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Low doc home loans guide

  • Compare low doc home loans, rates and eligibility criteria from top Australian lenders.
  • Get expert tips on how to apply and the documents you’ll need for a low doc home loan.

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Compare low doc home loan providers and interest rates

Compare the best low doc home loans in Australia. Check your eligibility with 26 lenders online, instantly. We display all low doc home loans on our database and we’re not paid by lenders if you click through to their website. The table is sorted by lowest regular repayment. Use the filters to search for your best low doc home loan. Read the comparison rate warning and other important information.

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Rates updated 02 December 2024

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What is a low doc home loan?

A low doc home loan doesn't require the standard proof of income and employment that regular home loans do. Low doc home loans are designed for self-employed individuals, contractors, business owners, and other ABN holders who don’t earn a fixed salary.

Low doc loans offer a solution in cases where the borrower cannot provide payslips, tax returns or employment contracts to prove they can afford a home loan.

While low doc loans can be suitable for certain borrowers, there are drawbacks. For example, low doc borrowers generally can't access the best home loan rates. This is on account of the higher level of risk for the lender when offering a low doc home loan versus a standard loan.

In other ways, low doc home loans are the same as any other loan. For example, there are:

While Australia’s major banks offer low doc home loans to eligible self-employed borrowers, their requirements still tend to be stricter than those of smaller, specialist non-bank lenders.

Mansour Soltani home loan expert

Mansour Soltani , Money's home loan expert

“There's a product out there for every need. Every borrower will be in a different scenario in terms of what they can and can’t show the lender, and there are some low doc lenders who will ask you for next to no documentation. But they'll charge you for the privilege.”

Mansour Soltani , Money's home loan expert

Who are low doc home loans for?

Low doc home loans are designed for ABN holders who are registered for GST. Some lenders require a minimum trading duration, e.g. 6-12 months.

Here are some examples of borrowers who commonly seek out low doc home loans.

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Self-employed people and contractors

If you’re self-employed, you may need a low doc loan, which requires less documentation. Lenders may be more likely to approve your application if you have a history of being a PAYG employee in the same industry as you’re currently working in.

2

Small-business owners

Your business may experience fluctuating income and profits, which can make it hard for you to show a steady financials to lenders. For example, if your revenue was lower or your expenses were higher than usual in the past year, you might need to find other ways to prove that you can afford a home loan.

3

Bad credit borrowers

“Some low doc lenders don't check your credit rating,” Mansour explains. “They look at other things, such as whether your accountant is willing to sign off on your loan through an accounts declaration.” For this reason, a low doc application is a common option for those seeking a bad credit home loan (aka, ‘near prime’ loan).

The following low doc borrower examples are based on Mansour’s clients who required assistance with their application.

Low doc home loan examples

"A client of mine who runs a funeral parlour just bought another site for his business and he spent $300,000 renovating it. This hammered his borrowing capacity when applying for a home loan.

"If you're a business owner and you've had a lot of capital expenditure that year, a low doc loan can be worth looking at. It means you have flexibility over how you can demonstrate that you can afford the loan. What your business was doing in any given year becomes less of a determining factor."

"For some borrowers I work with, a reason why they don't want to show documentation to the lender is they've been minimising their income to reduce their tax bill.

"So their accountant’s been really creative with their accounting and pushed their income right down.

"The problem is when you then go to the bank and you say 'here's my income tax return', they’ll say that’s not enough for us to give you the loan you want.

"In that case, a low doc loan means the borrower might not need to show tax returns. Instead their accountant can sign a document stating they can afford the loan."

Low doc home loans vs standard home loans

Income requirements

Low doc home loan

Flexible (fewer) income verification requirements.

Standard home loan

Full documentation required to prove your income.

Low doc home loan

Usually up to 85% but varies by lender.

Standard home loan

Usually 95% (with lender’s mortgage insurance).

Interest rates

Low doc home loan

Depends on the application but generally high compared to standard loans.

Standard home loan

Lower than low doc rates but vary based on the LVR and other factors.

Fees

Low doc home loan

Usually higher than standard loans. Additional ‘risk fees’ may apply based on a percentage of the loan amount.

Standard home loan

Application

Low doc home loan

Some lenders only allow applications through a mortgage broker.

Standard home loan

You can usually apply directly with a lender or through a broker.

Low doc home loanStandard home loan

Income requirements

Flexible (fewer) income verification requirements.

Full documentation required to prove your income.

Usually up to 85% but varies by lender.

Usually 95% (with lender’s mortgage insurance).

