Low doc home loans for self-employed borrowers

Full doc vs low doc

A full doc application uses your personal and business tax returns and ATO notices of assessment, for recent years, to show a stable income. If your returns are up to date and your income is steady, this is usually the cheaper path.

Low doc (often called alt doc) loans accept other evidence, such as business activity statements, business bank statements or a letter from your accountant, when tax returns don't yet reflect your current income: for example, when you've recently started a business or your income has grown sharply. Lenders generally compensate for the weaker evidence with a higher rate, a lower maximum LVR, or both.

Low doc vs no doc: what the law requires

A 'no doc' loan, approved on your word alone, doesn't fit the rules for regulated home loans. Under the National Credit Act a lender must make reasonable inquiries about your financial situation and take reasonable steps to verify it, and ASIC's guide RG 209 says a lender can't simply rely on a declaration in an application when other information contradicts it. Pepper Money notes that loans requiring less information were common before the global financial crisis and that, after the national credit laws were introduced, they were no longer offered to consumers in that form.

What remains is low doc, or alt doc: different evidence of the same income. For a self-employed borrower, RG 209 lists sources such as recent income tax returns, business activity statements, a statement from your accountant about your actual or likely income, financial statements for related business entities, and business and personal bank statements.

Which lenders offer low doc loans?

Four specialist non-bank lenders that describe low doc or alt doc home loans on their own sites are below, alphabetically. We don't review them, rank them or quote their rates, and each sets its own criteria: read the lender's current terms, or ask a broker, before you apply.

Low doc home loan rates: how much more they cost

We don't quote low doc rates: they change often and differ by lender, LVR and the evidence you provide, and the RBA's lending rate figures don't separate them. What is consistent is the structure. Lenders generally price weaker income evidence with a higher rate, a lower maximum LVR, or both, and the loading usually rises with the LVR. Above 80% LVR you'll usually pay lenders mortgage insurance as well.

Two comparisons are worth making before you apply. First, compare the low doc loan's comparison rate with what a full doc loan would cost if your tax returns can be brought up to date: Pepper Money, for example, says full doc self-employed applicants get the same rates and LVRs as PAYG borrowers. Second, run both rates through the mortgage repayment calculator to see what the difference costs each month.

Low doc documents checklist

Low doc doesn't mean no documents: a lender still has to verify your income, using business income evidence instead of, or as well as, tax returns. ASIC's guide RG 209 lists the kinds of evidence a lender might use for a self-employed borrower. Ask each lender for its own list before you apply.

• Business activity statements (BAS), which show your business turnover and GST over recent quarters
• Business bank statements, showing income going into the business account
• Personal bank statements, showing what you pay yourself and your living costs
• A statement or declaration from your accountant about your actual or likely income
• Financial statements for related business entities, such as a company or trust you trade through
• Your most recent income tax returns, if you have them
• Your ABN and GST registration details: Pepper Money, for example, needs 6 months of GST and ABN registration for an Alt Doc application

Pros and cons of low doc loans

A low doc loan solves a timing problem, at a price.

• Pro: you can buy or refinance before your tax returns show your current income
• Pro: it uses evidence a business already produces, such as BAS and bank statements
• Pro: you can refinance to a full doc loan once your returns catch up
• Con: rates are generally higher than on a full doc loan
• Con: maximum LVRs are lower (85% at Liberty), so you need a bigger deposit or pay LMI
• Con: fewer lenders offer them, mostly specialist non-bank lenders
• Con: you are legally responsible for any income declaration you sign

Why low doc applications are declined

Lenders don't publish full decline criteria, but the responsible lending rules explain most declines. Under RG 209 a lender must verify your financial situation and can't rely on a declaration that other information contradicts, so the common problems are evidence problems:

