 2 tax returns to show your income levels have stayed consistent throughout this time.

If you have been contracting for less than 2 years, have only recently changed to a contract, and your contract is about to expire, it could be worth talking to your employer to see if they can extend the contract term.

Kate & Thomas want to apply for a loan. Thomas has been working for the same employer for the past 3 years. However,4 months ago, he switched to becoming a contractor as it offered a higher pay rate.

Thomas’ contract only has 2 months left to run, as it was initially a 6-month contract. He is also considered a self-employed contractor because he invoices his employer each month.

We were able to arrange an 80% LVR loan through a major bank by providing the following documentation:

In this case, we used Tom’s new contract income rate (which was 35% higher than in previous years) and helped him borrow a higher amount than if he was relying on his old income.

Please complete our free online assessment form to chat with a mortgage broker who can help you get approved.

Most banks (and many inexperienced brokers) calculate contractor income the WRONG way completely.

Instead of calculating your current income, they’ll rely on figures from 1 or 2 years ago.

…And how does this end?

HORRIBLY!!!

That’s why you want to ensure you are working with an experienced mortgage broker who understands how to calculate your income the right way.

Samuel has been contracting at $1,030/day + GST since January 2022. His FY23 taxable income was $100,000, FY22 taxable income was $90,000, and he has a few existing home loans.

His current tax year’s income is projected to be $150,000.Samuel spoke to his bank, which said they would only use $90,000 income towards his servicing.

At Hunter Galloway, we were able to use the FY24 financial year (even though he hadn’t completed his tax returns) by utilising P&L draft accounts prepared by his accountant, the last 4 quarters BAS verifying his income and 6 months’ bank statements showing his contract income had increased.

The result is that we were able to use $150,000 income towards his servicing rather than the $90,000 that his bank advised.

Please complete our free online assessment form to chat with a mortgage broker who can help you get approved.

This is important…

What you need in a home loan is much more than a cheap interest rate. Having the right features can help you repay your home loan MUCH faster.

Being a contractor, your income can be fairly lumpy. And if you were to fix your interest rate, you would be limited in making extra repayments

You need to weigh the good and the bad when it comes to choosing the type of home loan.

Other home loan features you may need as a contractor include:

Read More: 10 [simple] Tips for Choosing the Best Home Loan

Here’s the deal: Once you have determined what income you can use, your borrowing capacity is simple to calculate.

In this basic example, if your income is $150,000 and you are single without any credit cards, your mortgage broker can arrange a loan of around $942,000. However, if you are a couple and your combined income is $150,000, you will only be able to borrow around $814,000 because you both need to share the cost of living between you.

There are lots of factors that affect borrowing capacity, like credit card limits and living expenses.

Read More: First Home Buyers Guide to Borrowing Capacity.

The biggest secret to getting a home loan on contractor income is to use the right bank!

Contractor income earners have a much higher chance of being approved if the application is submitted to the right bank.

At Hunter Galloway, we are experts and would love to help you buy a home if you are relying on projected income or other contract income types. We can help IT Contractors, Mining Contractors, Construction Contractors, Subcontractors and Journalists with getting a home loan now.

Please call us on 1300 088 065 or complete our free online assessment form to get in touch with a Contractor Income Expert.

. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.

If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.