Averaging
For casual and variable income, lenders usually take your year-to-date income and annualise it, or average your last one to two years from payslips and tax records. A short history or a big recent jump may mean the lender uses the lower of the two figures.
Shading
| Income type | Commonly counted | History usually wanted |
|---|---|---|
| Regular overtime | All or part, depending on lender and industry | 6 to 12 months |
| Commission | Often averaged, sometimes shaded | 12 to 24 months |
| Annual bonus | Often averaged over two years, or partly counted | 2 years |
| Casual wages | Averaged | 3 to 12 months |
| Gig platform income | Net, averaged | 6 to 12 months |
| Self-employed | Net taxable income with add-backs, or alt doc figures | 1 to 2 years, or 6 to 12 months ABN for alt doc |
Policies differ widely, which is why the same person can get very different borrowing power from different lenders.
Making your income count
- Keep all income going into one account so statements tell a clear story.
- Hold onto payslips with year-to-date figures and your payment summaries.
- Lodge BAS and tax returns on time if you're on an ABN.
- Download annual summaries from every gig platform.
- Explain any gaps, such as parental leave or a short illness.
Related pages: casual and contractor home loans, Uber and gig worker home loans and self-employed home loans.
Living expenses: the other half of the equation
Borrowing power isn't just about income. Lenders also estimate your living expenses, using what you declare and a benchmark, whichever is higher. With irregular income, a lender may apply a bigger buffer. Keeping your declared expenses realistic and consistent with your bank statements avoids surprises.
A worked example
A real estate agent earns a modest base salary plus commission. Over the last two years commission has made up more than half her income, but one year was much stronger than the other. One lender averages both years and counts 80% of the commission; another uses the lower year only. The difference in borrowing power is significant, which is why matching lender to income type matters.
When a specialist lender helps
If your irregular income comes with other complications, such as a short history, an ABN under 12 months or a credit blemish, a specialist lender may be more flexible. See the non-conforming home loans hub.
What you’ll need
- Payslips with year-to-date income
- Payment summaries or tax returns
- BAS
- Platform summaries
- Bank statements
Who it usually suits
- Casuals, contractors, gig workers and the self-employed
