If you're self-employed and applying for a home loan, your accountant is one of your most powerful allies. A letter from them — known as an accountant's letter or CPA letter — can clarify income, confirm business viability, and tip borderline applications into approval.
But it has to be the right kind of letter. A vague one-liner won't cut it. Here's what lenders actually want to see.
Why Lenders Ask for an Accountant's Letter
Self-employed income is harder to verify than PAYG income. There's no payslip. Tax returns can understate actual income due to deductions. And business income can fluctuate.
An accountant's letter bridges the gap — it provides professional confirmation of your income position from someone with legal responsibility for their representations.
When Is It Required?
Not all lenders ask for one, but it's commonly requested when:
- Your taxable income is significantly lower than your actual earnings
- You have add-backs (depreciation, one-off expenses) that boost your assessable income
- You're a company director taking a combination of salary and dividends
- You have trust distributions as part of your income
- You've had one low-income year followed by recovery
- You're applying for a low doc loan using BAS or bank statements
What the Letter Must Include
A lender-ready accountant's letter typically needs:
- Your accountant's letterhead — including their name, firm, address, phone, and CPA/CA membership number
- Confirmation of your ABN/business structure — sole trader, company, trust, or partnership
- Confirmation of how long you've been in business — ideally 2+ years
- Your income for the past 1–2 financial years — with specific dollar amounts
- A statement that the business is financially viable and expected to continue
- Any add-backs explained — e.g. "depreciation of $18,500 has been added back to assessable income"
- The accountant's signature and date
What It Does NOT Need to Say
Your accountant doesn't need to guarantee your income or predict the future. They're confirming historical facts and giving a professional opinion on viability — not underwriting your loan.
Overclaiming in the letter (e.g. projecting future income beyond what the business history supports) can actually raise red flags with credit assessors.
Add-Backs: The Key Income Booster
One of the most valuable things an accountant's letter can do is explain add-backs. These are legitimate deductions that reduce your taxable income but don't represent real cash outflow — so lenders can add them back to calculate your true borrowing power.
Common add-backs include:
- Depreciation on equipment or vehicles
- One-off business expenses (legal fees, restructuring costs)
- Amortisation of goodwill
- Excess superannuation contributions
With a properly documented letter, these amounts can significantly increase the income figure lenders use to assess your loan.
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Which Lenders Accept Accountant's Letters?
Most major banks and many non-bank lenders accept accountant's letters as supporting evidence. However, the weight they give it varies:
- Major banks (Big 4) — Will accept letters but usually still require 2 years' tax returns as the primary evidence
- Non-bank full doc lenders — May rely more heavily on the letter if it's detailed and professional
- Low doc lenders — The letter can sometimes substitute for tax returns entirely, alongside BAS statements
What Happens If You Don't Have an Accountant?
If you're doing your own tax returns, most lenders won't accept a self-prepared letter. You'll need someone with a current CPA or CA registration.
If you don't currently have an accountant, it's worth engaging one before you apply — especially if your income is complex. The cost is minimal compared to the loan amount at stake.
How to Ask Your Accountant for the Right Letter
Don't just say "I need a letter for my home loan." Give them the lender's specific requirements. A good approach:
- Share the lender's checklist or ask your broker to send it
- Ask them to include specific income figures (not ranges)
- Make sure they confirm business viability in writing
- Ask them to list any add-backs with dollar amounts
Can a Broker Help?
A mortgage broker who specialises in self-employed lending can review your accountant's letter before you submit it — and tell you exactly what changes will strengthen the application. They also know which lenders are most likely to approve your specific income structure.
Bottom Line
An accountant's letter won't save a weak application — but for a strong one, it can be the document that confirms the deal. Get it right, and it's one of the most useful tools in your self-employed borrowing toolkit.
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