I’m Self-Employed — How Do Lenders Assess My Income When Working Out How Much I Can Borrow?
Two self-employed borrowers earning the same amount can be approved for very different loan sizes — purely based on how their income is documented. Structure and timing are as important as the number on your tax return.
Self-employed income is assessed differently to PAYG income — and the difference matters significantly to how much you can borrow and which lenders will work with you.
The Standard Approach: 2-Year Average
Most lenders require two years of personal tax returns and two years of business financial statements. They take the lower of the two years — or in some cases the average — rather than your current income. If 2023 was a lean year and 2024 was strong, many lenders will base the assessment on the lower figure.
Low-Doc Loan Options
Some lenders offer low-doc or alt-doc products that accept business bank statements, BAS statements, or accountant declarations instead of full tax returns. These products typically come with higher rates or lower maximum LVRs. They’re a useful tool when tax return timing doesn’t align with a purchase opportunity.
What Improves a Self-Employed Application
- Clean, lodged tax returns for the past two financial years
- Stable or growing income trend — declining income raises flags
- Low personal debt — the self-employed are already assessed more conservatively
- A strong deposit — 20% or more opens up significantly more lender options
- An ABN registered for 2+ years — under 2 years and many lenders won’t lend at all
You may wish to speak with a licensed mortgage broker to assess your personal circumstances.
This is general information only. Lender policies for self-employed income vary significantly. Speak with a licensed mortgage broker with experience in self-employed applications. All loans are subject to lender approval.
Sources: APRA Prudential Practice Guide APG 223; ATO, Business Income and Tax Returns; ASIC MoneySmart, Self-Employed Borrowers 2025; MFAA Industry Intelligence Service Report 2025.
