How to Get a Home Loan with Non-Standard Income in Australia: A Complete Guide

For many Australians, the traditional path to homeownership involves presenting a steady stream of payslips and a permanent employment contract. But what if your income doesn’t fit that mould? With the rise of the gig economy, freelancing, and self-employment, a growing number of borrowers are finding themselves locked out of standard mortgage products. According to the Australian Bureau of Statistics, there were over 2.5 million actively trading businesses in Australia as of June 2024, with sole traders making up a significant portion. This guide will walk you through the strategies, loan types, and lender expectations for securing a home loan when you have non-standard income.


Understanding Non-Standard Income in the Australian Mortgage Market

Non-standard income refers to any earnings that aren’t a regular salary from an employer. This includes:

• Self-employment income: Sole traders, partnerships, and company directors.
• Freelance and contract work: Irregular payments from multiple clients.
• Gig economy earnings: Driving for rideshare services, food delivery, or task-based platforms.
• Investment income: Rental properties, dividends, or trust distributions.
• Casual or seasonal work: Fluctuating hours without guaranteed shifts.

Lenders typically classify these as higher risk because income can be unpredictable. However, with the right approach, you can demonstrate your ability to service a loan.

How Lenders View Non-Standard Income

When assessing a standard home loan application, lenders rely on the “three Ps”:

1. Payslips – Proof of regular income.
2. PAYG summaries – Annual tax statements from an employer.
3. Permanent employment – Job security.

For non-standard income earners, these documents are often unavailable or insufficient. Instead, lenders will scrutinise:

• Tax returns and Notices of Assessment (NOA) from the Australian Taxation Office (ATO).
• Business Activity Statements (BAS) for GST-registered businesses.
• Bank statements showing consistent deposits.
• Accountant letters verifying income.

Low-Doc and Alt-Doc Home Loans Explained

For borrowers who can’t provide full financial documentation, low-documentation (low-doc) and alternative-documentation (alt-doc) loans are the primary solutions.

What is a Low-Doc Loan?

A low-doc loan is designed for self-employed borrowers who may not have up-to-date tax returns or standard income proof. Instead of payslips, you can use:

• Business Activity Statements (BAS).
• Business bank account statements.
• Accountant declarations.
• Interim financial statements.

Key features of low-doc loans (2025 data):

Data sourced from major Australian lender websites, updated May 2025.

Alt-Doc Loans: A Middle Ground

Alt-doc loans are similar but may allow for a broader range of verification methods. Some lenders accept:

• 6-12 months of business bank statements showing turnover.
• A letter from a registered tax agent confirming income.
• Interim profit and loss statements.

These loans often have slightly better rates than low-doc products, but still carry a premium over full-doc loans.

Eligibility and Documentation Requirements

To qualify for a low-doc or alt-doc home loan in Australia, you typically need:

1. ABN and GST registration: Most lenders require your Australian Business Number (ABN) to have been active for at least 12-24 months. GST registration is often mandatory.
2. Income consistency: While income can fluctuate, lenders look for a stable or growing trend. For example, three consecutive quarters of increasing BAS statements can strengthen your case.
3. Clean credit history: A strong credit score (above 650) is crucial, as lenders offset the risk of unverified income with stricter credit checks.
4. Larger deposit: Because low-doc loans have lower maximum LVRs, you’ll need at least a 20% deposit (and often 30-40%) to avoid excessive LMI costs.

Sample Documentation Checklist

• Last 2 years’ personal tax returns and NOAs (if available).
• Last 4 quarters’ BAS (for GST-registered).
• Last 6-12 months’ business bank statements.
• Accountant’s letter confirming income and business viability.
• Interim profit and loss statement (if recent tax returns are outdated).
• Evidence of all debts and assets.

How to Improve Your Chances of Approval

1. Get Your Financials in Order

Even if you’re using low-doc, having complete and accurate financial records is essential. Lenders will still scrutinise bank statements for red flags like overdrafts or irregular spending. Consider working with a mortgage broker who specialises in self-employed borrowers.

2. Reduce Your Debt-to-Income Ratio

Pay down credit cards, personal loans, and other liabilities. Lenders calculate your debt-to-income (DTI) ratio to gauge your ability to repay. A DTI below 6 is generally preferred.

