Getting a home loan as a first home buyer is hard enough. Add self-employment to the mix, and it can feel like you’re locked out before you’ve even started. But the truth is, self-employed borrowers aren’t out of options—they just need the right structure, strategy, and support.

This guide breaks down what first home buyers who are self-employed need to know, how loan approval really works behind the scenes, and the types of home loans that make the most sense for your scenario.

Why Self-Employed Borrowers Need a Different Approach

Traditional home loan assessments are built for salaried employees. Regular income, predictable pay cycles, and clean tax returns make for easy credit scoring. But when you’re self-employed, income can be seasonal, financial statements more complex, and tax efficiency can work against you in a loan application.
Self-employed borrowers face these key challenges:
● Inconsistent income patterns: Lenders often average out earnings over two years, which can penalise growth years.

● Lower declared income: Tax minimisation strategies can reduce your assessable income, even if your cash flow is strong.

● Documentation gaps: You may not have PAYG summaries or regular payslips, which some lenders still request by default.

This is why specialist knowledge matters. A self-employed home loan expert understands which lenders look beyond surface-level numbers, and how to package your finances properly.
The First Home Buyer Traps to Avoid When Self-Employed
Trying to apply like a PAYG borrower is the first mistake many self-employed buyers make. Here are some of the most common traps:
1. Relying on your bank
Your main bank might not be the best option. Many big banks take a conservative view of self-employed income and won’t approve loans without two full years of tax returns, even if your business is thriving.
2. Submitting incomplete or misaligned documents
Even strong self-employed applicants can be rejected because their documents don’t match up. ABN registration dates, GST status, and business income declarations need to align clearly across tax returns, BAS statements, and financials.
3. Not forecasting future income
Some lenders will consider future income projections or a growing business, but only if the case is clearly presented. Most applicants don’t realise this is possible and end up stuck with lenders who don’t offer it.

Best First Home Buyer Loan Options for the Self-Employed

Let’s look at the types of loans that work best for self-employed first home buyers and why.
1. Low Deposit Loans with Alt Doc Options
If you have solid cash flow but limited deposit savings, some lenders offer 90–95% LVR loans with alternative documentation. These loans usually come with Lenders Mortgage Insurance (LMI), but with expert structuring, you can reduce the cost or negotiate it into the rate.
Tip: Ask your broker if your ABN and GST registration history can support an Alt Doc loan with a high LVR. Not all lenders offer this, and most don’t advertise it publicly.
2. First Home Guarantee Scheme-Approved Lenders
The First Home Guarantee (formerly First Home Loan Deposit Scheme) allows eligible first home buyers to buy with as little as 5% deposit and no LMI, backed by a government guarantee.
Some participating lenders will accept self-employed applicants, but only if the income documents are prepared correctly. This is where expert guidance is essential—an accountant’s letter with vague earnings won’t cut it.
3. Specialist Lenders for Newly Self-Employed Borrowers
If you’ve been self-employed for less than two years but have industry experience, a few lenders will consider your application based on one year’s financials or bank statements.
These lenders often allow:
● 12 months’ ABN activity

● 6 months’ BAS

● Industry experience or prior employment evidence

They tend to charge slightly higher interest rates, but they can be a great stepping stone into the market while you build your financials.
4. Guarantor Loans for Self-Employed Borrowers
A guarantor loan can allow you to borrow up to 100% of the property value (plus costs) without needing LMI. If a parent or family member is willing to guarantee part of your loan, lenders may be more flexible with income assessments.
Guarantor loans can be useful for self-employed borrowers with strong business cash flow but limited deposit due to reinvestment.
What Documents You’ll Need to Prepare
Even if you’re going the Alt Doc route, you still need to present your financial position clearly. Here’s a checklist of documents most lenders will require:
● Most recent two years of business and personal tax returns

● Notices of Assessment from the ATO

● ABN registration details and GST status

● At least six months’ worth of business bank statements

● Year-to-date BAS statements

● Profit and Loss Statement (ideally from your accountant)

● Sometimes: Accountant’s letter verifying income

Preparing these in advance speeds up the application and strengthens your case with any lender.
How a Self-Employed Home Loan Expert Can Help
A specialist broker or loan processor isn’t just helping you fill out forms. They’re:
● Selecting the right lenders based on your financial story

● Advising what income sources to highlight—and what to leave out

● Avoiding submission errors that can get your application auto-declined

● Negotiating policy exceptions if you have strong mitigating factors

They also help you future-proof your loan structure. Many first home buyers plan to renovate, refinance, or invest in the next 3–5 years. A poorly structured loan can restrict your borrowing power later on.
The Long-Term View: Structuring for Future Growth
If you’re self-employed, your income and assets may grow rapidly. A good broker will help you set up your first home loan with flexibility:
● Offset accounts to manage irregular income

● Interest-only options if your cash flow supports it

● Split loans for future redraw or refinance options

● Refinancing strategy after one full financial year of strong results

Planning beyond the first purchase gives you more leverage and control over your property journey.
Common Myths Holding Self-Employed Buyers Back
Let’s clear up a few misconceptions:
● Myth: “I need two years of tax returns.”
Truth: Some lenders accept one year, or even just BAS and bank statements.

● Myth: “I can’t get approved with a 5% deposit.”
Truth: With First Home Guarantee or guarantor support, this is possible—even self-employed.

● Myth: “My bank already declined me, so no one else will approve me.”
Truth: Different lenders have completely different policies for self-employed loans.

● Myth: “I’ll wait until my income looks better next year.”
Truth: The right structure can get you approved now, especially if you’re using retained profits or have consistent cash flow.

Conclusion: The Right Help Makes All the Difference

Buying your first home when you’re self-employed isn’t out of reach—it just requires a tailored strategy. With the right documentation, lender selection, and expert support, you can get into the market sooner and with confidence.

The best first home buyer loans for self-employed borrowers aren’t found by chance. They’re built around your business story, your income flow, and your long-term goals.