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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
7.09% p.a.
7.16% p.a.
$3,357
Principal & Interest
Variable
$0
$985
70%
7.04% p.a.
7.41% p.a.
$3,340
Principal & Interest
Variable
$0
$0
90%
7.34% p.a.
7.37% p.a.
$3,058
Interest-only
Variable
$0
$396
80%
7.39% p.a.
7.66% p.a.
$3,458
Principal & Interest
Variable
$295
$0
85%
7.44% p.a.
7.62% p.a.
$3,476
Principal & Interest
Variable
$10
$1,325
80%
7.59% p.a.
7.86% p.a.
$3,527
Principal & Interest
Variable
$0
$0
80%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.

More details
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

What is a low doc home loan? 

A low doc or ‘low documentation’ home loan is generally available to those unable to provide two years of tax returns or financial records that a standard home loan application requires. This typically includes those self-employed or those who own their own business.

Low doc home loans were first introduced by non-bank lenders through mortgage brokers in the late 1990s to provide an alternative to mainstream lending. These days, not every lender offers low doc loans - those that do often require a larger deposit or charge a higher interest rate than regular home loans.

Who are low doc home loans for?

Low doc home loans are special lending products for those who might struggle to provide the standard proof of income documentation needed to apply for a home loan. This documentation typically includes:

  • Copies of most recent payslips.
  • Pay summaries.
  • Rental income statements.
  • Dividends. 

What documents are required for a low doc home loan?

Given those applying for a low doc home loan are typically self-employed or run their own business and are unable to provide all documentation, proof of income is required using a combination of the following:

  • Proof of ABN and/or GST registration.
  • Business Activity Statements (BAS).
  • Business Account transaction statements.
  • Accountant's letter.
  • Personal tax returns.

Because of the National Consumer Credit Protection Act (NCCP) Act, lenders are required to have some kind of income verification from you before they approve your loan, so unless you can provide some proof of income, you won’t be approved. 

How do low doc home loans compare? 

Low doc home loans are similar in execution to standard home loans but can differ when it comes to interest rates, fees and features. 

Interest rates

Generally speaking, low doc home loans don’t have interest rates that are as competitive as regular home loan rates. In most cases, they come with higher rates to compensate lenders for the higher perceived risks low-doc borrowers might pose. 

Low doc home loans still let you choose between variable, fixed and split interest rates. Some low doc loans can be interest-only too, but this isn’t as common. 

Fees 

The standard home loan fees usually apply to low doc home loans too – that’s upfront and ongoing fees as well as refinancing fees or break costs for fixed-rate loans. These fees can also be higher than normal loans although this will depend on the lender. 

Instead of charging lenders mortgage insurance, some low doc loan providers might charge a risk fee (also known as a low deposit premium) to account for the added risks associated with a low deposit loan. 

Loan features 

A positive of low doc home loans is that they can still come with the usual home loan features:

  • 100% offset accounts.
  • Line of credit options.
  • The ability to make extra & more frequent repayments.
  • Split and interest-only loan options.

Loan-to-value ratio restrictions

Low doc providers are less likely to accept borrowers with deposits smaller than 20%. In fact, some restrict low doc home loans to a maximum loan-to-value ratio of 60%, which would require a deposit of at least 40%. This can also depend on how long you have been in business. Those who have been in business under the same ABN for over two years may be able to borrow more.

Savings.com.au’s two cents 

Low doc home loans are a useful product for those self-employed looking to enter the property market. However, those who aren’t careful can get stuck paying higher interest rates for the life of their home loan.

It’s possible to refinance from a low doc home loan to a full doc or standard home loan after a few years, provided you:

  • Have regularly met your repayments.
  • Have maintained a clean credit history.
  • Can provide your tax returns as proof of income.  

If your lender allows you to do this, then switching to a full doc home loan could be much cheaper in the long-run.

Article first published 30 May 2019, last updated 21 October 2022.

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Frequently Asked Questions

The short answer is that it's very hard to secure a home loan to buy a home if you're unemployed. This is because without a regular (or any) income, you will struggle to make the regular repayments on your loan, unless you're receiving a large welfare cheque from the government or regular insurance payments (but even then, some lenders don't accept these as valid sources of income). As income is the biggest factor that determines whether or not you get a home loan, it would be nonsensical for a lender to give someone without an income a loan.
If you aren't earning any income at all, then unless you're flush with cash you will probably find it extremely hard to buy a house because it'll be very difficult for you to be approved for a home loan. But you can buy a house on a low income as long as you can prove you can pay off the loan, have a good credit score, and look within your means. However, there are some lenders which may accept welfare payments or insurance payments as income.

The policies of different lenders may vary, but you will generally need to provide proof of income.

If you're self-employed, some lenders won't allow you to borrow any more than 60% of the value of the property. Those that do will likely charge Lenders Mortgage Insurance (LMI). However, this can all depend on how stable and reliable you can prove your income to be. Someone with a strong history of earning a reliable income running the same business for many years is likely to be able to borrow at a higher LVR than someone that's only been self-employed for a year.

If you've been self-employed for less than two years, you may still be able to get a home loan - but there's likely to be strings attached. Some lenders may require you to have worked in your industry for longer than two years if you've only been self-employed for one year.

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