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The big four banks are continuing to develop their self-employed offerings, with Westpac becoming the last major bank to move to a one-year income assessment.
Major bank Westpac Banking Corporation (Westpac) has become the latest big four bank to tweak its offering for self-employed borrowers in order to attract more business from this sector.
On Thursday (3 July), Westpac announced that it was introducing a one-year income assessment option (alongside its traditional, two-year income assessment) in order to speed up application assessments and reduce paperwork for self-employed customers.
Borrowers wishing to access this option will need to provide their latest year’s business and personal tax returns (sole traders only require personal tax returns), latest year’s personal ATO Notice of Assessment, and latest year’s business liabilities. ApplyOnline has now been updated to facilitate the change for brokers.
The bank – which reportedly saw a 30 per cent increase in lending to self-employed customers between January 2024 and January 2025 – said the new assessment process would make it simpler and faster for more self-employed applicants to get a home loan.
“More than two million Australians work for themselves, and we’ve seen continued growth in self-employed customers coming to us for tailored support with getting a home loan,” said James Hutton, managing director, mortgages at Westpac.
“Self-employed people often have different needs and challenges in accessing home finance because their income can be more variable, or require additional verification to traditional payslips.
“By introducing a one-year income assessment, we are making the home loan process faster and simpler by requiring less documentation, helping more self-employed Australians to secure their home or investment property sooner.”
He added that reviewing just the latest year of income can help with providing “a clearer representation of recent business performance and borrowing capacity”.
“This is also backed by the expertise and experience of our home lending teams, who understand the unique needs of self-employed applicants and can guide them through the home lending process,” Hutton said.
A spokesperson for Westpac told The Adviser: "Our new one-year income assessment is great option for self-employed Aussies applying for a home loan, including for those applicants choosing to tap the expertise of a broker.
“By introducing a one-year income assessment option, we’re giving brokers more flexibility and tools to support their clients with greater simplicity and speed.”
What are the other majors doing?
While non-bank lenders such as Pepper Money, RedZed, and Resimac have been focusing on self-employed lending growth for years, more banks have been expanding into this arena.
The major banks have traditionally been the home of ‘vanilla’, PAYG home loans, but the big four have been increasingly looking at taking a larger slice of other (sometimes more lucrative) borrower segments.
Australia and New Zealand Banking Group Limited (ANZ) was the first to make changes to the income verification options for home loan applications with self-employed income and has been accepting one year of financials for income verification for self-employed customers for years.
In September 2024, ANZ also began allowing self-employed customers with lenders mortgage insurance (LMI) to provide just one year of financials (although a 20 per cent shading would apply to the net profit before tax).
The Commonwealth Bank of Australia (CBA) made the move to one-year financials at the end of 2024.
At the time, it said the change would allow it to help even more self-employed home buyers achieve their property ownership goals.
National Australia Bank (NAB) also moved to accepting one-year tax returns for self-employed loan applicants at the beginning of this year.
At the time, NAB said it was making the income verification change to make it easier for self-employed borrowers to take out a loan and in recognition that these small-business owners are busy. It also expanded its lenders mortgage insurance (LMI) waiver to more professionals, including those who are self-employed, in March.
The moves come amid a growing self-employed contingent in Australia. Indeed, the self-employed sector makes up a large proportion of Australian businesses, with around 62.5 per cent of Australian businesses being self-employed in June 2024, according to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).
Moreover, labour income from self-employment rose by 5.5 per cent to $29.5 billion in the March 2025 quarter, according to the Australian Bureau of Statistics, as more Australians turn to self-employment amid changing economic conditions, digital work models, and evolving tax policies.
[Related: A sense of self (employed)]
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