Last Updated: 28th December, 2023

Are you a subcontractor looking for a home loan?

Banks tend to take a pretty conservative view about the subcontractors’ employment prospects and the nature of their income.

Find out how you can get approved with a lender that actually takes a common-sense approach when it comes to subcontractor home loans.

How much can I borrow?

If you can meet standard bank lending criteria and provide evidence of your income, subcontractors may be able to borrow up to:

  • 80% of the property value with a low doc loan: That’s if you can’t provide the necessary documents to take out a full doc loan. Keep in mind, you may have to pay a slightly higher interest rate in most cases.
  • 90% of the property value: Depending on the type of employment contract you have with your employer, you can borrow up to 90% plus LMI (lenders mortgage insurance) with a standard bank loan. LMI is a one-off fee charged by the lender when borrowing over 80% of the property value.
  • 95% of the property value: Subcontractors will only be allowed to take out 95% of the property value with evidence of a strong financial position and a job history of at least 6 to 12 months in your current position.
  • 100% of the property value: With a guarantor home loan, you can borrow the entire value of the property plus additional costs like stamp duty.
  • 95% of the property value: In exceptional cases, we can accept a short term ABN up to 95% where the applicant has previous experience in a similar PAYG role, and we can prove your income. Self-employed contractors with 2 years of Tax Return, 2 years of ABN, and who’ve been in the same industry for 3 years or more can borrow more (stricter lending criteria applies).

Fill in our free assessment form or call 1300 889 743 and talk with one of our credit specialists and find out how much you can borrow with a subcontractor home loan.

What if I’m a PAYG subcontractor?

Pay As You Go (PAYG) subcontractors have tax withheld and superannuation, sick leave and holiday leave entitlements. You’ll be seen as a PAYG subcontractor if:

  • You work for a single employer.
  • Your taxes are withheld, and you’re paid superannuation.
  • You charge your labour at an hourly or daily rate.

If you qualify as a PAYG subcontractor, you may find taking out a home loan a bit easier because you’ll only have to provide an employment letter and your two most recent payslips.

What if I’m a self employed subcontractor?

Most lenders require self employed borrowers to be in their current role for a minimum of two years. You’ll be seen as a self employed subcontractor if:

  • You don’t provide materials, only your labour.
  • You work for a single company only.
  • You charge your labour at an hourly or daily rate.
  • You pay your own taxes and superannuation.

In this case, you can provide some invoices and bank statements as evidence of your income.

Lenders may also ask you for two years’ tax returns to prove your income.

Can’t provide two years’ tax returns?

A low doc loan may be more suitable if you can’t provide your tax returns. Please complete our free assessment form or call us on 1300 889 743 to speak with one of our subcontractor home loan specialists before proceeding with this option.

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Can I get a home loan if I have bad credit?

Most lenders turn away subcontractor home loan applicants with a bad credit history.

However, not all will make such a hasty decision. If you can meet certain requirements, specialist or non-bank lenders will consider:

These lenders take a much more-common sense approach, weighing up your strength as a borrower carefully rather than relying entirely on an automated pre-approval system.

Get in touch with one of our bad credit specialists by filling in our free assessment form or by calling 1300 889 743 and discuss your options today!

What if I can’t provide tax returns for the last two years?

You can still take out a home loan as long as you can provide any of the following as alternative evidence:

  • An employment letter to prove your current income and future employment stability if you’re PAYG.
  • Tax invoices from the last 3 months.
  • Bank statements from the last 3 months showing regular salary credits.

What if I’ve just changed jobs?

Even if you’ve recently changed jobs, you can still take out a home loan if you have at least two years of experience in the same line of work. Additionally, you may need to have a consistent work record to get approved.

Some lenders can approve your home loan even if you’re still in your first week of work!

Are there any discounts offered?

Basic loan discounts as well as professional package discounts are available. You may also qualify for a significant interest rate discount below the bank standard variable rate.

Call us on 1300 889 743 or complete our free assessment form to speak with one of our expert mortgage brokers who know the policies of more than 40 lenders on our panel.

Why do banks have a problem with subcontractors?

Most lenders consider subcontractors as casual workers because they don’t think subcontractors have stable employment largely because their contracts can be cancelled anytime.

As a result, banks tend to be quite conservative towards subcontractors and limit their borrowing power.

Apply for a subcontractor home loan today!

If your subcontractor home loan application is submitted to the right bank, there’s a high probability of getting approval.

All loan types and features are available!

All home loan types are available, including basic home loans, professional packages, fixed rate home loans and more. You’ll also have access to all standard full doc home loan features such as interest-only, line of credit, 100% offset, redraw and extra repayments.

Interest rates are very similar to a standard home loan as well!

We’re credit specialists who can help you take out a subcontractor home loan to buy a home or get a better interest rate by refinancing.

Call us today on 1300 889 743 or complete our free assessment form to discover what fantastic subcontractor home loan packages may be available to you.