What are add-backs and how do they increase borrowing power?

An add-back is a business expense added back to taxable income for loan assessment purposes. Depreciation, vehicle expenses, home office deductions, and one-off costs can be added back. For example, $95,000 taxable income plus $45,000 in add-backs = $140,000 assessed income — which can lift borrowing capacity depending on the lender.

Do I need a larger deposit as a self-employed borrower?

Not necessarily. Maximum LVR varies by lender, loan size and documentation type, and some lenders may lend above 80% LVR with LMI. A 20% deposit removes LMI entirely but is not required.

Alt doc (alternative documentation) sits between full doc and low doc. It typically uses a combination of BAS statements, bank statements, and an accountant's declaration rather than tax returns. It is commonly used when tax returns understate actual income.

Can I get an investment loan if I'm self-employed?

In many cases, yes. Investment property loans for self-employed borrowers follow the same process. Rental income from the investment is also factored into borrowing capacity — which often makes it easier to qualify.

How do lenders assess contractor income?

Contractors are assessed differently depending on whether they are on a day rate contract or project-based. Day rate contractors on long-term contracts are often assessed similarly to PAYG. Those on project-based income are assessed using 2 years' average income or the low doc pathway.

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Low Doc Self-Employed First Home Buyer Property Investors Islamic Finance Calculators

Self-Employed Specialist · ABN Accepted · Low Doc · Alt Doc

Self-Employed Home Loans Sydney —
Options When Banks Say No

By the Mortgagefy Team · Published 2026-04-07 · Last reviewed 2026-09-21

Banks built their forms for payslips. We explore add-backs, BAS statements and specialist lenders to help present your income as fully as possible — including when your ABN is under 2 years. ABN holders, sole traders, contractors, and company directors welcome.

Free, No-Obligation Assessment

Under 2 Years ABN Considered

Sole Traders · Contractors · Directors

BAS & Bank Statement Options

Call 0432 634 648

Mortgagefy Broker

Banks Were Built For Payslips.
You Don't Have One.

If you're self-employed, running a business, or contracting, the way banks assess income can work against you. Many standard bank systems lean on two years of consistent, PAYG-style income. Self-employed borrowers often legitimately reduce their taxable income through deductions, which can look weak on a standard application even when the business is healthy.

As a result, capable business owners can find their application assessed more conservatively than an employee's. That is a system issue, not a you issue, and there are often other pathways worth exploring. Outcomes depend on each lender's assessment and are never guaranteed.

Who We Help

No Payslips

Banks rely on PAYG payslips. We use BAS statements, bank statements, and accountant letters instead.

Fluctuating Income

Variable monthly income scares standard lenders. We present your income the right way for specialist lenders.

New ABN

ABN minimums vary by lender and early-stage ABNs face extra scrutiny. Confirm your lender's policy before applying.

Low Tax Returns

Your tax return understates your income. Add-backs let us present your actual earning capacity to lenders.

Our Clients

Who We Help

If your income doesn't fit in a standard bank form, you're our kind of client.

🧾

Sole Traders

ABN-registered individuals running their own business

🏢

Company Directors

Directors drawing salary or dividends from their company

💻

Contractors

IT, engineering, and professional contractors on day rates

🔧

Tradies

Plumbers, electricians, builders, and trade business owners

🎨

Freelancers

Designers, writers, consultants, and creative professionals

🤝

Partnership Owners

Business partners sharing income through a joint structure

🏗️

Project-Based Income

Variable or lumpy income from project-to-project work

🌱

New Business Owners

ABN holders under 2 years — specialist lender options available

Not sure which category you are?

Loan Types

Full Doc vs Low Doc vs Alt Doc

Three different ways to prove your income — your situation determines which one is right for you.

Widest Choice

Full Doc

Standard income verification using your tax returns and financial statements. Typically the widest lender choice and the most competitive pricing.

2 years personal & business tax returns

ATO Notice of Assessment

Business financials (P&L, balance sheet)

Add-backs can be applied

Best for: 2+ years ABN, good profitability, access to major banks

Low Doc

Minimal documentation — no tax returns required. Uses BAS statements or bank statements as income evidence instead.