Interest rates

Depends on the application but generally high compared to standard loans.

Lower than low doc rates but vary based on the LVR and other factors.

Fees

Usually higher than standard loans. Additional ‘risk fees’ may apply based on a percentage of the loan amount.

Application

Some lenders only allow applications through a mortgage broker.

You can usually apply directly with a lender or through a broker.

The table above highlights a few key differences between low doc home loans and regular home loans that are important to understand before making an application.

Low doc home loan pros and cons

Pros
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  • Lenders are normally flexible with documentation
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  • Access to most home loan types and features - variable rate, fixed rate, offset account, etc.
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  • Typically a quicker process as there’s less paperwork involved
Cons
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  • Higher interest rates compared to standard home loans
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  • Often come with an application or risk fee, which is usually 1% of the loan amount
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  • Requires a 80% loan-to-value ratio (LVR) (i.e. a minimum 20% deposit)

Low doc vs alt doc vs no doc home loan

The terms 'low doc', 'alt doc' and 'no doc' are sometimes used interchangeably, but they generally refer to different document requirements when applying for a home loan:
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Low doc home loan

Requires a reduced amount of proof to demonstrate to the lender that you can afford the repayments on the loan.

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Alt doc home loan

An alt doc loan offers flexibility in which kind of documentation you can provide when applying for the loan, but there could still be strict eligibility criteria.

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No doc home loan

These are home loans that require the absolute bare minimum of proof. For example, a borrower might only need to provide a statement of income signed by themselves and their accountant.

According to Money’s home loans expert, Mansour Soltani, the less documentation you provide with your application, the more your loan will cost.

How to apply for a low doc home loan

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1. Book a consultation with a home loan specialist or mortgage broker

This step isn’t always necessary with a standard home loan, but it’s usually required for a low doc application. This will allow your lender or your broker to understand your situation and figure out which loans you might qualify for. They’ll also tell you what paperwork you can use to apply.

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2. Submit an application form

This will include information about yourself (plus any joint applicants), your business, assets you own, other debts and dependents you have, plus details about the loan you’re applying for (e.g. loan amount and duration).

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3. Provide supporting documents

You’ll also need to submit any documents you discussed with the home loan specialist or your broker. This often means speaking to your accountant to request documents or signed declarations.

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4. Property valuation and contract of sale

As a final step in the application process, the lender will arrange a valuation of the property you’re buying to ensure its value is high enough relative to the loan amount. You’ll also need to provide a contract of sale for the property. If the lender is satisfied, your loan will be approved and the funds released to the seller (a process known as settlement).

If you have a 20% deposit and the accountant is willing to sign off on the loan, then you’re generally good to go. This is known as an “accountant’s declaration.”

Documents needed for a low doc home loan

The documents you need to submit will depend on the lender and your personal situation. The time frame covered by the documents can also range from 6 months to 2 years or longer.

Generally speaking, lenders may accept the following documents (or a combination of them) as proof of eligibility:

  • Proof of ID (passport, driver’s licence)
  • Most recent Personal Tax Return and Notice of Assessment (NOA)
  • Statement or Tax Return
  • Business bank account statements
  • Proof of ABN and GST registration
  • PAYG Payment Summary/'Tax ready' Income
  • Business Activity Statement(s) (BAS)
  • Financial statements executed by an accountant

Plus...

  • An income statement signed by you and your accountant declaring your financial position and that you can afford the loan repayments.

Low doc approval based on income declaration

Mansour Soltani home loan expert

Mansour Soltani , Money's home loan expert

“I'm helping a client at the moment where he's going to sign an income declaration and his accountant is going to sign a declaration. The lender views that as two income verifications, but will charge a risk fee and a high interest rate. If you want a lower risk premium, you'll need to provide more verification, such as bank statements showing how much money is going into the account. Basically you can choose how much documentation you want to hand over – just remember the lender will choose an interest rate to match.”

Mansour Soltani , Money's home loan expert

Remember, if you need to apply for a home loan with minimum documentation initially, you can always refinance it to a better rate down the track when your business is more established or in a more stable financial position.

Low doc home loan features that can save you money

Low doc home loans typically offer the same features as regular loans. However, since interest rates and fees are often higher for low doc loans, getting a loan with features that can minimise interest costs is usually a priority for borrowers.

