Loans.com.au launches 'alt-doc' home loan product for self-employed borrowers
Image by Nihar Reddy via Unsplash
- Loans.com.au has launched alt-doc home loans for self-employed borrowers, with rates starting from 6.89% p.a. (6.93% p.a. comparison rate*)
- Income can be verified without tax returns using BAS statements, a financial declaration, and an ATO summary.
- Designed for established business owners, with lending up to 80% LVR and no ongoing fees.
The Brisbane-based, family-owned non-bank lender is now offering home loan rates from 6.89% p.a. (6.93% p.a. comparison rate*) to 'alt-doc' borrowers that work for themselves or are paid directly by clients or customers.
This includes a wide range of non-PAYG salary earners, from sole traders, contractors, partners, company directors, or trust beneficiaries.
Such borrowers typically face higher hurdles when applying for regular home loans as they generally lack the required documentation.
Unlike the standard self-employed loan qualification pathway of using two years of tax returns, loans.com.au's new alt-doc home loan verifies income via a signed financial declaration and six months of business activity statements (BAS) supported by an ATO account summary.
According to loans.com.au, no tax returns or financial statements are needed to qualify for this loan, although the borrower's ABN must have been registered and trading continuously for at least 24 months.
The new loan's interest rates compare favourably against other self-employed mortgage products on the market.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.89% p.a. | 6.93% p.a. | $3,290 | Principal & Interest | Variable | $0 | $530 | 70% | |||||||||||||
6.99% p.a. | 7.26% p.a. | $3,323 | Principal & Interest | Variable | $295 | $0 | 85% | |||||||||||||
6.84% p.a. | 7.11% p.a. | $3,273 | Principal & Interest | Variable | $0 | $0 | 80% | |||||||||||||
6.99% p.a. | 7.03% p.a. | $3,323 | Principal & Interest | Variable | $0 | $530 | 80% |
Premium business owners targeted
Loans.com.au's Managing Director Marie Mortimer said the innovative product had been deliberately designed for a niche group of high-quality self-employed borrowers who could be underserved by traditional banking models.
"There are millions of Australians running their own businesses, and many have built successful, profitable businesses over a number of years," Ms Mortimer said.
"They have strong credit histories, good incomes and can comfortably afford a home loan. They just don’t always fit neatly into the traditional way home loans are assessed."
Image: loans.com.au Managing Director Marie Mortimer
Ms Mortimer said the new loan isn't a product for every self-employed borrower, only those with strong credit histories and reliable incomes.
"The innovation is in recognising the quality of those customers and assessing them in a way that better reflects how they run their businesses," she said.
"We think these customers deserve a home loan that reflects their credit quality rather than paying a premium simply because they demonstrate their income differently."
The variable and fixed-rate loans are available to owner occupiers and investors on LVRs (loan-to-value ratios) up to 80%, although the lower variable rates are reserved for borrowers with LVRs up to 70%.
The loan boasts no application fee or ongoing fees, allows unlimited extra repayments, and comes in 'bold' and 'bare' varieties, with 'bold' loans featuring an offset sub-account.
Interest rates on 'bold' loans are ten basis points (0.10%) higher than the rates available on 'bare' loans.
Note: In the interest of full disclosure, Savings.com.au and loans.com.au are both associated with Firstmac.