Last 12 months BAS statements (or)

6–12 months business bank statements

Accountant's income declaration

Self-verification of income

Best for: early-stage ABN holders or when your tax return understates income (ABN minimums vary by lender)

Flexible

Alt Doc

Alternative documentation — a blend of income evidence when tax returns alone don't reflect your true income capacity.

BAS statements + accountant letter

Bank statements + income declaration

Mix of tax return + BAS evidence

Lender-specific flexible criteria

Best for: 1–2 years ABN, complex income structure, mixed evidence

Not sure which type applies to you? We'll assess your situation in a free 10-minute call.

The Add-Back Advantage

Your Tax Return May Understate Your Income.
Add-Backs Can Help.

Most self-employed borrowers legitimately reduce their taxable income through business deductions. Banks only see the bottom line — which looks terrible. Lenders that allow add-backs can add certain deductions back to your income for loan assessment, which may increase your assessed income and borrowing power. Add-back treatment varies by lender.

Depreciation on equipment & vehicles

Home office deductions

One-off business costs & non-recurring expenses

Personal superannuation contributions above SGC

Interest on business loans (where not income-producing)

Worked Example: The Add-Back in Action

Illustrative example — business owner, Newtown NSW

Without Add-Backs (Bank Assessment)

Tax return income $95,000

Estimated borrowing power ~$380,000

Add-Backs Identified:

Depreciation (vehicle + equipment)+$28,000

Home office deduction+$9,000

One-off fit-out expense+$8,000

Total add-backs+$45,000

With Add-Backs (Our Assessment)

Assessed income $140,000

Borrowing power ~$760,000

In this illustration, add-backs lift estimated borrowing capacity by about $380,000

Lender Types

How Different Lenders Assess Self-Employed Income

Lenders don’t all treat self-employed income the same way. Knowing which type may suit your situation is a big part of choosing where to apply.

Major & Regional Banks

Often assess self-employed borrowers on full documentation, usually 2 years of tax returns, and may apply their own add-back rules. Can be a strong fit when your tax returns already reflect your income.

Specialist & Non-Bank Lenders

Some use manual assessment and may consider alternative documentation such as BAS statements, business bank statements or an accountant’s letter. Pricing and fees can be higher than full doc loans.

Private & Niche Lenders

Policies are set case by case and usually suit complex or unusual situations. Terms, costs and requirements can differ significantly, so they need careful comparison.

General information only. ABN age, documentation, maximum LVR and add-back treatment all vary by lender and change over time. Confirm current requirements directly with your chosen lender before applying. All applications are subject to lender assessment.

Under 2 Years ABN

Started Your Business Recently? You Still Have Options.

The most common objection self-employed borrowers face is "come back when you've been operating for 2 years." That's a common bank rule, but policy varies by lender. Some specialist lenders assess newer businesses differently and may consider applications with less than 2 years of ABN history.

The key factors are: what income evidence you can provide, the strength of your deposit, and which lender your broker matches you to. We can help you understand which lenders may consider your ABN age before you apply anywhere.

See My Document Options

Under 6 months ABN

Options are very limited and usually depend on a strong deposit and other factors. Speak to us before applying anywhere.

6 – 12 months ABN

Some specialist lenders may consider applications at this stage, often using business bank statements or an accountant's letter. Pricing is often higher. Confirm your lender's ABN policy.

1 – 2 years ABN

More specialist options may open up, commonly using 1 year of tax returns or BAS statements. Assessment varies by lender.

2+ years ABN

A wider range of lenders may consider your application, including full doc options with major banks. Add-back treatment varies by lender.

Simple Process

How It Works

From first contact to settlement — here's what to expect.

Free Assessment

We review your income structure, ABN age, deposit, and goals. No cost, no obligation — just clarity on your options.

Document Strategy

We tell you exactly which documents to gather — and how to present your income to maximise your assessed borrowing capacity.

Lender Match

We identify lenders whose criteria may suit your income structure and compare options, so you know which to approach.

Application & Settlement

We prepare and lodge your application, then track it through to settlement. Approval is subject to lender assessment.