  • Repayment flexibility: Many contractors, business owners and self-employed people have irregular income, sometimes with large one-off payments coming in at once. Having the flexibility to put these lump-sum payments towards your mortgage (without penalty fees applying) could help you pay it off quicker and reduce the amount of interest you pay.
  • Redraw facility: A redraw facility allows you to access any extra repayments you’ve made on your home loan if you need cash.
  • Offset account: A low doc home loan with an offset account reduces the amount of interest charged on the loan by linking a savings or transaction account to the loan. Interest is calculated on the loan by deducting your offset account balance from your home loan balance. If you’ve got savings or other cash sitting on the sidelines, an offset account could save you thousands of dollars over the life of the loan.

Learn more about how a home loan offset account and redraw facility differ.

Home loans guides & resources

What's the next step on your property journey? Our home loan guides will help you navigate the road ahead, whether you're buying, building or looking to save on an existing loan.

Low doc home loan FAQ

Because low doc home loans are considered risky by lenders, they often have a lower maximum LVR of 60%. In other words, low doc borrowers may require a deposit of at least 40%.

Some lenders will allow an LVR of up to 90% or even 95% if you can prove that your income can service the mortgage but you will usually have to pay lender’s mortgage insurance (LMI) if your LVR is above 80%.

LMI is a one-off cost charged by your lender to protect them against losses in the event that you can’t make mortgage repayments. It can cost several thousand dollars and can usually be rolled into your mortgage so that you don’t have to pay it upfront.

Yes, there are low doc home loan options available from some specialist lenders for borrowers with bad credit (near prime). These loans are generally more expensive than prime loans.

Low doc home loan interest rates are usually higher than regular home loan interest rates because lenders view low doc borrowers as being higher risk. However, if you have a deposit of 40% or more you may be able to secure interest rates that are comparable to those of standard home loans.

Each of Australia’s big four bank, as well as a range of specialist non-bank lenders in Australia offer low doc home loans for self employed business owners:

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  • ANZ
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  • Axis Lending
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  • Bluestone
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  • Commbank
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  • Connective Home Loans
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  • La Trobe Financial
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  • Liberty Financial
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  • MA Money
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  • NAB
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  • ORDE Financial
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  • Pepper Money
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  • Red Rock
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  • Red Zed
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  • Reduce Home Loans
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  • Resi
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  • Resimac
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  • St.George Bank
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  • Vast Capital
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  • Westpac

An alt doc loan (alternative documentation loan) is for borrowers who lack the usual paperwork to show their income or financial situation. Alt doc loans generally need more detailed evidence and have a slightly different approval process compared to low doc loans.

Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.

Mansour Soltani is Money.com.au’s home loans expert. He’s a mortgage broker with more than 20 years of experience in the finance and real estate industry. Mansour is the Director of Soren Financial and has been featured in publications such as the ABC, Domain.com.au and Australian Broker.

Important information

Home loan comparison rates are calculated based on a loan amount of $150,000 repaid over a 25-year term with monthly repayments. The comparison rates only apply to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you.

General information only

The information on this page is general in nature and has been prepared without considering your objectives, financial situation or needs. You should consider whether the information provided and the nature of any home loan product is suitable for you and seek independent financial advice if necessary.

We are not providing you with a recommendation or suggestion about a particular home loan. You should read the relevant disclosure statements or other offer documents before deciding whether to apply for or continue to use a particular product.

What products, features and information are shown

While we make every effort to ensure all home loans available in Australia are shown in our comparison tables, we do not guarantee that all products are included.

Our product comparisons may not compare all home loan features and attributes relevant to you.

Product information, such as interest rates, fees and charges, is subject to change without notice. Before acting on any information, you should confirm the relevant product information with the lender.

How home loans are sorted and filtered by default

Users can easily change the sort order and apply product filters to our product comparison tables. However, when you arrive on a page initially, by default home loans are sorted by:

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  • Lowest regular repayment amount, then;
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  • Loans interest rate, then;
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  • Lowest comparison rate, then;
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  • Provider name (A-Z)

Some home loan products listed in our tables are available through a mortgage broker. These are the products with an option to ‘Check Eligibility on Money.com.au’. Mortgage brokers may not be able to offer loans from every provider and there may be more suitable loans for your personal circumstances.

Mortgage brokers are not authorised by Money's Australian Credit Licence and operate under their own Australian Credit Licence, or as a credit representative of another Australian Credit Licensee. Mortgage brokers can make recommendations about home loan products that may suit your objectives, financial situation and needs.

Our tables feature all home loans available from lenders on our database that match the search criteria selected. Lenders do not pay to feature in our tables, nor do we earn commission if you click to visit a lender’s website. The order of the products in the table is not influenced by any commercial arrangements.

If you get help from a mortgage broker as a result of visiting this page, we may earn a commission.

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