Refinancing

Can self-employed borrowers refinance a home loan?

Self-employed borrowers can refinance, but current income evidence and lender policy drive the result.

Short answer

Yes. Self-employed borrowers can refinance when their income, expenses, liabilities, credit history and property meet lender requirements. The main difference is income verification. A lender may request one or two years of tax returns and financial statements, or accept an eligible alternative-documentation pathway when standard records do not reflect current trading.

Prepare the business and personal position

Gather personal and business tax returns, notices of assessment, financial statements, current liabilities and recent business statements. Explain ownership, related entities, trusts, business debts and any large movement in revenue or profit. The lender needs a complete group picture, not only the applicant's payslip.

Check which financial year each lender can use.
Reconcile salary, dividends and business profit.
Identify valid add-backs without overstating them.
Keep tax liabilities and payment plans current.

A lower rate still requires serviceability

Even when the new repayment would be lower, refinancing is a fresh application. The lender assesses the proposed and existing debts under current rules and uses its own treatment of self-employed income. Equity alone does not replace the repayment test.

One year, two years or an average

Some lenders use the latest financial year when the business has sufficient history and the result is representative. Others average two years or use the lower amount when income varies. A sharp increase may require interim accounts, BAS or statements to show it is continuing. A fall needs an explanation and may cause the lower figure to be used. Selecting the lender before understanding this calculation can create an avoidable decline or smaller approval.

Alt-doc is a separate pathway

Where current lodged returns are unavailable or outdated, some lenders accept alternative evidence such as BAS, business bank statements or an accountant's declaration. Alt-doc does not mean income is unverified. It can involve higher pricing, lower LVR limits or different fees. Compare the cost with waiting for full financials. The business should be established, the evidence consistent and the stated income realistic after normal operating expenses.

Plan around tax and business timing

Do not change salary, dividends or business spending solely to make an application look stronger without tax and accounting advice. A lender can look through the structure and may still request company or trust financials. Apply when the evidence clearly represents sustainable trading, not during an unexplained temporary spike. If refinancing includes cash out for the business, separate the new funds and document the purpose so household and business borrowing remain easy to understand.

Questions to ask before you proceed

What is the net saving after every discharge, application, valuation and ongoing fee?
How long is the break-even period if the remaining loan term stays the same?
Which valuation, income or policy issue could still change the approval or pricing?

Key takeaway

Self-employed refinancing is normal lending, but the right lender must match the way your income is earned and evidenced.

Official guidance: APRA: Residential mortgage lending guidance

This is general information, not personal financial, tax or legal advice. Lending criteria, fees and eligibility vary.

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