Self-Employed Case Studies

General Information Only

The following case studies are illustrative examples based on typical borrower scenarios. They do not represent specific individual clients. Actual outcomes depend on individual circumstances, lender assessment, and market conditions at time of application. Mortgagefy (Credit Representative No. 532656) provides credit assistance only and does not guarantee loan approval or specific outcomes.

📋 Illustrative Case Study

New ABN — Sole Trader, Burwood

In this scenario, a sole trader with 13 months of ABN history who had been declined by a major bank explored specialist lenders that consider BAS statements as evidence of income. Whether a lender approves depends on its own assessment.

What we did: Identified specialist lenders that consider a 1-year ABN, prepared BAS-based income evidence.

Illustrative example only. Individual outcomes vary based on loan amount, lender assessment, and personal financial circumstances.

📋 Illustrative Case Study

Low-Doc Pathway — Tradesperson, Lakemba

In this scenario, a self-employed tradesperson who was referred back by a bank explored an alt-doc pathway using BAS statements, comparing a specialist lender's LMI treatment against a standard bank quote. Outcomes vary.

What we did: Structured alt-doc application using BAS statements, matched to right specialist lender.

Illustrative example only. Individual outcomes vary based on loan amount, lender assessment, and personal financial circumstances.

📋 Illustrative Case Study

Add-Back Strategy — Business Owner, Newtown

In this scenario, a business owner with a low-looking tax return had depreciation and vehicle add-backs assessed by a specialist lender with flexible income assessment, which may increase assessed income. Add-back treatment varies by lender.

What we did: Applied depreciation and vehicle add-backs, matched to specialist lender with flexible income assessment.

Illustrative example only. Individual outcomes vary based on loan amount, lender assessment, and personal financial circumstances.

Add-Back Calculator

See How Add-Backs Unlock Your Borrowing Power

Your tax return shows low income — but specialist lenders assess it differently. Enter your actual figures below.

Your Income & Expenses

All figures are annual. Leave blank if not applicable.

Business Income (from tax returns)

Year 1 Net Profit / Taxable Income ? Enter your most recent year's net profit or taxable income from your tax return — before adding back expenses.

Year 2 Net Profit (optional — 2-year average) ? If you have two years of tax returns, enter year 2 here. Most lenders use the lower of the two years, or a 2-year average.

Partner / Spouse Income (if applicable) ? If your partner earns income and will be on the loan, enter their gross annual income here. It is added directly to the household assessed income.

Add-Backs

These are deductions lenders add back to increase your assessed income.

Depreciation ? Non-cash deduction for asset wear. Almost all specialist lenders add this back — it's not a real cash expense.

Interest & Finance Charges ? Business loan interest or finance lease charges deducted on the tax return. Added back by many specialist lenders.

Vehicle / Motor Expenses ? Personal-use component of vehicle expenses claimed as business deductions. Lenders often add back 50–100% depending on the claim method.

Home Office Expenses ? Home office deductions (occupancy or running costs). Added back when lenders see the property is your primary residence.

One-Off / Non-Recurring Expenses ? Legal fees, equipment write-offs, or other once-only costs that won't repeat. Lenders will add these back when documented.

Super Contributions (above SG) ? Voluntary superannuation contributions above the 11% Superannuation Guarantee rate. The excess is often added back.

Loan Details

Loan Term

Available Deposit (savings / equity) ? Your usable deposit after costs (stamp duty, legal fees etc.). Used to calculate the property value you can reach and your LVR.

Monthly Living Expenses (household) ? Estimated monthly household living costs — groceries, utilities, transport, insurance etc. Does not include existing debt repayments.

Existing Debt Repayments (monthly) ? Total monthly repayments on any existing loans — car loans, personal loans, credit cards (use 3% of limit), HECS. Enter 0 if none.

Estimated Borrowing Power

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Based on specialist lender assessment · APRA 3% buffer applied

Lender Type

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Est. Monthly Repayment

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Property You Could Buy

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Enter your deposit to see property value

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Base net profit —

Total add-backs —

Partner income —

Total assessed income —

Available monthly surplus —

Get a broker to verify your exact figure

Estimate only, using a 9.5% assessment rate and a simplified tax model. Your actual borrowing capacity may be higher or lower depending on lender policy and is not a guarantee of approval. Confirm with your chosen lender.

