Self-Employed Home Loan Guide 2026: How to Get Approved

Getting a home loan when you're self-employed is absolutely possible — but the process is different from a standard PAYG application. Lenders apply stricter criteria because self-employed income can be variable, and the documentation requirements are more complex. The good news is that most major banks and lenders now offer streamlined pathways for business owners, and with the right preparation you can access the same rates as salaried borrowers. Here's everything you need to know.

Who Counts as "Self-Employed"?

For home loan purposes, you're considered self-employed if you earn more than 50% of your income from a business where you are a:

• Sole trader operating under your own ABN
• Partner in a business partnership
• Director or shareholder (25%+ ownership) of a company
• Beneficiary of a trust that distributes business income to you
• Contractor or freelancer working under your own ABN rather than as an employee

This includes tradies, consultants, medical professionals with their own practice, Uber/delivery drivers, online business owners, and anyone else running their own show.

What Documents Do You Need?

The documentation required depends on your business structure, how long you've been trading, and which lender you apply with. Here's what to expect:

Some lenders have simplified this significantly. St.George's "Fast Track" assessment, for example, only requires your last two ATO Notices of Assessment — no business financials at all — provided you have a 20% deposit. ANZ will accept just one year of tax returns for most applications.

How Lenders Calculate Your Income

This is where self-employed applications get tricky. Unlike a PAYG employee with a clear salary, your income needs to be extracted from tax returns and financial statements. Different lenders use different methods:

The method a lender uses can make a huge difference to your borrowing power. If your income jumped from $90,000 to $130,000 between years, a "lowest year" lender would assess you on $90,000 while a "most recent year" lender would use $130,000. This is one of the biggest reasons self-employed borrowers benefit from using a broker — we know which lender's method suits your income profile.

What Are Add-Backs?

One of the advantages of being self-employed is that many lenders will "add back" certain business expenses to your assessed income. These are legitimate deductions you claim for tax purposes that don't represent an actual ongoing cash cost:

• Depreciation — a non-cash expense that reduces your taxable income
• One-off expenses — a large equipment purchase or fit-out that won't recur
• Interest on investment loans — if the loan is for income-producing assets
• Superannuation contributions — some lenders add these back
• Vehicle and travel expenses — where the lender considers these discretionary

Add-backs can significantly boost your assessed income. A business showing $80,000 net profit but with $25,000 in depreciation and $10,000 in one-off costs could be assessed on $115,000 by the right lender.

The Tax Minimisation Trap

Here's the catch that trips up many self-employed borrowers: the more effectively you minimise tax, the lower your declared income — and the less you can borrow. A business owner earning $200,000 in revenue who claims $150,000 in deductions will only show $50,000 of income on their tax return.

Full Doc vs Low Doc vs Alt Doc

There are three main pathways for self-employed borrowers, each with different trade-offs:

Full Doc is the gold standard. If you have 2+ years of tax returns and your declared income supports the loan, you'll get the same rates and terms as any PAYG employee. This is what most self-employed borrowers should aim for.

Alt Doc is a newer option offered by lenders like Pepper Money. Instead of tax returns, you provide 6 months of BAS statements, business bank statements, or an accountant's letter. You'll need a minimum 6 months ABN and GST registration. Rates are slightly higher but this is a strong option if your tax returns don't reflect your true earning capacity.

Low Doc should generally be a last resort. Rates are noticeably higher, deposits are larger, and lender options are limited. However, if you're newly self-employed with limited paperwork, it may be the only path available.

What If You've Been Self-Employed Less Than 2 Years?

This is one of the most common challenges. Most mainstream lenders want two full financial years of trading history. But there are options at every stage:

A key exception: if you've been working as a PAYG employee in the same industry for 2+ years before going self-employed, some lenders will count that prior experience. For example, an electrician who worked for a company for 5 years and then started their own business 12 months ago may qualify for a full doc loan with select lenders.

Streamlined Options from Major Banks

The big banks have recognised that not all self-employed borrowers need the full paperwork treatment. Here are some simplified pathways:

• St.George Fast Track: Only needs your last 2 ATO Notices of Assessment — no business financials at all. Requires 20% deposit.
• ANZ 1-Year Assessment: Accepts just one year of tax returns for most structures. Sole traders only need an individual tax return and ATO Notice of Assessment.
• ANZ Streamlined PAYG: If you pay yourself a regular company wage for 6+ months, you can apply like a PAYG employee with just a payslip and ATO income statement. ABN/ACN must be registered for 18+ months.

7 Tips to Maximise Your Approval Chances

1. Plan 1-2 years ahead: Talk to your broker and accountant before lodging tax returns. Structure your income to support borrowing without unnecessarily increasing your tax bill.
2. Keep personal and business finances separate: Separate bank accounts make it much easier for lenders to verify your income and spending.
3. Save a larger deposit: 20% eliminates LMI and opens up streamlined assessment options like St.George Fast Track.
4. Lodge your tax returns on time: Lenders can't use returns that haven't been filed. Overdue ATO lodgements are a red flag.
5. Reduce personal debt: Pay down credit cards, car loans, and Buy Now Pay Later accounts. Every dollar of existing debt reduces your borrowing power.
6. Use accounting software: Xero, MYOB, or QuickBooks give you clean, lender-ready financial statements and reduce application delays.
7. Use a broker: Different lenders calculate self-employed income differently. A broker can match your income profile to the lender whose method gives you the best result — and we only submit one credit enquiry, protecting your credit score.

The Bottom Line

Being self-employed doesn't mean you can't get a great home loan — it just means the process requires more preparation. With 2+ years of trading history and up-to-date tax returns, you can access the same rates as any salaried borrower. Even with less than 2 years, there are genuine options through alt doc and specialist lenders. The key is to plan ahead, get your paperwork in order, and work with a broker who understands self-employed lending inside out.

Sources: ANZ; St.George Bank; Pepper Money; Home Loan Experts; loans.com.au; Inovayt; CreditSmart