Key Takeaways
- Low doc loans use BAS, accountant letters, or bank statements instead of tax returns
- Typically require 12+ months ABN and 20%+ deposit
- Rates are 0.5-1.5% higher than full doc loans
- Good for self-employed borrowers with complex tax structures
- Not a shortcut - genuine income verification still required
- Multiple lenders available with different verification methods
Low documentation (low doc) loans provide an alternative path to home ownership for self-employed Australians who cannot easily verify income through traditional tax returns. While they're not for everyone, they solve real problems for many business owners.
At Mortgage & Finance Advisory, we help self-employed borrowers understand whether low doc is the right option and, if so, which lender offers the best terms. Often we can find a full doc solution that's cheaper - but when low doc is needed, we know the market.
Types of Low Doc Verification
BAS Declaration
Using your Business Activity Statements to demonstrate income. Lenders typically use the GST turnover figure and apply a margin (often 50%) to estimate net income.
Accountant's Letter
Your accountant provides a letter confirming your income. Some lenders accept this as primary verification, others as supporting documentation.
Bank Statement Analysis
Lenders analyse 6-12 months of business bank statements to assess income based on deposits and cash flow patterns.
Self-Declaration
You declare your own income. This option typically requires the highest deposit (often 40%+) and carries the highest rates.
| Verification Type | Min Deposit | Rate Premium | Documentation |
|---|---|---|---|
| BAS Declaration | 20% | +0.5-1.0% | 12 months BAS |
| Accountant Letter | 20% | +0.75-1.25% | Signed letter + BAS |
| Bank Statements | 20-30% | +0.75-1.5% | 6-12 months statements |
| Self-Declaration | 35-40% | +1.0-2.0% | Signed declaration |
Important: Low doc is not a way to borrow more than you can afford. Lenders still verify your ability to repay - they just use different methods. Providing false information is fraud and can result in loan recall and prosecution.
Who Should Consider Low Doc?
- Self-employed borrowers with legitimate income not reflected in tax returns
- Business owners who reinvest profits and minimise taxable income
- Those with complex business structures (trusts, multiple companies)
- Contractors paid through company structures
- Borrowers between accountants with incomplete records
Client Success
A tradesman with a company structure showed only $65,000 taxable income but had strong BAS showing $380,000 annual turnover. Using BAS verification with a 25% deposit, we secured a $520,000 loan at a competitive low doc rate - enabling a purchase that would have been impossible with traditional income verification.
Frequently Asked Questions
A low doc loan uses alternative income verification instead of traditional tax returns. Options include BAS statements, accountant declarations, or bank statement analysis. It's designed for self-employed borrowers who have income that's difficult to verify through standard documentation.
Typically self-employed borrowers with ABN registered for 12+ months who cannot provide traditional income documentation. You'll need good credit history, usually 20%+ deposit, and genuine business income that can be verified through alternative means.
Yes, typically 0.5-1.5% higher than full doc loans due to higher perceived risk. Rates improve with larger deposits (30%+ often gets better rates) and strong credit history. Some lenders offer better rates than others - that's where broker expertise helps.
Yes, once you have two years of tax returns showing sufficient income, you can refinance to a full doc loan at standard rates. Many clients use low doc as a stepping stone while building their documentation history.
Need a Low Doc Loan?
We'll assess whether low doc is your best option and find the right lender.