Wide lender panel · Banks + Specialists

Compare loan options from major banks and specialist lenders.

Explore All Our Lenders

Wide lender panel · Banks + Specialists Personalised Loan Options No Obligation Assessment

We work with a wide panel of lenders across Australia. We are not tied to any one lender and compare loan options to help find a solution that suits your needs. All applications are subject to lender approval and lending criteria.

Common Questions

Self-Employed Home Loan FAQ

Everything you need to know about getting a home loan when you're self-employed in Sydney.

Yes — with the right lender and documentation. After 12 months of trading, some specialist lenders may consider your application using 1 year of tax returns or BAS statements. In some cases, an accountant's letter confirming income can substitute. The key is knowing which lenders to approach and how to present your income correctly. Been knocked back already? Here's what to do →

A low documentation (low doc) home loan is designed for borrowers who cannot provide standard proof of income like payslips or tax returns. Instead, lenders accept alternative evidence such as BAS statements, business bank statements, or an accountant's declaration. Low doc loans typically carry a slightly higher interest rate than full doc loans and are primarily offered through specialist and non-conforming lenders. They are the most common pathway for ABN holders under 2 years.

Alt doc (alternative documentation) sits between full doc and low doc. It uses a combination of income evidence — usually BAS statements, business bank statements, and an accountant's letter together — rather than relying on tax returns alone. Alt doc is particularly useful when your most recent tax return understates your current income, or when you have 1–2 years of ABN history. It provides more flexibility than low doc while being less stringent than full doc requirements.

An add-back is a business expense that can be added back to your taxable income for loan assessment purposes. Many self-employed people legitimately reduce their taxable income through depreciation on equipment, vehicle expenses, home office deductions, and one-off business costs. Lenders that allow add-backs add these figures back to arrive at your actual earning capacity. For example, if your tax return shows $95,000 income but you have $45,000 in allowable add-backs, your assessed income becomes $140,000 — which can lift your borrowing capacity depending on the lender. Not all lenders allow add-backs; this is why choosing the right lender matters enormously.

Not necessarily. Maximum LVR for self-employed borrowers varies by lender, loan size, documentation type and profile, and some lenders may lend above 80% LVR with LMI. LMI waivers are offered by only some lenders, for certain professions and conditions, so confirm eligibility with your lender. A 20% deposit removes the need for LMI entirely, but it is not a requirement. Your broker will advise the most practical deposit structure for your situation and ABN age.

Contractors are assessed differently depending on their income structure. Day-rate contractors on long-term contracts (particularly IT and engineering) are often treated similarly to PAYG employees — especially if they can show a current contract with remaining term. Project-based contractors or those between contracts are typically assessed using 2 years' average income through the full doc pathway, or the low doc pathway using BAS statements. The key documents are: current contract, 2 years tax returns (if available), and business bank statements showing regular income deposits.

In many cases, yes. Investment property loans for self-employed borrowers follow the same process as owner-occupier loans. The key advantage is that rental income from the investment property is also factored into your borrowing capacity — which often makes it easier to qualify. Some specialist lenders consider investment lending for self-employed borrowers, and assessment varies by lender. Learn more about investment loans →

Yes — a bank decline is not the end. Many self-employed borrowers come to us after a bank decline. Automated assessment at some banks can flag self-employed applications early, while some specialist and non-bank lenders use manual assessment and may consider your income differently. Approval is never guaranteed and depends on each lender's assessment. The key is: do not apply to multiple lenders without guidance, as multiple credit enquiries can affect your credit file. Speak to us first and we can help identify which lenders to approach before you lodge an application. More on what to do after a bank knockback →

Self-Employed Guides

Low Doc Home Loans Sydney Under 2 Year ABN Home Loans Contractor Home Loans Casual & Contract Income Loans

Related Pages & Guides

📖 Self-Employed Home Loans 2026 ❌ Bank Knockbacks 📈 Investment Loans 🏠 First Home Buyers 🧮 Calculators 📚 Low Doc Guide

ⓘ General information only. Last reviewed 21 September 2026. Policies vary by lender and change frequently, and lender criteria such as ABN age, documentation and maximum LVR should be confirmed directly with your chosen lender before applying. Examples and calculator results are estimates, not a guarantee of approval, and all applications are subject to lender assessment. Seek professional advice for your circumstances.

