person shaking hands with a lender

Lenders have distinct requirements for determining if you qualify for a self-employed house loan due to the unpredictable income of self-employed people. You can increase your likelihood of being accepted by better understanding what you need to do to meet their requirements if you are aware of this.

Read this guide to learn everything there is to know about self-employed house loans.

How to Know If Someone Is Self-Employed

Lenders would typically assume that you are self-employed if you do not have a regular fixed income from a salaried job. Anyone who has their own firm or works as a sole proprietor, consultant, or freelancer falls under this category.

Even if they are paid by the company, shareholders and company directors may be regarded as self-employed. Lenders will evaluate the company’s financials, including directorship status, ATO debts, and if the business is GST-registered.

Self-Employed Home Loan

Lenders will evaluate your income using a different set of criteria instead of offering specifically tailored house loans for self-employed people. This indicates that you can access the same interest rates and home loan features as salaried candidates.

The main distinction is how a lender will evaluate your income and the supporting evidence you must give them in this regard. All of this has to do with your serviceability, which is how a lender determines your capacity to pay back a mortgage or home loan.  

This is made to reduce their risk exposure and determine how much debt they can handle. Your risk profile may cause some lenders to charge you a higher interest rate.

Self-Employed Mortgage Loan Preparations

You must provide the same paperwork as a salaried application, including an overview of your income, employment information, spending, assets, liabilities, and savings history.

Depending on whether you’re a sole proprietor, partnership, or corporation, specific lenders may also have slightly different documentation needs. 

Because you are self-employed, your lender will also require two years’ worth of the following documentation:

  • Business tax returns
  • Financial records
  • Individual tax returns
  • Notice of Assessment from ATO
  • Business activity statement

The dates of your GST registration and ABN must also be provided. Using your ABN and GST registration, you may prove that you have been employed and have a steady source of income. 

The terms and limitations that lenders may impose on a self-employed loan are something else you should be aware of.

Requirements and Limitations of Self-Employed Loans 

Depending on the lender, a self-employed mortgage has different terms. Lenders may consider either the income reported on your most recent company tax return or the lowest income over the previous two years to determine your self-employed income. 

Some people might use the mean of the prior two years’ earnings. Other lenders may also perform what is known as an add-back on any unexpected or one-time expenses you have incurred if you own a business. 

In order to verify that the income information you supply matches what you reported to the ATO, lenders will additionally request your personal tax returns and notices of assessment.

Even if you can’t provide all the required documentation or have only recently started working for yourself, you may still be qualified for a loan.


The next step is to chat with a home loan professional, so they can verify your eligibility and help with your application now that you are more aware of how these loans operate. 

They will happily assist if you have any questions regarding self-employed home loans. Their teams are also typically accessible for a chat at a time that works for you.

If you’re looking for companies offering self-employed home loans, don’t hesitate to call Wealthy You. We’re an Australian mortgage company servicing Sydney for almost a decade and offering a range of mortgage options to suit your individual financial requirements. Secure your loan with us today.