What is a Low Doc Home Loan?

Who Are Low Doc Home Loans For?

Low-doc home loans are designed for individuals who struggle to provide the traditional documentation required by most lenders. These loans are beneficial for self-employed Australians, business owners, and those with fluctuating or non-traditional income sources. Here are some examples of who typically benefits from low doc loans:

1. Self-Employed Without Recent Tax Returns

If you're self-employed, you may not have the traditional payslips or tax returns that lenders usually require. This can be particularly challenging if you're just starting your business or if your income is irregular. With a low-doc loan, you don't need the complete documentation typically required. Instead, you can use alternative documents like BAS statements, bank statements, and a letter from your accountant to prove your income.

Read also: Self-Employed Home Loans: How to Qualify, Apply, and Get Approved

2. ABN and GST Registered Business Owners

For business owners, having an ABN (Australian Business Number) and being GST-registered for a minimum period are typically key eligibility requirements. Low-doc loans allow business owners to use their BAS and bank statements as proof of income, making it easier to secure a mortgage without providing the usual tax returns. This flexibility helps ensure that business owners can still access home financing, even if their financial documents aren't as straightforward as those of traditional employees.

3. Freelancers, Contractors, and Consultants

If you work as a freelancer, contractor, or consultant, you may not receive consistent payroll documentation from a single employer, making it harder to prove your income through payslips. Low doc loans can help you overcome this challenge by accepting alternative proof of income, such as bank deposits and business statements. Contractors and freelancers can often use their contract income or client invoices to demonstrate their ability to repay the loan.

Low-doc loans provide a much-needed solution for these borrowers, enabling them to own a home despite the complexities of non-traditional income.

What Are the Eligibility Criteria for Low Doc Loans?

While low doc home loans offer flexibility compared to traditional loans, there are still certain eligibility criteria that you must meet. Understanding these requirements can streamline the application process and provide a clearer picture of what to expect. Here's what you typically need to qualify for a low doc loan in Australia:

1. Minimum ABN and GST Registration Length

Most lenders require that borrowers have been ABN registered for at least 12 months, while some specialist lenders may accept as little as 6 months of trading history if supported by strong bank statements or BAS records. According to Canstar (2025), over 80% of low doc lenders require both an active ABN and GST registration to ensure consistent business activity. This ensures that your business is established and generating income. Lenders want to verify that your business is operating consistently and that your income can be substantiated through alternative documents, such as Business Activity Statements (BAS).

2. Accepted Alternative Documents

For low doc loans, traditional documents such as payslips and tax returns are not required. Instead, lenders will typically accept other forms of proof to assess your financial stability. These may include:

• Bank Statements: Lenders will review your recent business and personal bank statements to verify cash flow and income.
• Business Activity Statements (BAS): These are among the most widely accepted documents for business owners. Your BAS can show your business's income and expenses.
• Accountant's Letter: If your accountant can confirm your income, this can be a vital document in your low doc loan application. This letter acts as a verification of your financial position, especially if your tax returns don't reflect your full income.

3. Minimum Deposit or Loan-to-Value Ratio (LVR)

To secure a low doc home loan, lenders generally require a minimum deposit of 20%. This means that you may be able to borrow up to 80% of the property value, resulting in an LVR of 80%. However, some lenders may offer slightly higher LVRs (up to 85%) if your application is strong and your financial situation supports it. This lower deposit requirement makes low-doc loans a viable option for borrowers who may have substantial equity in their business or assets but limited conventional income documentation.

It's important to note that your credit score, the stability of your business, and the documents you provide all play a role in determining the terms and interest rates you'll receive.

How Do Low Doc Loan Rates Compare in Australia?

One of the key factors to consider when applying for a low doc home loan is the interest rate. On average, low doc home loan interest rates are 0.75% to 1.5% higher than standard full-doc loans, depending on the lender and your Loan-to-Value Ratio (LVR). For example, if a standard owner-occupier loan sits around 6.20% p.a., a comparable low doc loan might range between 7.0% and 7.7% p.a. (Mozo, 2025). This difference reflects the additional risk lenders assume when verifying income through alternative documentation.