3. Save a Larger Deposit

A deposit of 30% or more can unlock better interest rates and reduce LMI costs. It also signals financial discipline to lenders.

4. Demonstrate Income Stability

If your income is seasonal or project-based, provide evidence of long-term contracts or recurring clients. For gig workers, platforms like Uber or Airtasker may provide annual earnings summaries.

5. Consider a Guarantor

A family guarantor can help you borrow more or avoid LMI. However, this puts the guarantor’s property at risk, so legal advice is recommended.

Comparing Lenders: Who Offers Non-Standard Income Loans?

Not all lenders are created equal when it comes to non-standard income. Below is a comparison of lender types and their typical offerings in 2025:

Rates and policies are indicative and subject to change. Always verify with the lender directly.

The Application Process Step by Step

1. Initial Assessment: Meet with a mortgage broker to review your financial situation and determine which lenders are likely to approve you.
2. Document Collection: Gather all required documents (see checklist above).
3. Pre-Approval: Submit a preliminary application to gauge borrowing capacity without a full credit check.
4. Formal Application: Complete the lender’s application form and provide supporting documents.
5. Lender Assessment: The lender reviews your income, credit history, and property valuation.
6. Conditional Approval: You may receive approval with conditions (e.g., provide updated BAS).
7. Unconditional Approval & Settlement: Once all conditions are met, the loan proceeds to settlement.

Risks and Considerations

• Higher Interest Rates: Expect to pay a premium of 0.5% to 2.5% above standard variable rates.
• LMI Costs: Low-doc loans often require LMI even with a 20% deposit, adding thousands to your upfront costs.
• Fewer Features: Some low-doc loans lack offset accounts or redraw facilities.
• Potential for Declined Applications: If your income cannot be reasonably verified, even alt-doc lenders may decline your application.

FAQ

Can I get a home loan if I’ve been self-employed for less than 12 months?

It’s challenging but not impossible. Some specialist lenders may consider applications with 6 months of trading history if you have strong BAS statements and a solid business plan. However, most lenders require at least 12 months, and 2 years is preferred for better rates.

What credit score do I need for a low-doc home loan?

While there’s no universal minimum, a score above 650 is generally recommended. Some non-bank lenders may accept scores as low as 550, but interest rates will be significantly higher. Check your credit score for free through providers like Equifax or Experian before applying.

Are there any government schemes for self-employed home buyers?

The First Home Guarantee (FHBG) and Regional First Home Buyer Guarantee are available to eligible self-employed applicants, but you must provide tax returns and NOAs to demonstrate income. These schemes allow a 5% deposit without LMI. For the latest criteria, visit the National Housing Finance and Investment Corporation (NHFIC) website.

How do lenders calculate my income if it fluctuates?

Lenders typically use one of two methods:

• Average over 2 years: The most common approach, where they average your taxable income from the last two tax returns.
• Most recent year: If your income has increased, some lenders will use the most recent year’s figure, but this may require additional documentation.

For BAS-based loans, they may annualise your latest quarterly figures, but they’ll discount the total to account for business expenses.

Can I use rental income from investment properties to qualify?

Yes, most lenders will consider a portion of your rental income (usually 75-80%) when calculating serviceability. You’ll need to provide lease agreements and rental statements. If the property is yet to be purchased, a rental appraisal from a real estate agent may suffice.

References

1. Australian Bureau of Statistics, “Counts of Australian Businesses, including Entries and Exits,” June 2024. https://www.abs.gov.au/statistics/economy/business-indicators/counts-australian-businesses-including-entries-and-exits/latest-release
2. Australian Taxation Office, “Self-employed and contractor obligations,” updated 2025. https://www.ato.gov.au/businesses-and-organisations/self-employed-and-contractors
3. MoneySmart (ASIC), “Home loans for the self-employed,” 2025. https://moneysmart.gov.au/home-loans/home-loans-for-the-self-employed
4. National Housing Finance and Investment Corporation, “First Home Guarantee,” 2025. https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/first-home-guarantee/
5. Pepper Money, “Low Doc Home Loans,” product page accessed May 2025. https://www.pepper.com.au/home-loans/low-doc-home-loans