Self Employed Home Loans Australia – Your Complete Guide

Getting a home loan when you’re self-employed can feel like climbing a mountain of paperwork—but it doesn’t have to be. Whether you’re a freelancer, contractor, or small-business owner, the key is knowing which mortgage suits your income style and how to present your financials clearly. 

This guide, written by an expert mortgage broker from Hunter Galloway, breaks down your options and shows how to build a strong application that makes lenders say yes.

Let’s dive in…

Working for yourself has lots of perks – you can decide your working hours, you can choose the people you want to work with, and the biggest advantage is you have control over your income.

However, the biggest advantage of being self-employed is also the biggest disadvantage when it comes to getting a home loan, as the banks will sometimes make it harder to get a home loan…

Often, those who are self-employed are asked many more questions and need to produce much more information than people who are in permanent full-time employment. 

Why?

Because most lenders are looking for a stable income, which can be hard for some people who work for themselves. 

The difference between self-employed home loans and regular loans is that as a self-employed borrower, you need to submit two years’ worth of tax returns, financials and notices of assessment, plus all the questions that come along with everything to do with the finances on your application. Now, this means a lot of plotting around to find your tax returns and have them completed. You must also have been trading in your business for at least 18 months.

 But then, from there, it is the same for everyone.

Generally speaking, lenders are often cautious when it comes to dealing with those who work for themselves.

In the past, lenders have found that self-employed people don’t always have as much financial stability as their employed counterparts – which is not true at all in our experience. 

A few other common issues we have seen include:

The fact is, if you’re self-employed and #killingit, then you’ve got nothing to fear because, at Hunter Galloway, we are dedicated to making sure you get the best self-employed home loan available.

Lenders are looking for financial stability and the ability to prove the following.

All this information is about showing the lender that you’re not a high risk, so the more proof you have, the better the outcome will be.

It’s no secret that a growing number of people in different fields are choosing to work for themselves, whether running a small business, freelancing or doing consultancy. Usually, this method of working is structured as a sole trader and is completely fine to get your loan approved.

Here are some ways that we can help the lenders rest easy, and you can be confident in your application as a self-employed individual.

Getting a home loan when you’re self-employed can feel like a maze. The truth is, lenders want proof that your income is stable and your business is sustainable. By preparing the right way, you can build a strong application and boost your approval chances.

Most lenders want at least two years of self-employment history. This shows consistency in your field.

For example, if you’re a freelance photographer, show that you worked in a studio before starting your own business. This demonstrates continuity of income.

Your credit score is one of the first things lenders check.

According to Equifax Australia, a score above 660 is considered “good” and can help you access better interest rates.

A larger deposit reduces your Loan-to-Value Ratio (LVR) — and your risk in the lender’s eyes.

Mixing personal and business expenses makes it harder for lenders to see your real income.

This small step can make a big difference when applying for self employed home loans.

Lenders prefer steady income over big, irregular payments.

If your income fluctuates, lenders often average your last two years’ income — or use the lowest figure — to assess risk.

When you apply for self employed home loans in Australia, here’s what lenders typically assess:

The Reserve Bank of Australia notes that small-business lending is growing steadily, but lenders still see self-employed borrowers as higher risk — which makes strong documentation essential.

If you’ve worked for yourself for less than a year, don’t panic. Some lenders may use your previous PAYG income to strengthen your case. A mortgage broker can match you with lenders open to flexible documentation.

Now that we’ve determined that your tax returns are practically the lifeblood of your application, it’s important to know what lenders look for in tax returns.

Each tax return you send across needs to come with a notice of assessment, which the lender will use to check the signatures and certification to make sure everything matches. The lender will look at your tax return in detail and may even ask for further documentation, depending on whether you’re a company or a sole trader.

Next, they review any odd expenses that they don’t see as part of your regular business. In some cases, they may add this to your income to determine a more realistic figure; others won’t. This is called an add-back. These expenditures can reduce your taxable income, so the lender recognises this as something other than an ongoing expense.

Banks’ policies on home loans for self employed people change all the time.

We have included a snapshot to give you an idea of what the major bank’s criteria are for self-employed loans.

The table below tells you the bank’s income criteria depending on whether they use your current year’s income, the lower of the past 2 years’ income or an average.

There are banks that have even more flexible criteria for self employed people. Speak to our expert Mortgage brokers about your situation. Call us on 1300 088 065 or complete our online form for a callback.

