The short version
All four major banks now accept one year of financials for a self-employed home loan. ANZ went first in September 2024, CBA followed at the end of that year, NAB moved in March 2025 and Westpac joined in July 2025. The old rule that a bank wouldn't look at you without two years of tax returns is gone.
What's left is the fine print, and that's what decides your loan. Most one-year options stop at 80% LVR. Some banks only count part of your income. The return has to be lodged and assessed, and it can't be too old. Below is what each major bank accepts as at August 2026, and where a non-bank alt-doc loan still beats all four.
A note on scope. Home loans are consumer credit regulated under NCCP. Aurelius Capital arranges them for self-employed and business-owner clients only, not standard PAYG borrowers, as a credit representative (560751) of Viking Money Pty Ltd under ACL 471435 (Viking Aggregation Pty Ltd). Reading business financials is everyday work for a commercial broker, which is why we do this lending.
Why the two-year rule went
Tax returns go out of date fast. A return for the year ended June 2025, lodged in May 2026, is the newest paper a bank can ask for, and some of that income was earned almost two years before you apply. If your business has grown since, the older year pulls your average down. If the newer year is lower, most two-year policies just use the lower figure. Either way, you lose out.
The banks didn't change out of kindness. Westpac's own figures showed a 30% jump in lending to self-employed customers in the year before it changed policy. Brokers write 81% of new home loans and can take a file to any lender. Non-bank lenders had also spent a decade building whole loan books from the borrowers the two-year rule turned away. Customers were leaving, so the major banks changed.
What each major bank accepts
Where things stand as at August 2026:
| Bank | One-year policy | The detail that matters |
|---|---|---|
| ANZ | Most recent year's return, which can be up to 22.5 months old | First to change (September 2024), and the only one that goes above 80% LVR with LMI: it accepts one year of evidence but cuts net profit before tax by 20%. It also accepts director fees and dividend income on one year of paperwork |
| CBA | One year of financials for self-employed applicants | In place since late 2024 |
| NAB | One year of personal and business tax returns | Live since March 2025. The return must be final and lodged, not interim or accountant-prepared figures |
| Westpac | Most recent year's tax returns plus the ATO Notice of Assessment | Live since July 2025. Business debts are checked separately |
Treat the table as a snapshot. Banks change credit policy without announcing it. The two-year rule lasted decades, then all four majors dropped it within a year. Part of a broker's job is checking each bank's current policy on the day the application goes in, not the version that made the news.
The conditions that decide it
Five rules do most of the deciding:
- The 80% LVR cap. Most one-year options don't cover loans that need lender's mortgage insurance (ANZ's reduced-income version is the exception). With less than a 20% deposit, your real options are two full years of financials, alt-doc, or waiting.
- Your ABN still needs history. One year of financials is not one year of trading. Most policies still want the ABN registered, usually with GST too, for around two years. A company set up eighteen months ago with one strong return is treated differently from a business that traded for five years and lodged one return under a new structure.
- The return must be assessed. That means lodged with the ATO and a Notice of Assessment issued. A return your accountant has prepared but not lodged counts for nothing at the major banks.
- Age limits. Each bank limits how old your "most recent" return can be. ANZ's limit is 22.5 months, so if you apply in the wrong month, last year's return is too old before the new one is lodged.
- Income cuts. Where a bank only counts part of your latest year's profit, a strong year cut by 20% can come in below another lender's two-year average. How a bank assesses your income matters more than its headline policy. The right lender for one self-employed borrower is often the wrong one for the next.
Where one year wins, and where alt-doc still does
The bank route wins on price. If you qualify, you get normal bank rates on the back of one good year. Non-bank alt-doc loans usually cost 0.5 to 1.5% p.a. more than similar full-doc rates.
It also lets you borrow more. Say your taxable income went from $120K in FY2024 to $190K in FY2025. A policy that averages two years assesses $155K. A one-year policy assesses the full $190K. Every application is currently tested at the actual rate plus APRA's 3% buffer, and at those settings an extra $35K of assessable income can lift your maximum loan by six figures.
Alt-doc is still the better choice in five cases:
- You haven't lodged a return yet. Alt-doc lenders check your income using BAS, an accountant's declaration and business bank statements instead. See how lenders assess self-employed income for how that works.
- Your ABN is under two years old.
- Your LVR is above 80% and beyond what ANZ's reduced-income option covers. Several non-banks lend up to 85 to 90% on alt-doc evidence, at a higher rate.
- You have an ATO debt or payment plan. The major banks are strict about this. Several non-banks aren't.
- The DTI cap. Since February 2026, APRA has limited the banks to 20% of new lending at six times debt-to-income or more. Non-bank lenders don't have this limit. If you already carry investment or business debt, that can decide the whole application.
None of this locks you in. The usual approach is to settle on alt-doc now and refinance to full-doc pricing once your second return is lodged, usually 12 to 24 months later.
How to go about it
Lodge your return before you apply, and wait for the Notice of Assessment. The most common avoidable delay is a return sitting in your accountant's drafts folder. Work out the add-backs with your accountant before anything goes to a lender. Taxable income and the income a lender assesses are different numbers, and the difference usually helps you. Check that your ABN and GST registration dates back up the trading history you're claiming. Then choose the lender by how it assesses income, not by whichever one-year policy got the press coverage.
That last step is what a broker does every day. What we arrange is on the self-employed home loans page. If you've got one strong year on paper and want to know which lender would let you borrow the most, the application form takes under a minute, and most enquiries get a reply within four business hours.