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Low-doc loans for self-employed borrowers

Low-doc home loans exist for a specific borrower: self-employed, profitable, but without two years of tax returns that a mainstream bank will accept. In 2026, the product still exists but has narrowed considerably since its peak pre-GFC.

What counts as low-doc today

Mainstream low-doc requires:

  • One year of ABN activity minimum, though 18-24 months is preferred
  • GST registration and one to two BAS statements
  • A borrower-signed income declaration stating income, plus supporting evidence such as accountant’s letter or six months of business bank statements
  • LVR capped at 80% with LMI, though 60-65% no-LMI options exist with second-tier lenders

The era of “stated income, no verification” is over. Every lender now wants something to cross-check the declared figure.

The lender shortlist

Pepper, Bluestone, Liberty, La Trobe, Homeloans Ltd (now Resimac), Mortgage Mart, and a handful of smaller specialists. Westpac and CBA have low-doc products on paper but rarely approve in practice at LVRs above 65%.

Pricing

Expect 50-120 bps above standard full-doc rates. For a strong file (ABN 3+ years, business bank statements showing consistent deposits, property at 70% LVR in a metro area), you can get within 30 bps of full-doc pricing with the sharpest specialists.

The tax-return trap

Many self-employed applicants have two years of returns but the numbers look weak because their accountant has optimised for tax minimisation. Depreciation, director loans drawn, one-off expenses, and motor vehicle write-offs all reduce stated income. Before applying low-doc, we usually ask: can we “add back” these items, present the true cash-flow profile, and apply as full-doc? Often the answer is yes, and the pricing is 60-80 bps better.

Who low-doc genuinely suits

  • Recently self-employed borrowers (12-24 months trading) with strong forward pipeline
  • Contractors invoicing through their ABN with sporadic income timing
  • Business owners mid-acquisition who cannot yet show combined financials
  • Borrowers between ownership structures (sole trader → company) where old returns don’t represent current operations

For a borrower with three years of clean, representative tax returns, low-doc is almost always the wrong product. For anyone else in the self-employed category, it is often the only workable path.