If you’re self-employed, contracting, or running your income through a company or trust, you’ve probably had a version of this experience: you know you earn well, you know you can afford the repayments, and yet the lender’s number comes back looking nothing like reality.
You’re not imagining it. Here’s what’s happening.
The core problem: lenders read accounts differently than you do
A PAYG employee hands over two payslips and a lender knows what they earn. Done.
For a business owner, contractor or professional operating through a structure, income is a construction. It has to be assembled from tax returns, financial statements, distributions, retained profits and add-backs — and every lender assembles it slightly differently.
The result is that two lenders can look at exactly the same set of financials and arrive at borrowing capacities that differ substantially. Not marginally. Substantially.
This isn’t a loophole. It’s the direct consequence of lenders having different credit policies, and it’s the single biggest reason self-employed borrowers benefit from someone who knows those policies.
Where the differences show up
Which year’s figures count. Some lenders average your last two years. Some use the most recent year. Some use the lower of the two. If your business is growing, that choice alone can transform your outcome.
Add-backs. Your accountant works to legitimately minimise your taxable income. That’s their job. But it means your tax return understates your actual cash position. Lenders will “add back” certain items — depreciation, one-off expenses, some superannuation contributions, interest on debts being refinanced, and others. Which items a lender adds back varies significantly, and it’s often where the biggest gains hide.
Retained profits. If your company retains profit rather than distributing it, some lenders will recognise that as income available to you. Many won’t.
Trust distributions. How distributions are treated — and whether the trust’s own income can be counted — differs by lender and by structure.
Time in business. Most lenders want to see a track record. Some are more flexible than others, particularly if you were previously employed in the same field. If you left a salaried role to contract in the same industry, that continuity is worth arguing.
Contractor income. A long-term contractor with a single ongoing client is assessed differently by different lenders — some treat you close to PAYG, others treat you as fully self-employed with all that entails.
The professionals’ advantage
If you’re in certain professions, there’s a second layer worth knowing about. Some lenders offer LMI waivers and other concessions to specific occupations — lawyers, accountants and certain other professionals among them. Which occupations qualify differs by lender, but the mechanics are the same in each case — we explain how the waivers work in our guide for medical professionals, see do doctors really get better home loans?
The catch that’s specific to this group is that many of these same professionals also have complex income — a partner in a law firm, an accountant with a practice, an IT consultant on an ABN. So you’re navigating both issues at once: finding a lender with the concession and one that reads your income favourably. Those aren’t always the same lender, and the trade-off is worth working through properly.
What you’ll need to have ready
Requirements vary, but for most self-employed applications expect to provide:
- Two years of personal tax returns and ATO notices of assessment
- Two years of business financial statements— profit and loss, and balance sheet
- Business bank statements
- BAS statements, in some cases
- An accountant’s letter, for certain lenders or scenarios
- Trust deeds and company documents, if you operate through those structures
- Evidence your ATO obligations are current— outstanding tax debt is a red flag for most lenders
A note on accountant’s letters: these are used by some lenders to verify income or confirm the sustainability of a business, but they’re not a universal substitute for financials, and different lenders will accept them in different circumstances and formats. Your accountant may also be reluctant to certify things beyond what they can properly attest to — which is entirely reasonable, and worth respecting.
The timing point nobody tells you
If you’re planning to buy in the next couple of years, talk to a broker before your accountant finalises this year’s return — not after.
The way your income is presented has a direct effect on borrowing capacity. There’s often a legitimate tension between minimising tax and maximising serviceability, and that tension is much easier to manage before the return is lodged than afterward.
This isn’t about doing anything creative with your tax. It’s about your accountant and your broker understanding each other’s objectives while there’s still time to plan.
Why a CPA-qualified broker helps here
Tiger Mortgage’s founder, Raymond Liao, is a CPA-qualified, fully accredited mortgage broker and a former banker — a background that’s uncommon in broking.
For self-employed borrowers, that combination matters in a specific way: it means the person building your application can actually read your financial statements, understand your structure, and have a productive conversation with your accountant rather than just forwarding PDFs to a lender and hoping.
We work with contractors, consultants, ABN holders, practice owners, company directors and professionals across Sydney and the Gold Coast.
👉 See our finance for professionals page, or book a conversation.
Frequently asked questions
How long do I need to be self-employed to get a home loan? Most lenders want a track record of trading history, though requirements differ and some are more flexible — particularly where you have prior experience in the same industry. It’s worth checking rather than assuming you’re ineligible.
Can I get a home loan with one year of financials? Some lenders will consider it in certain circumstances. Terms and pricing typically differ from a standard application.
What is a low doc home loan? A loan assessed using alternative income evidence — such as BAS statements or an accountant’s declaration — rather than full financials. These are still subject to responsible lending obligations, and they generally carry different pricing and conditions.
Do I need an accountant’s letter? It depends on the lender and your scenario. Some require one; many rely primarily on tax returns and financials.
Can I borrow through a family trust? Yes, though the lender panel is narrower and the assessment is more involved. The trust deed needs to permit the borrowing, and directors or beneficiaries are usually required to guarantee.
Will my HECS/HELP debt affect how much I can borrow? Yes — lenders account for compulsory repayments in serviceability. How they treat it, particularly when the balance is small, varies between lenders.
Does outstanding ATO debt stop me getting a loan? It’s a significant obstacle with most lenders. Address it early, and talk to your accountant about it well before you apply.
Next step
If your income doesn’t fit a simple payslip, that’s exactly what we handle. See finance for professionals, then book a conversation — ideally before your accountant finalises this year’s return.
This article is general information only and is not tax, accounting or financial advice. It doesn’t take into account your objectives, financial situation or needs. Lender policies change regularly. Please seek advice specific to your circumstances from your accountant and a licensed credit provider. Tiger Mortgage Pty Ltd (ABN 21 649 980 807), Credit Representative 532909 of Australian Finance Group Ltd, Australian Credit Licence 389087.
