Prepare a refinance when you are self-employed
Self-employed refinancing starts with explaining the income available to support the loan and providing evidence the proposed lender accepts. Organise your business structure, tax and financial records, current debts and household spending before asking for a document list matched to your circumstances. A strong equity position alone does not establish repayment capacity. Ask how the lender will assess variable income and which periods and entities it needs to review.
By Ratey · General information for Australian borrowers.
Example: prepare an explanation of uneven trading
A hypothetical sole trader has completed one unusually large project and now has several smaller ongoing contracts. Rather than calling the project revenue normal annual income, they list the project dates, payment records and the contracts continuing after it. They ask which evidence the lender needs to assess the change.
They also model the proposed repayment against a quieter household cash-flow month. This does not calculate the lender’s approved income or guarantee approval. It produces two useful outputs: an evidence list for the application and a budget check for the borrower.
Make the income structure easy to follow
Draw a simple map for your own preparation: who owns each business, which entity receives revenue, how you receive income and which debts belong to whom. This is particularly useful if a company pays you a salary, several businesses contribute income or a structure changed since your previous mortgage application.
Give the lender a factual description and ask which documents it needs for each part. Avoid treating business turnover, accounting profit and cash transferred to your personal account as interchangeable measures of income. The lender must determine which evidence and assessment method apply.
Keep a note of significant changes: a new contract, an ownership change, a closed business or a different trading pattern. Explain the change accurately and identify records that support it. The goal is a coherent application, rather than a large collection of unexplained files.
Prepare a document index before sending files
CommBank’s self-employed refinancing guide lists business financial statements, individual and business tax returns, ATO notices of assessment, existing home-loan statements and other account statements as common requests. Requirements differ, so ask the proposed lender for the exact periods and evidence it accepts.
Create an index with the document name, entity, period covered, whether it is final or draft, and whether it is available. A missing return then becomes a specific question for the lender and accountant. Do not assume a general checklist establishes eligibility for a particular product.
| Document group | Question to resolve |
|---|---|
| Tax records | Which entities and periods do you need? |
| Financial statements | Must they be finalised, and who must prepare them? |
| Current trading evidence | What supports income since the last reporting period? |
| Existing debts | Which business and personal commitments must be documented? |
| Household spending | What evidence and time period are required? |
Explain variation without inventing adjustments
If income differs sharply between periods, prepare a short explanation supported by records. Distinguish a completed one-off project from ongoing work, and business cash reserves from income available for household repayments. Ask how the lender treats the change rather than selecting your strongest month and annualising it yourself.
Likewise, identify unusual expenses factually and ask whether the lender needs an accountant’s explanation. Do not assume a cost will be added back to income. Treatment of business expenses, retained profits and related debts is lender-specific and needs confirmation.
For your own budget, test a quieter trading period as well as your expected income. Keep upcoming business costs and personal living costs visible. A loan that appears manageable in a strong quarter may leave little room when customer payments arrive late.
Choose a sequence that avoids rework
First ask which assessment pathway and documents apply. Then obtain the requested evidence and compare the offer’s cost. If the lender needs a recently finalised financial period, coordinate the timing with your accountant and ask when other documents would become stale.
Keep the refinance objective separate from an application for extra business funds. Additional borrowing changes the balance and repayment comparison. Ask the lender to explain how the purpose affects the proposal and obtain appropriate professional advice where business or tax consequences are involved.
The equity-versus-borrowing-power guide explains why security and repayment capacity are separate questions. Once the documentation is clear, use the refinance checklist to manage valuation, contract and settlement steps.
Your next-step checklist
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Common questions
Do all lenders require two years of tax returns?
Do not assume one rule applies everywhere. Ask which documentation pathway is available for your structure and circumstances, and what records it requires.
Can good repayment history replace income evidence?
Provide your history, but ask the proposed lender what income and expense evidence it still requires. An existing loan does not establish approval for a new one.
Can Ratey calculate my approved self-employed income?
This guide and the refinance calculator do not reproduce a lender’s income assessment. Use confirmed offer details for the cost comparison and ask the lender how it assesses your records.
Sources and assumptions
These primary sources support the explanations above. Examples use invented figures to show the calculation or decision; they are not available loan offers. Check your lender’s terms for your circumstances.
Calculations are estimates and do not establish borrowing eligibility. Read the calculation methodology.
Compare the offer once the details are clear
Use the rate, balance, term and fees confirmed for your application.