loaneasyPlanning to build your dream home in Melbourne but unsure if the banks will take you seriously? You’re not alone. Many self-employed borrowers feel like they’re locked out of construction finance, especially if they’ve been trading for less than two years.
But there’s good news. There are affordable construction loans in Melbourne that cater to self-employed applicants, even if you don’t have two years of full financials.
It’s not about settling for second-best either. With the right approach, lender, and paperwork, you can still access competitive rates and a build structure that works with your income flow.
Here’s how.
Why Construction Loans Are Different (and Tougher for the Self-Employed)
When you build a home, the lender doesn’t just hand over the full loan amount upfront. Instead, the funds are released in stages, called drawdowns, as your build progresses.
These stages usually include:
● Base
● Frame
● Lock-up
● Fixing
● Completion
During construction, you typically make interest-only payments on the amount drawn so far. That can help with cash flow, especially if you’re still renting or paying off land.
But here’s where it gets tricky for self-employed borrowers: construction loans are riskier for lenders. So they ask for more documentation, more verification, and sometimes more deposit.
If your income isn’t straightforward, or if your ABN is less than 2 years old, you’re going to need to present your case differently.
Can You Get a Home Loan If You’ve Been Self-Employed Less Than 2 Years?
The short answer is: yes, it’s possible.
Many lenders still prefer to see 2 full years of financials (tax returns, NOA, BAS), but others will consider:
● 12 months of trading history if your industry experience is strong
● Accountant letters verifying your income and business stability
● BAS statements showing consistent turnover
● Business bank statements with inflow consistency
● Alternative documentation (“alt doc” loans)
That said, not all lenders offer these options. You’ll need to find one that’s both construction-friendly and flexible with home loans for the self-employed under 2 years.
This is where working with a broker becomes important. They know which lenders have recently updated policies, which ones allow BAS instead of tax returns, and which assess based on gross turnover or declared income.
What Makes a Construction Loan “Affordable”?
It’s not just the interest rate.
When evaluating affordable construction loans in Melbourne, look at:
● Stage payment fees: Some banks charge $150–300 per drawdown
● Valuation costs: Construction valuations can be more frequent
● Lender’s mortgage insurance (LMI): If borrowing over 80%, this can be expensive
● Progress payment timelines: If your bank is slow, it can delay your builder
● Switching fees post-build: Some lenders charge to roll into a long-term home loan
Even small differences in fees or timing can cost you thousands across the life of the build. So an affordable loan isn’t just about a sharp rate, it’s about total cost, flexibility, and fit for your project.
Tips to Strengthen Your Application If You’re Self-Employed
You don’t have to wait two years just to look good on paper. Here’s how to improve your chances today:
1. Get your accountant involved early
They can help verify income, prepare interim financials, and confirm the business is trading profitably.
2. Save a bigger deposit
If you can offer 15–20%, more lenders become available, and you’ll reduce or eliminate LMI.
3. Use BAS + bank statements as evidence
Some alt doc lenders accept these in place of tax returns, especially if lodged regularly.
4. Choose a fixed-price build contract
Lenders prefer certainty. Fixed contracts show the build cost is locked in.
5. Show your industry experience
If you’ve been employed in the same industry before going out on your own, mention it. Banks see this as lower risk.
Why Melbourne Is Still a Good Market to Build
Despite rising costs and tighter approvals, Melbourne construction loans are still going strong. Land is more affordable here compared to Sydney, and there are new estates opening up in suburbs like:
● Wollert
● Tarneit
● Cranbourne East
● Rockbank
● Officer South
These areas are seeing consistent infrastructure growth, which gives lenders more confidence in resale value, and that can work in your favour during a valuation.
If you’re self-employed and trying to get your first build across the line, these zones also tend to have more titled land available, making it easier to meet lender requirements.
Can You Use Government Grants or Support?
Yes, and you absolutely should.
Victoria still offers a $10,000 First Home Owner Grant (FHOG) for eligible new builds. Some lenders accept this as part of your deposit, reducing the upfront savings you need.
Also check whether you qualify for:
● Stamp duty concessions (especially under $600K)
● Regional First Home Buyer Scheme
● Shared equity programs or family pledge options
Your broker can structure your application to include these correctly, so they’re counted as genuine contributions.
Should You Go Direct to a Lender?
If your financials are complex, going directly to a bank can lead to frustration. Many branch lenders simply won’t know what to do with a builder contract + BAS-only self-employed profile.
Instead, working with a construction specialist broker gives you access to:
● Lenders that accept 1-year ABNs or alt doc evidence
● Construction loan pre-approvals with longer validity
● Real guidance on what each bank is like to work with
● Faster approvals because documents are packaged correctly
● Advice if your timeline shifts or you want to refinance later
That’s real value, not just in saving time, but in making sure the loan you get can actually carry you through the build.
Final Thoughts: Don’t Count Yourself Out
If you’ve recently gone self-employed, it’s easy to think banks won’t give you a fair go. But that’s not always true. There are lenders in the market who understand what it means to be a sole trader, a contractor, or a growing small business.
With the right strategy, it’s absolutely possible to secure affordable construction loans in Melbourne, even if you’re applying for home loans self-employed under 2 years.
Just make sure you’re not trying to figure it out alone. Talk to someone who understands both construction finance and self-employed borrowers, so you can build with clarity, not confusion.
Ready to start building? Speak to Loan Easy about construction loans designed for self-employed borrowers who don’t want to wait 2 years to get approved.