To better understand how low doc loan rates compare to other types of home loans in Australia, here's a simple breakdown of the average interest rates offered by lenders.

As shown above, low doc loans typically carry slightly higher rates than standard home loans due to reduced documentation requirements.

Factors That Affect Your Rate

Several factors will influence the interest rate you are offered for your low doc home loan:

• Loan Amount: The larger the loan, the greater the risk to lenders, which can result in a higher rate.
• Deposit Size: If you can contribute a larger deposit (e.g., 30% or more), you may be able to negotiate a better interest rate since the lender is taking on less risk.
• LVR (Loan-to-Value Ratio): The lower your LVR (the difference between the loan and the property's value), the more attractive you are to lenders, and the better your chances of securing a lower interest rate.
• Credit Score: Your credit history plays a crucial role in determining your rate. A strong credit score can help offset the higher risk associated with a low doc loan.

For example, if you're able to provide strong supporting documents, such as bank statements, BAS, and an accountant's declaration, you may be able to secure a more competitive rate, even with the higher-risk nature of low doc loans.

At Stryve Finance, we help self-employed borrowers shop around for the best low doc loan rates by working with over 50 different lenders. We will find the best option tailored to your financial situation, ensuring you get a competitive interest rate and favourable loan terms.

Pros and Cons of Low Doc Loans

Before you apply for a low doc home loan, it's important to weigh both the benefits and the potential downsides. While these loans offer much-needed flexibility for self-employed Australians, business owners, and others who can't provide traditional income documentation, there are some trade-offs to consider. Here's a breakdown of the pros and cons of low doc loans:

We're here to help you navigate this process. Our team of experts works with multiple lenders to find the best low doc loan options for your specific needs, ensuring that you get a solution that works for you.

What Documents Are Required for a Low Doc Loan Application?

One of the main benefits of low doc home loans is that they require far fewer documents than traditional home loans. However, while you don't need the usual payslips, tax returns, or employment contracts, there are still several important documents that lenders typically require to process your application. The chart below shows how lenders typically value each type of documentation when assessing eligibility.

As shown above, bank statements and BAS statements usually play the biggest role, while your accountant's declaration and ABN/GST registration further strengthen your application and increase your chances of approval.

Below are the key documents you'll need to provide for a low doc loan application:

1. Accountant-Declared Income

Since self-employed borrowers often don't have the traditional income proof required by standard lenders, many low doc lenders will accept an accountant's letter to verify your income. Your certified accountant writes this letter and outlines your business earnings and capacity to repay the loan. It serves as an alternative to traditional tax returns and payslips, making it a key document in the low doc loan application process.

2. Business Activity Statements (BAS)

For business owners, BAS are one of the most commonly accepted forms of proof of income. These statements are typically filed quarterly or monthly with the Australian Taxation Office (ATO), and they detail your business's income, expenses, and GST obligations. Lenders use BAS to assess the financial health of your business and to confirm that your income is sufficient to cover your loan repayments. Lenders generally request at least 6 months of BAS, though some may require up to 12 months depending on your business type. This helps verify consistent cash flow, especially given that small business income can fluctuate by up to 25% quarter-to-quarter (ATO Small Business Insights, 2024).

3. Bank Statements

Your bank statements (usually for 3-6 months) will be another important part of your low doc loan application. Lenders will look at these statements to evaluate your cash flow and spending habits, as well as to verify the deposit amounts coming into your account. Bank statements provide a clear picture of how you manage your business and personal finances, and they help lenders determine whether you can handle loan repayments.

4. ABN & GST Documentation

To qualify for a low doc loan, many lenders will require that you have a registered ABN (Australian Business Number) and GST registration for at least 6-12 months. These documents prove that your business is operating legally and that you have been in business long enough to show consistent income. Providing your ABN and GST registration gives lenders the confidence that your business is legitimate and established.

