A low doc (or low documentation) home loan is a type of home loan that can be approved without the normal income verification requirements.

What this usually means is that you sign an income declaration and provide reduced income evidence often in the form of BAS, business account statements or an accountant’s declaration.

Your bank will accept this as proof of your income without the need to see your tax returns and other financials.

Is this for self employed people?

Low doc loans are only for self employed borrowers.

If you’re self employed then you’ll know from experience that the banks see you as a higher risk and tend to be more conservative when assessing your loan application.

They’ll ask you for the last two years’ tax returns and assessments for yourself and your business, two years financial statements and in some cases BAS statements or interim accounts. As you can imagine the paperwork really begins to pile up!

On the other hand with a low doc loan, you state your income on a form, provide reduced income evidence in the form of BAS, business account statements or an accountant’s declaration and that is it!

Do you need a loan? Send us an online enquiry or call us at 1300 889 743 to speak to one of our expert mortgage brokers.

Why use a low doc loan?

The main reason to use a low doc loan is because you cannot prove your true income. For example:

  • You may not have up to date tax returns.
  • Your income may have increased since your last tax return.
  • You may have large deductions such as depreciation which are not a real expense.
  • Your company structure may be too complex.
  • You may have distributed income to family members from your trust.

Some other businesses such as restaurants, taxi services, tradesmen or retail outlets receive most of their income as cash which doesn’t show up in their tax returns. Obviously if they were to show their tax returns to the lender then they would be declined as their income would appear too low to service the debt.

Who can get a low doc loan?

When they were first introduced, low doc loans were only available from a select few lenders at very high interest rates, with restricted lending criteria. Modern day low doc loans are far more readily available.

Self employed borrowers are normally required to have a valid ABN that has been running for at least two years and is registered for GST. Some lenders will now accept ABNs that have been registered for just 1 day.

Some of our specialist lenders can consider lending more than 80% of the property value and can consider borrowers who have had defaults or other black marks on their credit file.

What is an Income Declaration Form?

An Income Declaration Form is a method for the banks to verify your income when applying for a low doc loan.

Typically, the form will ask you to state your name, your business’s name, your business’s ABN, the amount you are borrowing and the indicative repayments. At the bottom of the form is usually a declaration confirming that you believe that the income you are stating is true and that you can afford to make the loan repayments.

Every lender has their own Low Doc Declaration, so it may vary. Some lenders will also ask you to verify your assets and liabilities, while others have a no doc option that will allow you to not even declare an income or anything about your asset position.

How do I apply for a low doc loan?

Our brokers are specialists in low doc loans and can help you find the right lender for your loan application. Just send us an online enquiry or call us at 1300 889 743 to speak to one of our expert brokers.

  • Freddie

    I’m a self-employed electrician trying to get a home loan. I wanted to know whether low-doc loan rates are higher compared to full doc loans?

  • Hi Freddie,

    In most cases, as the lenders are providing you a loan without having to see your full financial statements and recent tax returns, they bear more risk and in turn charge a slightly higher interest rate compared to full doc loans. Having said that, the rates are still pretty competitive.

  • gothard

    What’s the easiest way to find out if I qualify for a low doc loan?

  • Hi gothard,
    You can simply use our low doc loan calculator to get an assessment of your situation and identify whether or not you are eligible for a low doc loan. We can then work out which lenders you qualify with, or which aspects of your situation may be of concern to a lender. Here’s the link to the calculator:

  • E Greene

    I’d just like to enquire on if banks can accept handwritten BAS or not?

  • Hey Greene,
    Unfortunately, the financial institutions do not accept handwritten Business Activity Statements (BAS). They will usually require Australian Tax Office (ATO) Portal printouts (an example is shown on the left), or a copy of electronically lodged BAS from your bookkeeper.

  • Edwards

    How do we qualify for the first home owners grant?

  • Hi Edwards,

    The first home owners grant (FHOG) is available to people buying or building their first home and can meet certain eligibility criteria such as being a natural person and not a company or trust. This is just one among a list of specific requirements that you can check out in detail on the FHOG grant guide page:

  • Jenna

    Do all lenders require BAS statements when applying for a low doc loan? I’m asking because I don’t think I can provide one.

  • Hey Jenna,
    Actually, there are some lenders that do not require BAS for a low doc loan. There are a range of income verification methods you can choose from, depending on which documents you can provide. Please refer to our low doc loans section for more information:

  • Kosten

    Hi, can I get a low doc loan based on my accountant’s letter as I don’t have my recent tax returns and BAS statements?

  • Hi Kosten,
    Some lenders will accept a low doc accountant’s letter in place of BAS statements. 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.
    Please enquire online https://www.homeloanexperts.com.au/free-quote/ or call us on 1300 889 743 to find out which lenders provide low doc loans with an accountant’s declaration.

  • Zhida Albertinho Jiang

    I’d like to know how applying for a ‘Low Doc Loan’ could lead the mortgage broker to be accused under NCCP of recommending an ‘unsuitable’ product.

  • Hi Zhilda,
    It’s because under the National Consumer Credit Protection Act (NCCP) Act; lenders require mortgage brokers to have some kind of income verification from the clients before they can approve the mortgage. So, if a broker suggests you a low doc loan at the first place, s/he may not have duly checked for your income and thus may be accused of recommending an ‘unsuitable’ product.

  • Levine

    Hi, I’m on the market for a 90% waived LMI investment mortgage but my bank requires 2 year’s self-employed history. I was made partner at my law firm last year, as such I’ve only been self-employed for one year and can provide my tax assessment. Do you have lender who can help in this situation?

  • Hi Levine,
    Yes, there are a few lenders who are flexible with their income verification. They can accept 1 years’ self-employed tax returns for a 90% waived LMI investment loan for lawyers, solicitors and select legal professionals. You may even be eligible to receive interest rate discounts on both your investment and owner-occupied home loans.