Depending on how your business is set up, some lenders will send you to the business department. However, beware of setting up a loan as a business, as it won’t benefit you if you’re using your residential property as security on the home loan. Instead, it will only result in more fees and a higher interest rate. So, look for a lender that offers standard residential rates. Our team of experts will help you with this situation through an in-depth consultation.

Read more: Five questions to ask your mortgage broker.

You could be. But, again, it really comes down to the lender and whether they will allow you to submit an income declaration instead of your tax return. This will then be used to decide whether or not they will give you a home loan. 

The problem with low-doc loans is that they come with strings attached. For example, your borrowing capacity will be lowered, and you’ll be charged Lenders Mortgage Insurance (LMI). So it really comes down to your priorities and what’s more important to you.

In fact, many banks are starting to get rid of the low doc loan option. This is so that they can simplify their offerings. On the flip side, getting rid of low-doc loans may make it more difficult for small to medium-sized businesses to obtain a home loan when their income doesn’t meet the lending criteria.

These days, you still need to provide some documentation with low doc loans. This includes: 

Below is a quick comparison of the main types of self-employed home loans, including documentation needs, trading period, and who each loan suits best.

The banks have made it easier to get a home loan by accepting your self-employed salary as an income in the assessment without too much verification required. So, if you’ve been getting a regular salary from your business, you can use this to apply for a home loan instead of a mountain of paperwork. 

All you have to do is submit any one of the following three things: 

Remember, you only need to submit one of these three. However, regardless of which option you choose, you will need an accounts letter on company letterhead with the date your business started, a statement saying your salary is regular and continuing, plus evidence that there’s enough profit for your business to sustain itself.

With this new method, the bank only uses your salary to assess your ability to repay your loan. They will ignore any profit your business is making, no matter how big it is. But that shouldn’t be a problem as long as you can afford to repay the loan.

This change is a big win for many business owners with a company structure that they’re paying themselves a salary through the company, and they don’t really want to go into the weeds about their business by providing all the financials. This works well if you just want a quick and easy solution.

Unfortunately, if you’re a sole trader, you’ll often pay yourself to your own ABN, so you still need to provide your financials to the banks for the last two years.

Another thing that’s worth mentioning is that if you’re thinking of buying an expensive mansion and your borrowing is limited, it’s better to provide your financial statements of your business or apply for things like low documentation loans where the banks can potentially extrapolate a little bit more income than you might be paying yourself as a wage. 

This is where working with a mortgage broker can really help you because they can guide you in the right direction. They can help you choose from the following 3 options:

These quick case studies show how different types of self-employed borrowers successfully got finance for their home loans — even with complex or evolving income situations.

Problem: James, a 42-year-old construction contractor, had recently transitioned into independent consulting after years working under a company ABN. His income was solid but inconsistent month to month, and lenders initially viewed his finances as too unstable.
Docs Used: Two years of ABN history, business activity statements, and add-backs for car depreciation, business equipment, and voluntary super contributions to boost his taxable income.
Outcome: By including legitimate add-backs, his broker increased his assessable income and James was approved for an 85% LVR alt-doc loan to purchase and investment property in Brisbane.

Problem: Sarah, a café owner who had left her PAYG job 14 months earlier, was worried her short trading history would hold her back. She’d just started paying herself a consistent company salary but didn’t have two full financial years of business returns.
Docs Used: BAS statements showing steady growth, a letter from her accountant confirming ongoing profitability, and six months of company payslips.
Outcome: Under a new lender policy recognising shorter trading periods for incorporated businesses, Sarah was approved for a full-doc home loan at 90% LVR and was able to buy her family home

Problem: Alex, a 29-year-old graphic designer, had only been freelancing for nine months after leaving a full-time design agency role. Most banks turned him down due to insufficient tax history.
Docs Used: Six months of business bank statements, a signed letter from his accountant verifying income continuity, and his previous PAYG group certificate.
Outcome: The lender used his strong transaction history and consistent client invoices to approve an 80% LVR alt-doc home loan. Alex was able to purchase an apartment while continuing to build his design business.

Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operators, we have an entire team of home loan experts dedicated to helping make your home loan journey as simple as possible.

If you want to get started, please get in touch here, and we can book a time that suits you – either a phone call information session or a face-to-face meeting (which doesn’t cost anything for you).

Note: Information is current as of November 2025 and subject to change without further notification. Any home loan application is subject to credit approval and verification of all supporting documentation. Consider this article as general in its nature and not as advice.