Get Your Free Self-Employed Assessment

Tell us about your situation — a specialist broker will review your income structure and present your best loan options.

Ask Mortgagefy — Self-Employed Lending Questions

Real questions from Sydney business owners and contractors. Straight answers.

An add-back is a legitimate expense that specialist lenders add back to your taxable income when assessing your loan — things like depreciation, vehicle expenses, and home office deductions claimed through your business. This can significantly increase your assessed borrowing capacity compared to what your tax return alone suggests. Use our add-back calculator →

Yes — some specialist lenders accept 1 year of ABN history. You'll typically need strong BAS statements, a good credit history, and a clean explanation of your business. Rates may be slightly higher, and approval depends on the lender's assessment. We identify which lenders are most suitable for your specific situation. Speak to a broker →

Low doc loans use minimal documentation, often just a self-declaration of income. Alt doc loans use alternative evidence like BAS statements, business bank statements, or an accountant's letter — typically giving better rates and higher approval chances than pure low doc. Most specialist lenders prefer alt doc if available. Compare your options →

With some lenders, yes — they use your taxable income, so legitimate deductions reduce what they assess as your earnings. But specialist lenders use add-back methodology, adding back depreciation, vehicle costs, and other non-cash deductions to get a truer picture of your actual income and capacity. See how much you could borrow →

Yes, borrowing through a company or trust structure is possible. Lenders assess the income differently depending on your structure. We work with lenders experienced in company and trust borrowers to ensure your income is presented and assessed accurately. Speak to your accountant about the tax implications of your structure choice. Get a free assessment →

Each income stream is assessed individually based on the last 2 years' tax returns. The most favourable approach is typically averaging the two years, or using the lower year if income has fallen. We can help identify which lenders may give more credit for your specific income mix and how to present the application most effectively. Talk to our team →

Still have a question? Our mortgage assistant answers instantly — free, no obligation.

Ask Our Mortgage Assistant

Are you an accountant with self-employed clients?

We partner with accountants and tax agents across Sydney to help their self-employed clients get loan-ready. We understand add-backs, trust distributions, and company financials — and we'll keep you updated at every milestone. Simple referral process, zero admin on your end.

Become a Referral Partner

Get your free Sydney self-employed assessment

Talk to a Sydney broker who understands self-employed lending. Approval is subject to lender assessment.

Start Your Free Assessment Call 0432 634 648

Self-Employed Home Loans Sydney —Options When Banks Say No

Banks Were Built For Payslips.You Don't Have One.

No Payslips

Fluctuating Income

New ABN

Low Tax Returns

Who We Help

Sole Traders

Company Directors

Contractors

Tradies

Freelancers

Partnership Owners

Project-Based Income

New Business Owners

Full Doc vs Low Doc vs Alt Doc

Full Doc

Low Doc

Alt Doc

Your Tax Return May Understate Your Income.Add-Backs Can Help.

Worked Example: The Add-Back in Action

How Different Lenders Assess Self-Employed Income

Major & Regional Banks

Specialist & Non-Bank Lenders

Private & Niche Lenders

What You'll Need to Apply

Personal Documents

Business / Income Documents

Personal Documents

Income Evidence (choose one pathway)

Personal Documents

Alternative Income Evidence

Started Your Business Recently? You Still Have Options.

How It Works

Free Assessment

Document Strategy

Lender Match

Application & Settlement

Self-Employed Case Studies

See How Add-Backs Unlock Your Borrowing Power

Your Income & Expenses

Wide lender panel · Banks + Specialists

Self-Employed Home Loan FAQ

Self-Employed Guides

Related Pages & Guides

Get Your Free Self-Employed Assessment

Ask Mortgagefy — Self-Employed Lending Questions

Are you an accountant with self-employed clients?

Further Reading — Self-Employed Home Loan Guides

Unlock Your Self-Employed Assessment

Get your free Sydney self-employed assessment

Self-Employed Home Loans Sydney —
Options When Banks Say No

Banks Were Built For Payslips.
You Don't Have One.

Your Tax Return May Understate Your Income.
Add-Backs Can Help.