6 Tips for Getting a Home Loan if you're Self-Employed

self-employed coffee shop owner

If you're a self-employed borrower or a small business owner, you’re probably already very familiar with the ongoing challenges of keeping your accounts, finances, and income all in order. It's not easy.

But there's some good news. Getting a home loan doesn’t have to be yet another issue to worry about. We’ve put together six steps that could help self-employed borrowers prepare for the home loan process.

Self-employed home loan and income

1. Boost your deposit: You could pay less in the long run

Securing a home loan in Australia can be challenging if you’re self-employed. Saving for a bigger deposit could help to improve your chances of approval.

By putting down 20% or more of the property's value as a deposit, your loan-to-value-ratio (LVR) is lower which means you may be able to avoid paying a home loan risk fee like lender's mortgage insurance (LMI). This can help you save money upfront and can help to demonstrate financial discipline which may increase the lenders' confidence in approving your home loan application.
A larger home loan deposit could help you save money in the long run – this could mean that your regular repayments will be lower and you’ll pay less interest over the life of the loan.

Our guide provides some tips that could help you when saving for a home loan deposit.

Self-employed home loan and income

2. Know your numbers: And the different ways they show up

As a self-employed Aussie looking for a home loan, providing the right paperwork is important to help show your ability to make regular repayments. A good starting point is to gather all documents that show your regular monthly income.

It could also be a good idea to prepare a list of your assets, including bank statements that confirm your savings or term deposits. Additionally, you may include other assets and investments such as stocks and rental properties to show your overall financial position.

If you're struggling to get your paperwork in order, it doesn't necessarily mean you cannot qualify for a home loan. It just means you might need to provide some alternative documentation to show your income beyond that of a regular PAYG employee. This is where our Alt-doc loans could be an option.

Self-employed home loan financial statements

3. Fast track to your goals: Be up front with your lender

When applying for a self-employed home loan, transparency is key. It's important to be upfront about any changes in your business's income. Our lending specialists understand that self-employed borrowers can experience inconsistent income and will work with you to evaluate your ability to repay the loan.

To demonstrate consistent income, you may need to provide additional documents such as ongoing contracts or invoices from clients. This information helps us assess your creditworthiness and helps to determine your eligibility for a self-employed home loan.

The Alt Doc option offers a possible home loan alternative for Australia’s army of self-employed workers. Many of who may not tick the usual loan application boxes, or might not have the extensive ABN history and paperwork required by some mainstream lenders.  

Self-employed home loan taxable income

4. Tackle the taxable-income dilemma: Get the right help

One of the major challenges self-employed borrowers and small business owners face when it comes to securing a home loan is accurately calculating taxable income. This information is important as it helps lenders assess your ability to meet your ongoing repayments.

To help streamline your application, it could be a good idea to have your tax returns up to date before applying for a loan. So it could be a good idea to chat with your accountant and ensure that your income tax returns are lodged properly with the ATO. If you’re not up to date with your tax return, then don’t worry – our Alt Doc home loan option is designed to help borrowers who don’t have the required documents for a standard home loan application.

Self-employed home loan cash-flow

5. Improve your cash flow: Keep things on track

We understand that self-employed income can be unpredictable, and your financial situation may be more complex than that of a traditional 9-5 worker. Having a financial plan in place could help you gain control your finances and improve your cash flow – both of which could increase your chances of being approved for a home loan.

Paying off any outstanding debts you may have, such as credit cards or personal loans could be a good place to start.  This could have a positive impact your credit score, and you may qualify for a higher loan amount with some lenders.

Increasing your income could also help demonstrate financial stability to lenders. Maintaining a steady stream of income over time can help to show that you have a reliable source of income.

Overall, having a financial plan that focuses on increasing your cash flow and reducing debts can help increase your chances of being approved for a home loan.

Self-employed healthy credit report

6. Keep your credit score healthy

Your credit score plays a key role in the home-buying process, and this is no different if you’re self-employed. A higher credit score could help you qualify for a better interest rate.

Your credit report will show when and how many times you’ve tried to access credit, and this can impact your credit rating. You can access your credit score for free every three months through credit reporting bodies Ilion, Experian and Equifax.

Our real life guide includes some tips that could help improve your credit report.

We’re here to help

While these tips can assist with your planning for a home loan application in the future, there are many options for self-employed people who are looking to get a home loan but have not yet been successful.

At Pepper Money, we have experience with a range of borrowers who are self-employed and we’re familiar with assessing the particular cash flows of small businesses. Our alternative documentation home loan (Alt Doc for short) is designed to meet the unique needs of self-employed or small business owners who can't provide the same income documentation required by traditional lenders and mortgage insurers.

When we assess an 'Alt Doc' application some of the things we look for are:

  • Has your business been ABN registered for at least 6 months?
  • Has your business been GST registered for at least 6 months?
  • Business Activity Statements (BAS)
  • Bank Account Statements


If you’re having trouble because of your type of employment or because your income type doesn't tick the right boxes, talk to one of our Lending Specialists on 137 377 to find out more about our self-employed home loans. Alternatively, leave an enquiry online or reach out to one of our accredited brokers. 

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Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.

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