Home Loans

By Gian Ottavio, Lead Broker, Sydney

The start of a new financial year is a prime time to review your financial goals. If you’re self-employed and considering a self-employed home loan, a refinance, or debt consolidation, FY26 offers unique opportunities. With more lenders easing their requirements and accepting just one year of financials, many self-employed Australians previously sidelined are now eligible to borrow for a self-employed mortgage.

The biggest difference this financial year isn’t just about interest rate reductions – it’s about understanding how lenders assess self-employed income and how to strategically present your case for a business loan for self-employed individuals.

Understanding the Shift in Self-Employed Lending Policies

Traditionally, banks’ lending policies have required two full years of income tax returns and company financials to verify income for self-employed borrowers. This has often meant delays for those who had recently launched a business, taken time off during COVID, or experienced volatile income between years.

However, in FY26, there’s a significant trend: more banks, including major players like Macquarie, NAB, and second-tier lenders, are now accepting just one year of financials and income tax returns for a self-employed loan. This is provided it’s supported by:

• At least 12 months of ABN activity
• A strong industry profile and/or accountant support

This evolution in credit policy aligns with economic reality: nearly 1-in-5 working Australians are self-employed, and new ABNs are being registered at record rates. In 2024 alone, more than 150,000 new small businesses launched – many of them sole traders, tradies, creatives, and consultants now eligible to use their first trading year’s income for servicing purposes of their home loan.

Key Considerations for Self-Employed Borrowers in FY26 to Secure Your Mortgage

This shift in policy requires a strategic presentation of your income and business position. Here are four practical considerations for borrowers looking to secure approval this financial year for their self-employed home loan:

1. Timely Lodgement of FY25 Tax Returns – And Knowing When FY26 May Be Considered
Right now, lenders are looking to FY25 tax returns as the primary basis for income assessment. If your FY25 financial year was strong, lodging early puts you in a great position.

Some non-bank lenders—and even certain divisions within the big four – will consider FY26 performance instead if FY25 doesn’t reflect your business’s true earnings potential. This could include BAS statements, management accounts, or year-to-date financials, especially if supported by a letter from your accountant.

Pro tip: For high-growth businesses or newer ABNs, this can be a game-changer. Don’t assume you have to wait another year to borrow – contact Brooks & Partners today to assess which lenders will consider future-facing income for your low doc home loan or self-employed mortgage.

2. Business Viability: Go Beyond the Numbers for Your Self-Employed Loan
Profit isn’t everything; lenders are equally concerned with consistency and clarity. Whether you operate as a sole trader or run a company, you’ll need to show that your income is stable and your business is sustainable.

Many lenders now require:

• 12+ months ABN registration
• Clear turnover history via BAS or bank statements
• GST registration if revenue exceeds $75,000
• Separate business and personal expenses

Some non-bank lenders will even accept bank statement-based servicing or income verified via your accountant—especially if your FY25 tax return isn’t available yet but your trading position is strong, making a low doc home loan a possibility

3. Not All Lenders Are Created Equal: Choose the Right Fit for Your Self-Employed Mortgage
Each lender reads self-employed financials differently. Some will average two years, some will take the most recent year only (if it’s higher), and others allow low-doc or alt-doc options using BAS or accountant letters.

Here’s a snapshot:

• Macquarie: May average two years but will consider the latest year only if income has increased
• ANZ: Prefers two years but makes exceptions with strong FY25 and accounting support
• Pepper/Bluestone: Often accept one year’s tax return or even just 6–12 months of business bank statements

Pro Tip: At Brooks & Partners, our extensive list of over 30 lenders (bank and non-bank) allows us to take a tailored approach to all lending scenarios, including business loans for self-employed individuals and self-employed home loans. With over 40 years of collective experience across the residential, commercial, and equine spaces, we leverage our network of premium credit coaches to understand how to best present business cases for streamlined approvals.

4. Start Planning Your FY26 Financials Now for Future Borrowing
Even if you don’t plan to borrow until 2027, now is the time to clean up your books and manage your income flow. Key strategies include:

• Keeping business and personal accounts separate
• Tracking income through accounting software like Xero, MYOB
• Making regular super contributions (some lenders consider these part of personal income)
• Reducing business debt to improve your debt-to-income ratio

Forward-looking tip: If FY26 is shaping up to outperform FY25, talk to one of our brokers about lenders who accept interim financials later in the year. You may not have to wait for full tax lodgement to apply for your self-employed home loan.

Our In-House View: Partner & Broker Metro, Tony Ottavio

At Brooks & Partners, we’re seeing strong demand from self-employed clients—especially new business owners who’ve had a profitable 12 months and want to act now. We’re working with lenders who understand the real picture behind your numbers, and can structure applications based on recent business activity, not outdated tax returns.