• The documents don't verify the income in the application, for example BAS turnover or bank statement deposits that don't support it
• The lender assesses that you couldn't meet the repayments without substantial hardship, so the loan would be unsuitable
• The ABN or GST registration is newer than the lender's minimum (6 months at Pepper Money for Alt Doc)
• The loan is above the lender's maximum LVR for low doc lending (85% at Liberty)
• Unexplained debts, missed repayments or tax debts that the statements reveal

Low doc vs bad credit (specialist) loans

They are different products for different problems. A low doc loan is about how you prove your income; a specialist or 'bad credit' loan is about your credit history, such as defaults or missed repayments. Some non-bank lenders offer both, and each has its own pricing and LVR limits. Neither means approval is easy: every licensed lender must still assess that the loan isn't unsuitable for you.

If credit history is the issue, start by checking your credit report: Moneysmart says you have a right to a free copy every 3 months, and errors can be corrected.

Moving from low doc to full doc

A low doc loan works best as a bridge. Plan the exit from the start:

• Lodge your personal and business tax returns on time, so you build the notices of assessment full doc lenders ask for
• Keep business and personal money in separate accounts
• Once you have the tax return history a full doc lender wants (Pepper Money's full doc route uses one or two years), compare full doc loans on the comparison rate
• Check the costs of switching, including discharge and government fees and any break cost if you are fixed, with our refinance calculator
• Ask your current lender whether it will move you to a full doc product before you apply elsewhere

How much deposit do you need for a low doc loan?

It depends on the lender. Liberty's low doc loans have a maximum LVR of 85%, which means at least a 15% deposit, plus purchase costs, and La Trobe Financial's Lite Doc loan lends up to 80% with no LMI. Pepper Money's low doc page lists loans up to $3M at 95% LVR, and Bluestone says self-employed borrowers can borrow up to 90% LVR without LMI. Elsewhere, above 80% LVR you'll usually pay lenders mortgage insurance. See low deposit home loans.

What 'responsible lending' means for self-employed borrowers

Under the National Credit Act, a lender must make reasonable inquiries about your financial situation and your requirements and objectives, take reasonable steps to verify your financial situation, and assess that the loan isn't unsuitable for you. ASIC's guidance (RG 209) sets out how. So even on a low doc loan, expect questions about your business, your expenses and how you'll repay, and some form of verification.

APRA also expects the banks it regulates to assess serviceability at the loan rate plus a buffer of at least 3 percentage points.

Lenders we review that accept self-employed income (full doc)

These lenders lend to self-employed borrowers who can document their income in the usual way, which is different from a low doc loan. Unloan accepts self-employment income alongside PAYG income, paid in Australian dollars, for up to two borrowers. Athena offers 'Tailored' loans for self-employed borrowers, companies and trusts. Bankwest lists self-employed borrowers among the situations it lends for. Most major banks also lend to self-employed borrowers on a full doc basis; ask each for its self-employed document checklist.

Borrowing through a company or trust

If you want the property owned by your company or trust, check product eligibility first, because many mainstream loans are for individuals only. CommBank's Digi Home Loan, for example, isn't available to company or trust borrowers, and Unloan doesn't accept properties held by a trust or company. Athena's Tailored range includes company and trust lending that takes future rental income into account.

Ownership structure also affects tax and state land tax, so get advice from your accountant before you choose the borrower.

Self-employed buyers and the 5% Deposit Scheme

Being self-employed doesn't rule you out of the 5% Deposit Scheme. Its eligibility rules are about citizenship, age, prior property ownership, owner-occupation and the price cap, and since 1 October 2025 there is no income cap. What you do need is a participating lender that will approve your loan on your income evidence, so ask each participating lender about its self-employed documentation before you apply.

How to improve your chances

A few things make a self-employed application easier to approve.

• Lodge tax returns on time; lenders value up-to-date notices of assessment
• Keep business and personal finances in separate accounts
• Reduce other debts, including business credit cards in your name
• Save a larger deposit: a lower LVR opens up more lenders and better rates
• Consider a broker who knows which lenders accept your income evidence