Being self-employed does not make you a harder borrower — it makes you a differently documented one. The work is knowing which lender reads your financials the way you would want them read, and presenting the application so they can say yes.
Yes. Self-employed borrowers in New Zealand can get standard home loans at standard interest rates. The difference is how income is evidenced: instead of payslips, lenders use your business financial statements and personal tax returns, usually for the last two full financial years, and often average them. Lenders then apply add-backs — adding non-cash or one-off expenses such as depreciation back to your profit — to arrive at a servicing income. Because lenders differ significantly in how many years they require and which add-backs they accept, the same applicant can be declined by one lender and comfortably approved by another.
Most self-employed people who find the process frustrating are not actually short of income. They are running into a system built around payslips.
A salaried applicant hands over two payslips and the assessment is done in minutes. You hand over two years of financial statements, two tax returns, an IR3, GST returns and a set of management accounts — and then it depends entirely on how the person reading them chooses to interpret the numbers. Depreciation on the ute, the one-off equipment purchase, the interest on a loan you are about to clear: each of those is either added back to your income or it is not, and each one moves what you can borrow.
That interpretation is not consistent between lenders. It is not even consistent between assessors at the same lender. Which is why a self-employed application benefits more from being taken to the right lender, structured the right way, than almost any other kind of lending.
The main-bank default. Two full years of financials and tax returns, averaged. Predictable, and usually the cheapest option if your figures support it.
Several lenders will work from a single year where the business is established, the trend is up, and your accountant can back it up in writing.
Where the most recent year is materially stronger, some lenders will use it alone rather than averaging — a meaningful difference for a growing business.
Depreciation, one-off purchases, home office, shareholder salary adjustments and interest on debt being repaid can all be added back. Policies vary widely.
Where standard evidence is not available, some non-bank lenders will assess on GST returns, bank statements or an accountant’s certificate instead.
Long-term contracting is often treated closer to PAYE than to business income by some lenders, which can materially improve servicing.
The single biggest delay in self-employed applications is an unfiled tax return. Lenders will generally not use a financial year that has not been filed with Inland Revenue, so if last year’s return is still sitting with your accountant, that is the first thing to fix — it usually matters more than anything else on this list.
Beyond that, it helps to have: two years of financial statements and tax returns, your most recent IR3, recent GST returns if you are registered, three to six months of business and personal bank statements, and a short note from your accountant explaining anything unusual — a one-off cost, a change in structure, a year affected by something that has since passed.
If your business has changed shape recently — new entity, new trading name, a partner in or out — say so early. Lenders are far more comfortable with a change that is explained up front than one they discover in the financials.
Most main banks want two full years of financial statements and tax returns, and they usually average the two. Some lenders will work from one year if the business is established and the trend is clearly positive, and a number of non-bank lenders will consider a shorter trading history where the rest of the application is strong.
An add-back is a business expense a lender is willing to treat as income again for servicing purposes, because it is not a real cash cost to you. Depreciation, one-off purchases, home office and interest on debt being repaid are common examples. Add-backs frequently move a self-employed application from declined to approved, and lenders differ widely on which ones they will accept.
Sometimes. If the latest year is materially stronger, some lenders will use it on its own rather than averaging, especially with an accountant’s letter explaining the change and evidence the improvement is continuing. Others will always average. Knowing which lender does what is most of the value an adviser adds here.
Not with a main bank. If your income is fully documented, you are assessed on the same rate card as a salaried borrower. Rates are usually only higher where you need a non-bank or alternative-documentation product because the standard evidence is not available.
That is one of the most common blockers. Lenders generally will not use a year that has not been filed, so if your return is outstanding, getting it done is usually the single fastest thing you can do to improve your position. Interim financials can sometimes bridge the gap with certain lenders.
Yes. Lenders look through to the underlying business profit rather than what you happen to draw, so a low drawings figure does not cap your borrowing. The financial statements and tax returns do the work.
How the LVR rules work and which lenders will look at a smaller deposit.
Defaults or a thin credit file alongside self-employment — what is still possible.
Work out repayments and roughly what you could borrow before you talk to anyone.
Send through your last two years and we will tell you honestly what they support, which lenders fit, and what would move the number. Free, and there is no obligation.