What is a low doc home loan?
Lenders need to be satisfied you can afford a loan. For an employee that's simple: two payslips and a bank statement. For a business owner, the standard answer is two years of personal and business tax returns plus notices of assessment, which is fine until your accountant is behind, your last year was a rebuild year, or you simply earn far more now than the returns show.
A low doc home loan swaps those returns for documents that show your income today. It's still a fully assessed loan under responsible lending law; the evidence is just different.
What documents do you need for a low doc loan?
Each lender has its own menu, and most accept one of these income options:
| Option | What you provide | Suits |
|---|---|---|
| BAS statements | Usually the last 12 months of business activity statements | GST-registered businesses with regular lodgements |
| Business bank statements | 6 to 12 months of statements showing money coming in | Businesses with clear, consistent deposits |
| Accountant's declaration | A letter from your accountant confirming your income | Owners whose accountant knows the business well |
| Self-declaration plus support | A signed income declaration backed by one of the above | Used by some lenders alongside other evidence |
You'll also need the usual basics: ID, an ABN and GST registration history, details of your debts and, if refinancing, your current loan statements. See our guide on the accountant's letter for a low doc loan for what it should say.
Who qualifies for a low doc home loan?
- ABN history: most lenders want your ABN active for at least 12 months, and some go as low as six. GST registration for a similar period helps.
- Deposit or equity: low doc loans usually need a bigger buffer than a standard loan. The more equity you have, the more lenders will look at you.
- Credit history: low doc lending works best with clean or near-clean credit. If you also have defaults or arrears, a specialist lender can combine the two, at a higher cost.
- Affordability: your declared income has to cover the repayments with room to spare after your living costs and other debts.
Only had your ABN a few months, or just switched from a wage to contracting in the same line of work? Read self-employed home loans, because some lenders treat that differently.
Low doc refinance: moving to a better loan
Many business owners refinance to a low doc loan to get off something worse: a private loan taken out in a hurry, a second mortgage, or a pile of business debts at business-loan rates. Others use it to clear an ATO debt so it stops growing.
Refinancing to low doc can also be a step down the ladder. Once your tax returns are up to date and show the income, you may be able to move again to a full doc loan at a lower cost.
Are low doc home loans more expensive?
Usually a little, because the lender takes on more risk with less paperwork. How much more depends on the lender, your deposit, your credit history and which income evidence you use. Fees can also be higher, and lenders mortgage insurance may apply at higher loan-to-value ratios.
How to apply
- 1
Tell us about your business
What you do, how long you've had the ABN, roughly what you earn and what you need the loan for.
- 2
We check your options
Our specialist home loan team works out which lenders suit your documents and deposit.
- 3
Gather the documents
We tell you exactly which documents that lender needs, so nothing is wasted.
- 4
Apply once, to the right lender
One well-prepared application beats several rushed ones that each leave a mark on your credit file.
A worked example
A graphic designer has run her own business for three years, but her accountant is a year behind, so her latest lodged return shows a much lower income than she earns now. She has 25% equity in her home and wants to consolidate a business loan into her mortgage.
Using 12 months of BAS and matching business bank statements, a low doc lender assesses her current income and approves the refinance, rolling the business loan in at home loan rates.
What you’ll need
- Photo ID
- ABN and GST registration details
- 12 months of BAS, or 6 to 12 months of business bank statements
- Accountant's contact details (for a declaration, if needed)
- Personal bank statements
- Current home loan statements if refinancing
- Details of other debts
Who it usually suits
- Self-employed or a company director
- ABN active for 12 months or more (some lenders accept less)
- A deposit or equity in the property
- Income that supports the repayments
- Clean or explainable credit history
