Running your own business comes with incredible freedom, but it can throw a wrench in the works when you're ready to buy a home. While traditional employees can simply hand over a few pay stubs and get the mortgage ball rolling, the self-employed journey requires a bit more hustle.
Don't stress though—we've got you. As mortgage brokers who've helped hundreds of self-employed Australians secure their dream homes, we'll break down everything you need to know about getting approved for a home loan when you're your own boss. From documentation requirements to insider application strategies, this guide covers all the essentials.
Who qualifies as self-employed
Spoiler alert, it’s probably you. If you're wondering whether you fall into the "self-employed" category, here's the quick checklist. You're considered self-employed if you:
- Run your own business (sole trader, company, or partnership)
- Control your own work schedule and clients
- File taxes as a non-PAYG taxpayer
- Make the primary business decisions
- Contribute most of the capital to your operation
This includes freelancers, contractors, small business owners, tradespeople, consultants, gig economy workers, e-commerce store owners, and anyone who primarily earns their income outside traditional employment.
Real-world example: Sarah runs a graphic design business as a sole trader, manages her own client relationships, and determines her own work hours. Even though she only has one major client, she's considered self-employed because she controls how and when she completes the work.
Why lenders see self-employment differently
Let's be real—lenders aren't trying to make your life difficult. They just view self-employed income differently for one simple reason: stability.
When you work for yourself, your income typically fluctuates month to month. You might crush it in March and struggle in August. Traditional employees present an easier application for assessment with their steady paychecks, while self-employed applicants need to demonstrate consistent earning power over time.
Here's what lenders are specifically concerned about with self-employed borrowers:
- Income fluctuations: Seasonal or irregular cash flow that might affect your ability to make consistent repayments
- Business longevity: Whether your business has proven staying power in the market
- Industry stability: Some industries are considered higher risk than others
- Tax minimisation: Many self-employed people legitimately minimise their taxable income, which can work against them when applying for loans
The good news? Once you understand the game, you can definitely win it. Lenders want to lend—they just need to be confident you can repay.
What documents you need
The paperwork is where self-employed home loans get a bit more complex. Here's a comprehensive breakdown of what you'll need:
For all self-employed applicants:
- ABN registered for at least 2 years (ideally)
- Last two years of personal tax returns
- ATO Notices of Assessment for the previous two financial years
- Evidence of active GST registration
- Current residential address documentation
- Personal ID (driver's license, passport)
- At least 3-6 months of personal bank statements
- Details of personal assets, liabilities, and expenses
Additional requirements based on your business structure:
Sole traders
- Business activity statements (BAS) for the past 12 months
- Recent business bank statements (at least 3 months)
- Evidence of consistent business income via bank deposits
Partnerships
- Partnership tax returns for last two years
- Partnership agreement
- Profit & loss statements showing your distribution
- Balance sheets
- Details of any external liabilities (leases, business loans, etc.)
Companies & trusts
- Company/trust tax returns for the last two years
- Company financial statements (profit & loss, balance sheet)
- Most recent company tax assessment notice
- Trust deed (for trust structures)
- Evidence of distributions or salary paid to you
- ASIC company extract showing directorship
For the home purchase
- Contract of sale (if you've found a property)
- Details of the deposit you've saved
- Evidence of additional funds for closing costs
Documentation preparation tips:
- Organise all documents chronologically
- Have digital copies ready (most lenders accept digital submissions)
- Get your accountant to review everything before submission
- Ensure all financial statements are finalised and signed
Pro tip: Keep your business and personal expenses separate! This makes your financial situation much clearer to lenders and demonstrates financial responsibility. Have a dedicated business account and avoid using personal funds for business expenses.
Options if you’re newly self-employed
Don't close the browser tab just yet—there are options if your business is newer than the typical two-year minimum:
- Industry Experience: If you've worked in the same industry before starting your business, bring evidence of your previous employment. Payslips and references from former employers can help establish your expertise and earning potential. Example: A former marketing manager who started her own marketing consultancy can use her 5+ years of prior employment history to demonstrate industry expertise.
- Larger Deposit: Coming to the table with a larger deposit (20%+ or even 30%) can significantly offset the perceived risk of your newer business. The more skin you have in the game, the more comfortable lenders feel.
- Strong Credit History: A stellar credit score can work wonders for your application chances. Make sure your personal credit report is spotless—no missed payments, defaults, or excessive credit inquiries in the last 12 months.
- Additional Income Sources: Do you have other income streams like investments, rental properties, or a partner with stable employment? These can supplement your business income and strengthen your application.
- Business Success Indicators: Rapid growth, major client contracts, or substantial revenue in a short time can sometimes overcome the two-year requirement. Bring evidence of your business momentum.
- Specialised Brokers: Some brokers (like us) have relationships with lenders who are more flexible with newly self-employed borrowers. Don't waste time with traditional banks if you're in this situation.
- Consider a Guarantor: Having a family member with significant equity in their own property act as a guarantor can be an option for newer business owners.