By providing these documents, you demonstrate to the lender that you have the financial capability to manage a mortgage, even if you don't have traditional documentation like payslips or tax returns.

Case Study

Here are some real-life success stories that show how we've helped our clients overcome challenges and secure the right mortgage solution for them:

Case Study 1: ABN Holder with Limited Documentation

John, a self-employed tradie, had recently started his own business and was having difficulty securing a home loan. He didn't have the required tax returns or payslips as proof of income, preventing him from applying for a standard home loan. However, after meeting with a Stryve Finance mortgage broker, we helped him compile BAS statements and bank statements to demonstrate his income. Additionally, his accountant provided a declaration letter, which helped us secure a low doc loan for him at a competitive rate. John purchased his first home just a few months later, despite the challenges of being a new business owner.

Case Study 2: Freelancer with Irregular Income

Sarah, a freelancer in the creative industry, was struggling to find a loan option due to her fluctuating income. She didn't receive regular pay slips, and her income varied depending on the projects she took on. After contacting Stryve Finance, we worked with Sarah to provide her bank statements and a letter from her accountant verifying her annual income. With a low doc loan approval, Sarah secured financing for her dream home without providing traditional documentation. This flexibility was crucial for her, and she was thrilled to move into her new home.

These are just a few examples of how Stryve Finance has helped self-employed individuals, contractors, and business owners successfully navigate the low doc loan process. Our goal is to work with you to understand your unique financial situation and identify the best loan solution.

Low Doc Loan FAQs

Before you apply for a low doc home loan, it's helpful to have a clear understanding of common questions and concerns. Below are some frequently asked questions about low doc loans in Australia, along with answers to help guide you through the process.

Can I get a low doc home loan with bad credit?

Yes, it's possible to qualify for a low-doc home loan with bad credit, but options may be more limited, and you may face higher interest rates. Some low doc lenders place less emphasis on your credit score, focusing instead on factors such as your business income and an accountant's declaration.

What's the minimum deposit required?

For most low doc loans, the minimum deposit is 20%, which means you'll need a loan-to-value (LVR) of around 80%. However, some lenders may allow an LVR of up to 85% in certain circumstances, especially if your financial situation and supporting documents are strong. Keep in mind that a larger deposit may improve your chances of approval and help you secure a better interest rate.

Can I refinance a low doc loan later?

Yes, it is possible to refinance a low doc loan once your business is more established or your financial situation improves. In fact, many self-employed borrowers refinance their low-doc loans to secure a better interest rate once they've provided more traditional documentation, such as tax returns or payslips.

Are low doc loans safe or legal in Australia?

Yes, low doc loans are both safe and legal in Australia. These loans comply with Australian lending laws and regulations, such as the National Consumer Credit Protection Act (NCCP). Low doc loans are designed to meet the needs of self-employed individuals and others who may face difficulties meeting traditional lending criteria.

Why Choose Stryve Finance as Your Mortgage Broker?

At Stryve Finance, we specialise in helping self-employed Australians, business owners, and contractors secure low doc home loans. Here's why you should choose us:

• 1. Access to 50+ Lenders: We connect you with a wide range of low doc lenders, ensuring competitive rates and flexible options tailored to your needs.
• 2. Expertise in Self-Employed Borrowing: We understand the challenges self-employed borrowers face and know how to help you secure the best low doc loan.
• 3. Personalised Service: We take the time to understand your unique situation and provide step-by-step guidance throughout the process.
• 4. Fast and Easy Approval: We work quickly to ensure a smooth and fast loan approval process, so you don't miss out on your property goals.
• 5. No Hidden Fees: We're transparent about costs, ensuring no surprises. You'll always know exactly what to expect.

Ready to secure a low doc loan? Book a free consultation with a Stryve Finance broker today and take the first step toward homeownership!