What Is a Self-Employed Home Loan?
A self-employed home loan is a mortgage designed for individuals who run their own business, freelance, or work as contractors. Unlike PAYG employees, self-employed borrowers must prove their income stability through alternative documentation.
Common Self-Employed Home Loan Requirements
When applying for a home loan as a self-employed borrower, lenders will likely ask for:
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An ABN (Australian Business Number) registered for at least 2 years
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Personal and business tax returns from the last 2 years
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Profit & loss statements and balance sheets for the most recent 2 years
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Details of external liabilities (e.g., leases, overdrafts, hire purchases, business loans)
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1 month of business bank statements
What If You’ve Been Self-Employed for Under 2 Years?
If your business is less than two years old, most lenders will view your income as less stable. However, you still have options:
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Show you’ve worked in the same industry for over 2 years
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Provide former payslips, employment references, or industry certifications
These steps help demonstrate your earning consistency before launching your business.
Low Doc Loans: An Alternative for Self-Employed Borrowers
A low documentation (low doc) loan is tailored for self-employed individuals who cannot provide traditional proof of income. Instead of full tax returns, you might use:
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BAS statements
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Accountant declarations
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Business activity statements
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Bank statements
Pros and Cons of Low Doc Loans
Pros:
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Easier access for business owners
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Flexible documentation requirements
Cons:
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Higher interest rates
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Lower maximum loan-to-value ratios (LVRs)
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Fewer lenders offering this product
