Being your own boss comes with plenty of perks — but when it comes to applying for a home loan, being self-employed can feel more like a disadvantage. Across Western Australia, tradies, contractors, and small business owners are finding it harder than ever to get approved by traditional lenders. But with the right advice, documents, and lending partner, securing a home loan while self-employed is not only possible — it can be straightforward.
At Pilbara Finance, we specialise in helping WA-based business owners, sole traders, and entrepreneurs access the finance they need — with fewer headaches and better outcomes. This guide is designed to walk you through the home loan process as a self-employed borrower in 2025 and show you how to improve your chances of approval.
Why Self-Employed Borrowers Face More Scrutiny
In 2025, lenders remain cautious after years of regulatory tightening and economic uncertainty. While home loan interest rates are more stable than they were in 2022–2023, credit policies are stricter than ever. And for self-employed borrowers, this means extra hoops to jump through.
Why? Because income from self-employment is seen as less predictable than a regular salary.
Lenders prefer PAYG applicants with stable jobs and payslips. But if you’re self-employed, your income might fluctuate month-to-month or even year-to-year. You might take advantage of tax deductions that reduce your taxable income on paper — even if your business is thriving in reality. Lenders don’t just want to know that you make money — they want proof that it’s consistent, sustainable, and sufficient to repay the loan.
Who Counts as Self-Employed?
You’re generally considered self-employed if:
- You operate a sole trader business
- You’re a contractor, freelancer, or consultant
- You own or co-own a company or trust
- You run a business partnership
This includes plumbers, electricians, carpenters, FIFO contractors, café owners, Uber drivers, and anyone else earning an income outside the standard PAYG system.
What Documents Do You Need for a Self-Employed Home Loan?
If you’re self-employed, lenders will assess your income using your business and personal financials. Typically, you’ll need:
Full-Doc Loan Requirements
These are for borrowers with complete and up-to-date financial records.
- Two years of personal tax returns and ATO Notices of Assessment
- Two years of business tax returns and financial statements (profit & loss, balance sheet)
- Business Activity Statements (BAS)
- Bank statements (personal and business)
- ABN/ACN and GST registration details
- Identification documents
- Details of any existing debts or liabilities
Low-Doc or Alt-Doc Loans
If your financials are incomplete or recently lodged, some lenders offer “low-doc” or “alt-doc” loan options.
These may require:
- 6–12 months of business bank statements
- An accountant’s letter confirming your income
- BAS for the last two or four quarters
- Evidence of invoices or contracts
Note: Low-doc loans often come with slightly higher interest rates or require a larger deposit (usually 20% or more). But they can be a lifeline for newer businesses or fast-growing contractors who haven’t yet lodged full financials.
How Lenders Assess Self-Employed Income
Here’s how lenders typically assess your borrowing capacity:
Average of the Last Two Years’ Income
If your income is relatively stable, lenders will average your last two years of taxable income from your tax returns.
Most Recent Year Only
If your latest financial year shows significantly higher income, some lenders may use that figure alone (especially if you can prove growth with BAS or other documents).
Add-Backs
Good brokers (like Pilbara Finance) can work with lenders to “add back” certain expenses to improve your assessed income. These may include:
- One-off expenses
- Depreciation
- Interest paid on business loans
- Super contributions above compulsory amounts
Common Challenges for Self-Employed Borrowers
Inconsistent Income
Seasonal businesses or contractors with variable work may struggle to prove consistency. Lenders prefer to see steady income over 24 months.
Minimal Taxable Income
Claiming lots of deductions is great for tax time — but it can make you look less creditworthy on paper. That’s where add-backs and alternative assessments help.
Recently Self-Employed
If you’ve been self-employed for less than two years, your options may be limited. Some lenders require at least 24 months in business — but others may consider just 12 months with strong evidence of income and industry experience.
Business Structure Confusion
Loans can be harder to process if your business operates under a company or trust, especially if the structure isn’t explained properly. At Pilbara Finance, we know how to present these cases effectively.
What Lenders Are Looking for in 2025
Not all lenders assess self-employed applicants the same way. Some are far more flexible, especially second-tier lenders and non-bank institutions.
Here’s what the more self-employed-friendly lenders focus on:
- Business profitability over time
- Industry experience (e.g., 5+ years as a tradie)
- Strong business cash flow
- Clean credit history
- Stable ABN registration (ideally 2+ years)
- Asset position (e.g., owned property, savings)
How to Improve Your Chances of Home Loan Approval
If you’re planning to apply for a home loan this year, here’s what you can do to boost your chances:
Get Your Tax Returns Up to Date
Lenders want to see recent, lodged tax returns — even if you’re going for a low-doc loan.
Speak to an Accountant
Make sure your financials are in order and present your income in a way lenders understand. An accountant’s letter can make or break a low-doc application.
Separate Business and Personal Finances
Keep clean business records and separate bank accounts. This makes your income easier to assess — and helps you track your financial health.
Reduce Unnecessary Debts
Credit card limits and personal loans can reduce your borrowing power. Try to pay down these debts or reduce credit limits before applying.
Build a Larger Deposit
A bigger deposit gives you more loan options and may allow you to avoid Lender’s Mortgage Insurance (LMI).
Work With a Broker Who Understands Self-Employment
That’s where we come in. At Pilbara Finance, we know how to package your application, choose the right lender, and explain your income in a way that gets you across the line.
Why WA Business Owners Choose Pilbara Finance
WA business owners trust us because we:
- Understand the unique needs of self-employed borrowers
- Know which lenders are flexible with contractors and company directors
- Simplify the process — from paperwork to approval
- Are WA-based and service clients across the state
- Focus on outcomes, not excuses
Whether you’re a FIFO welder, café owner, tiler, or digital marketer — we know how to make your business work for you when it comes to lending.
Final Thoughts
If you’re self-employed and dreaming of home ownership, don’t let outdated lending rules stand in your way. In 2025, there are more flexible lenders than ever — and with the right guidance, you can access competitive rates and fair assessments.
At Pilbara Finance, we take the stress out of the process by handling the paperwork, negotiating with lenders, and helping you put your best foot forward.
Ready to Get Started?
Let’s find out what you’re eligible to borrow — no cost, no obligation.
Call now on 08 9122 3929 or complete the contact form to the right.
