Contractor Home Loans
As a contractor, your contract rate is often much higher than your taxable income. Some lenders will assess you on your contract rate — which can dramatically increase your borrowing power.
Contract Rate Assessment
Some lenders gross up your day/hourly rate to an annual equivalent and assess you as if you were a PAYG employee. This often doubles your borrowing capacity.
Tax Return Assessment
Other lenders use your taxable income from tax returns — which is usually much lower after business deductions. This is the standard (and limiting) approach.
Contract Tenure
Lenders typically want to see 12+ months of continuous contracting in the same industry. Current contract documentation is essential.
Contract Rate vs Tax Return: Real Example
Consider an IT contractor earning $1,200/day on a 12-month contract. After deductions, their taxable income might be $120,000. But annualised contract income is $264,000.
Tax Return Assessment
~$720,000
Based on $120k taxable income
Contract Rate Assessment
~$1,580,000
Based on $264k annualised
Qualifying for Contract Rate Assessment
- Current executed contract (some lenders need 6+ months remaining)
- Minimum 12 months continuous contracting history in same industry
- ABN registered and GST registered
- Operating through your own entity (Pty Ltd or sole trader)
- Some lenders require the contract to be with an unrelated party
- Industry experience matters — IT, engineering and medical contractors are favoured
Find Out Which Assessment Works for You
We\'ll review your contract and determine the best assessment method.
Request Assessment