Can you get a home loan as a self-employed or casual worker?

Self-employed couple with a home moving in to their first home

A recent World Bank report found that 16.6% of Australians were making a living outside the typical full-time work arrangement. But while freelancing and contract-based work might suit you, you're likely to run into some problems when trying to get a home loan approved.

When lenders examine home loan applications, one of the main things they like to see is a stable income. Along with a credit score that's free of any black marks, this signals to lenders that you can be trusted to keep up with your monthly repayments.

If you work in the gig economy and your paycheck varies from month to month, you'll have a harder time getting in lenders' good books than someone with a full-time job and a predictable income. A lender weighs applications through a risk assessment process, and not having a guaranteed stable income would be considered less secure in their books. Ultimately, these lenders want to make sure you can cover living expenses while making your monthly mortgage payments.

But while your journey will likely be more laborious than you’d like, that doesn’t mean you’ll never be approved for a home loan.

There are home loans that exist specifically for self-employed or contract workers, namely low doc home loans. These loans cater to people who can afford a mortgage but don’t have the standard documentation to prove it. They are available from the big banks, non-bank lenders, credit unions and building societies.

What documents do I need for a low doc home loan?

While there is no set standard on the exact documentation you need, most big banks ask for the following:

  • Proof that you have been working in the same industry for at least one year
  • 12 months worth of consecutive business activity statements, verified by the Australian Tax Office (ATO) or an accountant’s declaration
  • Up to six months worth of recent personal and business bank statements
  • Confirmation your income has been registered for GTS for a minimum of 12 months

How to increase your chances of getting a home loan:

Lenders are number driven, so being prepared before applying can help.

  • Speak to a lender early 
  • Track your personal and business spending
  • Keep records of your tax reporting
  • Know your bank statement and be prepared to answer any questions about your spending
  • Compare home loan lenders that offer low doc home loans

To find out how much you can afford to borrow, check out the Mozo home loan borrowing calculator. Simply input your annual income from your self-employed or contract work and start the first step of finding your future home.