Low doc home loans: alternative route
If your documentation situation is complicated, a low doc home loan might be worth exploring. These loans require alternative proof of income rather than the full suite of tax documents.
What exactly is a low doc loan?
A low documentation loan allows you to verify your income through alternative means when you can't provide traditional documentation. This is different from the now-extinct "no doc" loans that required no income verification whatsoever.
When to consider a low doc loan?
- Your tax returns don't reflect your current earning capacity
- You have legitimate business deductions that lower your taxable income
- Your business is growing rapidly, and past returns don't show current revenue
- You haven't filed your most recent tax return yet (e.g., applying early in the financial year)
Alternative documentation you can provide?:
- A signed income declaration (statutory declaration of your income)
- Business Activity Statements (BAS) for the past 12 months
- ABN registration (usually for at least 12 months)
- Business bank statements showing regular income deposits
- Accountant's letter verifying your income
- Contracts with clients showing ongoing work
- GST registration and payment history
Important considerations for low doc loans:
- Higher interest rates (typically 0.5-1.5% above standard rates)
- Larger deposit requirements (usually minimum 20%)
- Potentially stricter LVR (loan-to-value ratio) limits (often 80% maximum)
- Lenders Mortgage Insurance is typically unavailable above 60-80% LVR
- Reduced borrowing capacity compared to full doc loans
- Fewer lenders offer these products (making broker assistance valuable)
A low doc loan isn't necessarily inferior—it's simply designed for different circumstances. Many business owners successfully use these loans to purchase property and later refinance to standard loans once they have more documentation available.
How to maximise your approval chances
Want to put yourself in the best position for mortgage success? Here's our comprehensive strategy guide for self-employed applicants:
1. Start preparing 6-12 months in advance
The earlier you begin preparing, the better your chances. Here's your timeline:
12 months before:
- Meet with your accountant to discuss how to structure finances
- Begin separating personal and business expenses completely
- Pay yourself a consistent salary/dividend if possible
- Address any credit report issues
6 months before:
- Focus on reducing debt-to-income ratio
- Establish consistent savings patterns
- Minimise business expense claims if possible
- Avoid large business purchases
3 months before:
- Stop all unnecessary credit applications
- Maintain stable account balances
- Ensure all tax lodgments are current
- Begin gathering documentation
2. Strategise with your accountant
Tax minimisation strategies are great for reducing your tax bill but can work against you when applying for a mortgage.
Key discussions to have:
- Potentially reducing business deductions for 1-2 years before applying
- Taking a higher salary instead of retained earnings
- Accelerating revenue recognition where possible
- Documentation of add-backs (legitimate business expenses that lenders might consider when calculating your income)
3. Create financial clarity
Lenders love transparency and hate confusion. Make your finances crystal clear:
- Maintain separate business and personal accounts with zero crossover
- Use accounting software that generates clean financial reports
- Pay yourself regularly (weekly/monthly) rather than sporadically
- Keep detailed records of all business transactions
- Maintain a clean transaction history (avoid overdrafts, late payments)
- Consider having an accountant audit your financials before applying
4. Optimise your credit profile
Your credit score matters even more as a self-employed borrower:
- Check your credit report for errors (get free reports from Equifax, Experian, or Illion)
- Pay all bills on time, especially in the 12 months before applying
- Reduce credit card limits (even unused limits count against you)
- Pay down existing debts to improve your debt-to-income ratio
- Avoid applying for new credit before seeking mortgage approval
5. Build a strong deposit
Coming to the table with a large deposit has multiple benefits:
- Avoids Lenders Mortgage Insurance
- Demonstrates financial responsibility
- Often allows access to better interest rates
- May help overcome income documentation challenges
Deposit sources to consider:
- Cash savings (ideally showing consistent savings behavior)
- Equity in existing properties
- Genuine gift from family (get proper documentation)
- Sale of other assets
- Low deposit loans
6. Work with a broker who specialises in self-employed loans
Not all mortgage brokers understand the nuances of self-employed applications. The right broker will:
- Know which lenders are currently self-employed friendly
- Understand how to present your financial situation in the best light
- Help you navigate complex documentation requirements
- Potentially save you thousands in interest over the life of the loan
- Advocate for you if your application isn't straightforward
Pro tip: Ask potential brokers about their experience with self-employed clients specifically. How many have they helped in the past year? What's their success rate?
The fast track option
Some lenders offer streamlined application processes for self-employed borrowers who meet certain criteria:
- 20%+ deposit ready to go
- Last two years of ATO Notices of Assessment
- Regular salary/distributions from your business
- No need for additional income sources to service the loan
This can significantly speed up your approval timeline and reduce paperwork headaches.
The bottom line
Being self-employed doesn't close the door to homeownership—it just means you need to be more strategic about how you approach it. With the right preparation, documentation, and expert guidance, you can absolutely secure competitive financing on your dream home.
Ready to explore your options? Let's chat. We specialise in helping self-employed Aussies navigate the mortgage landscape and find the right solution for their unique situations. Book a no-obligation consultation today, and let's make your homeownership dreams a reality.