The key is starting early, cleaning up your documentation, and aligning with lenders who truly understand your story. Taking a holistic view on lending, we always seek to work with your service providers (being accountants or lawyers) to ensure that financials are set up clearly from the start to make the lending process easier later on.

Wrapping Up: Your Self-Employed Loan Opportunity

Self-employed borrowers in FY26 are in a stronger position than ever—but the key is knowing how and when to apply. Whether you’re newly in business or have decades of trading behind you, your success in securing finance will come down to timing, documentation, and lender choice for your self-employed mortgage.
With interest rates expected to ease, competition among lenders is heating up—and that means more opportunity if you’re prepared.

If you’re self-employed and thinking about borrowing this year, we’d love to help you assess your numbers, understand your options, and build a strategy that works for your self-employed home loan needs. Contact Brooks & Partners today for a personalised consultation!

By Gian Ottavio, Lead Broker, Sydney

With a potential 0.25% rate cut on the horizon, many Australians are asking the same question: Is now the time for a fixed or variable rate home loan? Whether you are a first home buyer, looking to refinance, or an experienced investor, making the right choice could save you thousands.

This guide breaks down everything you need to know.

What is a Fixed Rate Home Loan?

A fixed rate home loan locks in your interest rate and repayments for a set term, typically between one and five years.

This option provides certainty and protects you from interest rate rises during the fixed period. For anyone on a tight budget or planning for significant life events, the stability of knowing your exact repayment amount is a major advantage.

Pros:

• Certainty and Stability: Your mortgage repayments will not change, even if the RBA increases the cash rate.
• Budgeting Confidence: Predictable repayments make it easier to manage your household budget.
• Competitive Rates: With banks like ANZ and NAB already cutting their fixed-rate products, some of the most competitive fixed rates in months are available now. ANZ’s 2-year fixed rate is currently as low as 5.19%.

Cons:

• Less Flexibility: If the official cash rate falls, you won’t benefit from lower interest rates.
• Break Fees: Exiting your fixed term early to sell your property or refinance can attract significant break fees.
• Limited Features: These loans often have fewer features, such as the ability to make unlimited extra repayments.

What is a Variable Rate Home Loan?

A variable rate home loan has an interest rate that can change over the life of the loan, moving with market conditions. This gives borrowers the chance to benefit from rate cuts but also exposes them to increases.

Pros:

• Potential to Save: If the RBA proceeds with its predicted rate cuts, you could see an immediate reduction in your repayments. All four major banks are now forecasting at least one rate cut in 2025.
• Greater Flexibility: Variable loans usually come with valuable features like offset accounts, redraw facilities, and the freedom to make unlimited extra repayments.
• No Break Fees: You can switch lenders or sell your property without incurring exit penalties.

Cons:

• Uncertainty: If inflation rises, your rate and repayments could increase, making it more difficult to budget.
• Risk of Higher Repayments: You are not protected from future rate hikes, which could increase your monthly financial commitments.

How the Market Looks Ahead of the July RBA Meeting

The current market is creating a unique opportunity for borrowers. Inflation dropped to 3.4% in May, prompting a shift in forecasts from the major banks. In response, lenders have already lowered their fixed-rate offerings, anticipating that the RBA will cut the official cash rate.

At the same time, national property values have hit a new peak, rising by 0.4% in June alone, according to CoreLogic. With both interest rates and property prices in motion, the timing of your home loan decision is critical.

Our View: What Should You Do?

There is no single answer that fits everyone. Each client’s circumstances are different — that’s why we always recommend a tailored approach, and in some cases, even split loans to balance risk and flexibility.

The right choice depends entirely on your financial situation and your tolerance for risk.

• For Stability and Peace of Mind: If you are a first-time buyer or need predictable repayments for budgeting, a fixed rate home loan offers valuable security.
• For Flexibility and Potential Savings: If you are comfortable with market fluctuations and want to take advantage of potential rate cuts, a variable rate home loan could be the smarter option. Investors and self-employed clients often prefer this agility.
• A Balanced Approach: A split loan, where part of your mortgage is fixed and the other is variable, can offer the perfect balance of security and flexibility.

Get Expert Home Loan Advice Today

Navigating the home loan market can be complex, especially when rates and property prices are changing. At Brooks & Partners, we provide tailored advice to help you find the perfect home loan for your unique circumstances.

Whether you’re ready to buy, looking to refinance, or simply want to review your options, our team is here to help. Contact us today for a free consultation and let us help you secure the right loan for your future.