As an alternative to Business Activity Statements (BAS), some lenders will accept a low doc accountant’s letter instead.

This letter acts as a guarantee of the accountant’s knowledge of your circumstances at the specified date.

Please note that the declaration is only valid for 60 days from the date mentioned.

What details are required?

The following details are normally required on the accountant’s letter:

  • The declaration must be signed by a fully qualified accountant who can confirm that your annual net income is true and correct.
  • Must be on the accountant’s letterhead. If it is a low doc declaration, the banks have specific forms for the accountant to complete instead of a letter.
  • Must show the accountant’s full details including ABN, address and phone number.
  • Letter must be signed and dated.
  • The accountant should specify how long he/she has acted on behalf of the borrower.
  • The accountant should also mention that the current financials are not available, but based on their knowledge of the client’s current circumstances, the figure is not an unreasonable estimation of their annual gross income.
  • The taxable income the borrower is earning.
  • A disclaimer to protect the accountant.

Please enquire online or call us on 1300 889 743 to find out which lenders have the lowest interest rates for low doc loans with an accountant’s declaration.

What if my accountant will not sign the letter?

In some cases, your accountant may not be comfortable signing a letter to verify your income.

Firstly, if you don’t actually earn the income that you are declaring then of course it is unlikely that any professional accountant would help you. If you are overstating your income then maybe you should consider borrowing a lower amount that is within your budget, rather then trying to convince your accountant to sign a letter to prove your income.

However, if you do earn a good income, then there are some options which may make your accountant more comfortable with confirming your declared income.

  • Choose a different lender: Some of our lenders have better letter formats than others, which accountants are more comfortable with.
  • Declare a lower income: Do you really need that high an income to get approved for your loan?
  • Include a disclaimer: Some lenders allow a disclaimer to be included in their standard letter format. Please call us for disclaimer templates.
  • Provide your BAS: Can you provide your BAS as evidence of your income? Then you will not need an accountant’s letter.
  • Alternative income verification: There are a variety of ways that you can prove your self employed income that may be acceptable to one of our banks.

Please enquire online or call us on 1300 889 743 to find out which banks have more lenient wording for their accountant’s letters.

Are the interest rates competitive?

There are not many lenders that accept an accountant’s letter or declaration as evidence of your income. Consequently there is less competition and the interest rates can be slightly higher.

We find that for customers who are borrowing up to 60% of the property value there is no major different in interest rates. For customers borrowing 60% to 80% of the property value, there can be a small difference in rate depending on the customer’s situation.

Sample of an accountant’s letter

To whom it may concern,

I am aware that [insert client name here] has applied for a loan of $300,000, through Bank ABC. Repayment includes monthly instalments of $1,750.00 over 30 years at a variable interest rate of 7.00%.

Having knowledge of the borrower’s income and expenditure, I deem [insert client name here] capable of affording the loan amount and believe that they are in a strong financial position to make prompt repayments.

There are no significant factors, to the best of my knowledge that would hamper their ability to do so.

I confirm that the [insert client name here] is an Australian tax payer and is registered with the Australian Taxation Office (ATO). Further, I certify that I have submitted their recent tax return for ATO assessment.

Date: 01/01/2018
Signed: John A Smith, John Smith Accounting Pty Ltd
CPA: 1234

Note: Many lenders have their own templates. The above sample is an example of what might be required. Some lenders require the accountant to state the income that you have declared and confirm that it is true and correct.

Things to consider before applying

Is your accountant accepted?

Some lenders have a blacklist of known unreliable accountants. In addition, some self employed people use tax agents only so do not have an accountant. Ideally your accountant should be CPA accredited. Some lenders will also require you to have been with your accountant for at least one year.

Is your loan within guidelines?

Lenders are taking on a greater risk by accepting an accountant’s declaration as opposed to accepting Business Activity Statements (BAS) or Business Trading Statements (BTS), which show your total turnover. Therefore the lending guidelines are stricter than the lending guidelines for standard low doc loans.

Usually, the maximum acceptable Loan to Value Ratio (LVR), acceptable security and cash-out amount are more restrictive for these types of home loan applications.

Are you GST registered?

If you are declaring an income of more than or very close to $75,000, the lenders and the ATO will require you to be registered for GST.

If you have a high turnover and are not registered for GST than the lenders will be forced to decline your application because your declared income to the bank is inconsistent with your declared turnover to the ATO.

Find out how we can help you!

Enquire online or call us on 1300 889 743 to find the right lender for your low doc loan! We can help you choose a competitive loan from our panel of specialist low doc lenders.

  • WinstonC

    Since we work directly with the tax agents, we don’t have an accountant of our own. In such circumstance, can we ask some independent accountant to sign the accountant’s letter?

  • Hi WinstonC,

    Yes you can use an external independent accountant who sign off the accountant’s letter.

  • Beau T.

    I own a 1800m2 land that’s worth $350,000 and I have a $190,000 mortgage on the land. I want to build a home and construction costs will be $340,000 so I need less than 80% of the overall cost in a low doc mortgage. Can you guys help?

  • Hi Beau, the land size is fine and while not every lender does a low doc loan for construction, there are a few options available. We should be okay to help so please give us a call on 1300 889 743 and we’ll complete a full assessment.

  • herbert

    Can my agent help me prove rental income?

  • Hi herbert.
    Yes, a letter from an agent can be used to confirm market rent is ideal if the property is not yet tenanted and it’s also quite simple for the bank.

  • Greene

    How much of the rental income do lenders generally accept on a home loan application?

  • Hi Greene,
    Most lenders only take 80% of your wrap income into account and ignore that your tenant is paying for council rate and other outgoings. As a result your investing grinds to a halt. Some lenders aren’t as conservative with investors earning wrap and rent to buy income.

  • G Adams

    Can you please list out some of the current interest rates on low doc loans right now?

  • Hey G Adams,

    You can check out the current low doc interest rates in the market on our interest rates page. It also has additional information that you may find useful. Here’s the link to the page:

  • Stokes

    I’m asking my accountant to prepare a letter for me to verify my income. What details should I be looking at so as not to miss in the letter?

  • Hi Stokes,
    Among many other things, the letter must be on the accountant’s letterhead. It should also be signed and dated. and show the accountant’s full details including ABN, address, and phone number. You should check for more requirements on the above page as well.

  • Camille

    My accountant has explicitly stated that he won’t sign a declaration but is okay with an accountant’s letter. I fail to see the difference. What’s the difference between an accountant’s letter and an accountant’s declaration?

  • Hi Camille,
    An accountant’s letter is on the accountant’s letterhead and is signed and dated by the accountant and may have a disclaimer. Whereas, an accountant’s declaration is the lender’s own form and has figures that needs to be completed by the accountant. Each lender has its own requirements and its own format. Some require a declared income from the accountant whereas others just need confirmation that you can afford the loan. Some lenders will not allow a disclaimer to be added by the accountant. Which option is most suitable for you will usually depend on what your accountant is willing to sign.