If you are self-employed and your tax returns do not reflect what you actually earn, an alt doc home loan lets you prove your income a different way. Instead of the standard two years of tax returns, alt doc lenders accept BAS statements, bank statements and accountant verification to assess your borrowing capacity.
By Jason Given - August 2026 - 6 min read
Alt doc (alternative documentation) is a type of home loan where the lender accepts documentation other than full tax returns to verify your income. Instead of the standard two years of tax returns and financial statements, alt doc lenders accept BAS statements, business bank statements, accountant letters or combinations of these.
The term "alt doc" has largely replaced "low doc" in the Australian market, though both describe essentially the same product type. The shift in terminology reflects a broader range of documentation options now available, and a move away from the perception that these loans require less scrutiny. Alt doc lenders still assess your ability to repay - they simply accept different evidence of income.
Alt doc loans are designed for borrowers who have genuine income but cannot easily prove it through standard tax documentation. The most common situations include:
The common thread is a gap between what your tax return says and what you actually earn. Alt doc bridges that gap with evidence the lender can verify independently.
There are several verification methods, and different lenders accept different combinations. The main categories are:
Twelve months of Business Activity Statements lodged with the ATO. The lender uses your GST turnover to estimate income, applying a margin to account for business expenses. Different lenders apply different margins - some use 50% of GST turnover, others 60%, and some use a sliding scale based on industry type.
Three to twelve months of business bank statements. The lender analyses transaction patterns to determine income. Some lenders look at net deposits after removing transfers between accounts, while others assess gross deposits. The period required and the methodology vary significantly between lenders.
A letter or declaration from your registered tax agent or BAS agent confirming your income. The accountant typically needs to have been acting for you for at least 12 months. Some lenders require the accountant to be a CPA or CA, while others accept registered BAS agents.
Many lenders accept combinations of the above - for example, BAS plus an accountant letter, or bank statements supported by BAS. These hybrid approaches can sometimes unlock higher borrowing amounts than a single verification method alone.
This is where alt doc gets interesting - and where broker selection genuinely matters. Different lenders use different methodologies to calculate income from the same documents, and the variation is significant.
For BAS-based assessment, one lender might use 50% of your GST turnover as assessable income while another uses 60%. On $400,000 annual turnover, that is the difference between $200,000 and $240,000 in assessed income - which translates to a meaningful difference in borrowing capacity.
For bank statement assessment, some lenders look at net deposits (removing internal transfers), while others look at gross credits. Some average across the full period, others weight recent months more heavily.
The same borrower with the same documents can have vastly different borrowing capacities depending on which lender assesses them. This is why working with a broker who knows the alt doc space matters - getting the lender match right is the single biggest factor in the outcome.
Alt doc loans typically carry a rate premium of 0.3% to 1.5% above equivalent full doc products. The exact premium depends on the lender, your LVR, the verification method used, and the strength of your overall application.
Some lenders also charge an alt doc loading on lenders mortgage insurance (LMI), which can add to upfront costs if you are borrowing above certain thresholds.
LVR is typically capped at 80% for alt doc, with some lenders limiting to 60-70% depending on the documentation type and property location. This means you generally need a larger deposit or more equity than a full doc borrower.
It is worth checking whether full doc with a specialist self-employed lender could achieve a better result. Some lenders are more flexible in how they assess self-employed income under full doc, and the rate saving over the life of the loan can be substantial.
Alt doc and low doc are functionally the same product. The industry has largely moved to alt doc terminology, but many borrowers still search for low doc and some lenders still use the older name. If you see either term, you are looking at the same type of loan.
Full doc requires complete tax returns - typically two years of personal and business returns, notices of assessment, and financial statements. The documentation burden is higher, but the rates are better and LVR limits are more generous.
The right choice depends on what documentation you have available and the trade-off between rate and convenience. If your tax returns are current and reflect your income accurately, full doc will almost always be the better option. If they do not, alt doc gives you a path forward without waiting for the next tax year.
Many alt doc borrowers plan to refinance to a full doc loan once their tax returns are lodged and up to date. This is a sound strategy - the rate saving from moving to full doc can be significant over the remaining life of the loan.
At Lendology, we plan both stages from the outset. The alt doc loan gets you into the property or achieves your immediate goal. The refinance to full doc, typically 12-24 months later, locks in a better long-term rate. Knowing the exit strategy upfront means you can make an informed decision about whether the short-term rate premium is worth it for your situation.
Yes, most alt doc lenders accept investment property applications. LVR limits may be slightly lower - typically 70-75% compared to 80% for owner-occupied properties. Some lenders also apply a slightly higher rate premium for investment alt doc, but the product is widely available.
Most lenders require 12-24 months of ABN registration. Some accept shorter periods with strong supporting evidence such as industry experience, a substantial deposit, or a strong accountant declaration. The longer your self-employment history, the more lenders are available to you.
Largely yes. Alt doc is the more modern term reflecting the broader range of documentation accepted. Many lenders have moved to alt doc branding but the product is functionally the same. Both allow income verification without full tax returns, and the rates, LVR limits and documentation requirements are comparable.
Questions about your specific situation?