Being your own boss has plenty of upsides — but when it comes to getting a mortgage, self-employed borrowers often have to work a little harder to prove their income. The good news is that with the right preparation, self-employment is rarely a deal-breaker.
Why it's different for the self-employed
When you're a salaried employee, your income is easy for a bank to verify with a couple of payslips. For self-employed borrowers — sole traders, contractors, and company owners — income can vary year to year and is bound up with business expenses and tax planning. Lenders therefore look more closely, and usually want to see a track record.
What lenders typically want to see
Most banks will ask for around two years of trading history, supported by:
- Two years of business financial statements (profit & loss and balance sheet)
- Your personal tax returns or income tax assessments for the same period
- Recent business and personal bank statements
- GST returns, if you're registered
They'll use this to work out a reliable, sustainable income figure — often based on an average of the past two years, or the lower year if income is trending down.
Add-backs can lift your assessable income
Your financial statements are usually structured to minimise tax, which can understate the income a lender will credit you with. Certain expenses can sometimes be added back to your profit for serviceability purposes — for example depreciation, one-off or non-recurring costs, and interest on debt being repaid. Presenting these correctly can make a real difference to how much you can borrow, and it's an area where an adviser and your accountant can add value.
If you've been trading less than two years
Newer businesses can find the main banks harder to satisfy. Options worth exploring include:
- Waiting until you have two full years of financials, if you're close
- Non-bank lenders, some of which offer alt-doc or low-doc lending with alternative income verification (often at a higher rate)
- Strengthening other parts of your application — a larger deposit, clean accounts and minimal short-term debt
The same rules still apply
Self-employed borrowers are assessed against the same framework as everyone else: deposit and LVR requirements, debt-to-income limits, and serviceability testing at a stressed interest rate (commonly around 8%). A strong, well-documented application helps you make the most of that framework.
Tips to strengthen your application
- Keep your accounts clean, current and prepared by an accountant
- Avoid large undeclared or cash income that won't show up in your financials
- Reduce or clear high-interest consumer debt before applying
- Save a larger deposit where you can — it widens your options
How Borro Finance can help
We work with both bank and non-bank lenders and understand how each assesses self-employed income. If you're self-employed and thinking about buying or refinancing, get in touch and we'll help you put together a strong application.
This article is general information only and is current as at June 2026. It is not personalised financial advice and does not take your individual circumstances into account. Lending criteria and interest rates vary by lender and can change at any time. Please seek advice from a licensed financial adviser, and consult your accountant on tax matters, before making any decisions.