How to Get a Mortgage When You’re a Sole Trader or Contractor
This is where a lot of capable borrowers feel unfairly judged.
You earn good money, work consistently, and run a solid business. Then the bank looks at your application and suddenly things slow right down.
We see this every week.
Why Banks Treat Sole Traders Differently
Banks don’t dislike self-employed borrowers. They’re just cautious.
Business income can fluctuate, so lenders want confidence that what you earn today will still be there tomorrow. That’s why sole traders and contractors are assessed differently to PAYG employees.
What Lenders Usually Want to See
In most cases, lenders look for:
- one to two years of tax returns and notices of assessment
- evidence income is stable or growing
- business bank statements to support the story
Some lenders will consider one year. Policy choice matters a lot here.
This is where banks say no quickly, but brokers can still say yes by choosing the right lender.
Contractors vs Sole Traders
Contractors are often assessed differently again.
If you’re working under contract, some lenders will annualise your contract income rather than relying purely on taxable profit. A strong work history and consistent renewals can make a big difference.
This is one of those behind-the-scenes details most borrowers never get told.
Common Mistakes That Hurt Applications
We see good applications fall over because of small but avoidable issues, like:
- mixing personal and business expenses
- inconsistent tax lodgements
- minimising tax without understanding borrowing impact
This is usually the moment people call us after their accountant has done a great tax job, but the bank has reacted badly.
Why Structure Matters Even More
For sole traders, loan structure is critical.
Offset accounts, buffers, and flexible repayment options matter when income isn’t perfectly regular. Locking into the wrong structure early can make refinancing much harder later.
This is where self-employed lending overlaps with long-term strategy, not just getting approved.
The Broker Difference for Sole Traders
A broker understands which lenders genuinely understand self-employed income and which ones don’t.
We know how to present your income properly, when to push, and when waiting makes sense. That’s often the difference between frustration and approval.