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Self-employed
Your business is doing fine, but your last tax return doesn’t show it, or your accounts aren’t done yet. That’s exactly what low doc lending is for.
By Yatin Kainth, Financial Adviser FSP1007497. Last reviewed
Short answer
Low doc home loans in NZ let self-employed borrowers prove income with fewer documents than a bank wants, such as GST returns, bank statements, an accountant’s letter or a signed income declaration. They’re offered mainly by non-bank lenders, usually need at least a 20 to 30% deposit, and cost more than bank loans. Most people refinance to a bank once full accounts are filed.
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Each lender has its own mix. Some want two of these, others three. I match your paperwork to the lender that needs least.
| Full doc (bank) | Low doc (mostly non-bank) | |
|---|---|---|
| Income proof | Two years of financial statements and tax returns | GST returns, bank statements, accountant’s letter |
| Deposit | From 10 to 20% | Usually 20 to 30% or more |
| Rate | Lowest | Higher, often 1 to 3% above bank rates |
| Fees | Low | Establishment fee common |
The plan is usually to use low doc for one or two years, then move to a bank once full accounts show the income. See home loans for self-employed.
Rarely in the true sense. Some banks will accept an accountant’s letter or recent accounts for strong applicants. Most low doc lending is through non-bank lenders.
Usually at least 20%, and often 30% or more for higher loan amounts or rural property.
Yes. Expect a higher rate and an establishment fee. The trade-off is getting into the property or refinancing now rather than waiting for accounts.
Yes. Contractors with a steady history are often good candidates, especially with GST returns and bank statements.
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