Comparing home loans when you're a plasterer means looking past the advertised rate.
Most plasterers work as sole traders or subcontractors, which means lenders treat your income differently. A product with a low advertised rate might require two years of full financials and exclude casual work, while another lender with a slightly higher rate might accept three months of bank statements showing your invoices and deposits. The difference in what you can borrow and how quickly you can settle often matters more than a 0.1% rate difference.
How lenders assess plasterer income changes the comparison
Lenders assess your income by looking at your ABN trading history, tax returns, and profit margins. Some lenders average your last two years of taxable income, which penalises you if you've written off tools, vehicles, or had a slower year. Others focus on your business activity statements or bank statements showing regular deposits from clients.
Consider a plasterer earning around $85,000 taxable but with $15,000 in legitimate deductions for ute finance, materials, and insurance. One lender might cap borrowing capacity at $85,000 income. Another that uses gross income from your BAS might treat you closer to $100,000, which can shift your borrowing capacity by $50,000 or more depending on your other commitments. When you compare home loan options, the structure of your income documentation matters as much as the product features.
Variable rate versus fixed rate for trade income
A variable rate adjusts with the Reserve Bank's decisions and gives you the flexibility to make extra repayments without penalties. A fixed rate locks your repayments for one to five years but usually restricts extra repayments to $10,000 or $20,000 per year.
If your plastering work fluctuates between commercial projects and residential renovations, a variable rate lets you pay down more when you've had a solid quarter and pull back to minimum repayments when work slows. Fixed rates suit plasterers who want certainty and don't expect to make lump sum repayments during the fixed period. A split loan combines both, letting you fix part of your loan for stability and keep part variable for flexibility.
Offset accounts and how they work for contractor cashflow
An offset account is a transaction account linked to your home loan. Every dollar in the offset reduces the balance on which you pay interest, without locking the cash away.
If you carry $20,000 in your offset and owe $400,000 on your loan, you only pay interest on $380,000. For a plasterer holding funds for tax, GST, or upcoming material orders, an offset means that money works for you while it sits. Not all loan products include a full offset. Some offer partial offsets or charge a higher rate for the feature. If you regularly hold $10,000 or more in your business account between jobs, the interest saved usually covers any rate difference.
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Loan to value ratio and what it means for deposit size
Your loan to value ratio is the amount you borrow divided by the property value. Borrowing 80% or less means you avoid Lenders Mortgage Insurance. Borrowing above 80% triggers LMI, which can add thousands to your upfront costs.
A plasterer buying at $500,000 with a 10% deposit borrows $450,000, which is a 90% LVR. LMI on that loan might cost $15,000 to $18,000 depending on the lender. If you can increase your deposit to 20%, you borrow $400,000 at 80% LVR and pay no LMI. Some lenders offer LMI waivers for tradies in specific professions or under certain schemes, which can close that gap without requiring a larger deposit.
Loan features that matter versus features that cost you
Redraw facilities let you access extra repayments you've made, but some lenders charge fees or delay access by several days. Portability lets you transfer your loan to a new property without refinancing, which saves on discharge and application fees if you're upgrading or relocating for work.
In our experience, plasterers value flexibility over features they'll never use. A loan with free redraw, no ongoing monthly fees, and the ability to make unlimited extra repayments usually outperforms a package with loyalty discounts, bonus reward points, or rate discounts that expire after 12 months. When you compare loan products, focus on the features that reduce cost or increase control, not the ones that look appealing in a brochure.
How to compare rates without missing the real cost
The advertised rate is not the same as the comparison rate. The comparison rate includes most fees and gives you a more accurate picture of what the loan costs over its life. A loan advertising 6.00% might have a comparison rate of 6.18% once you factor in application fees, annual fees, and other charges.
Some lenders waive application fees or offer cashback for refinances, but attach those benefits to a higher ongoing rate. A $2,000 cashback might look appealing, but if the rate is 0.15% higher than another product, you'll pay that back within two years on a typical loan amount. Look at the comparison rate, the ongoing monthly or annual fees, and whether any discounts are conditional on holding other products like credit cards or transaction accounts.
When to get pre-approval before comparing in detail
Pre-approval tells you what you can borrow and locks in a rate for three to six months. It also shows sellers you're ready to move, which matters in a tight market.
Getting pre-approval early means you can compare loan products based on what you're actually eligible for, rather than wasting time on products that won't accept your income structure or deposit size. Some lenders pre-approve plasterers quickly using bank statements, while others require full tax returns and BAS lodgements. Knowing which lenders will work with your documentation upfront saves weeks during the comparison process.
What plasterers miss when comparing on rate alone
A low rate doesn't help if the lender won't accept your income or requires a larger deposit than you have. We regularly see plasterers chasing the lowest advertised rate, only to find that lender requires two years of consistent PAYG income or won't accept ABN holders with less than three years of trading history.
A lender that accepts 12 months of ABN trading history and uses your gross invoiced income will often get you into a property faster and at a higher borrowing capacity than a lender offering a rate 0.2% lower but requiring two full years of tax returns showing stable profit. The loan that gets you into the property is more useful than the loan with the lowest rate that you can't access.
Call one of our team or book an appointment at a time that works for you. We'll show you which lenders actually suit your income structure and deposit, and compare the loan features that make a difference to your repayments and flexibility.
Frequently Asked Questions
How do lenders assess a plasterer's income for a home loan?
Lenders assess plasterer income using tax returns, business activity statements, or bank statements showing invoices and deposits. Some lenders average two years of taxable income, while others use gross income from your BAS, which can significantly affect your borrowing capacity.
Should a plasterer choose a variable or fixed home loan rate?
Variable rates suit plasterers with fluctuating income who want to make extra repayments when work is steady. Fixed rates provide certainty but usually limit extra repayments, making them suitable if you don't expect lump sum payments during the fixed period.
What is an offset account and how does it help plasterers?
An offset account is a transaction account linked to your home loan where every dollar held reduces the balance you pay interest on. For plasterers holding funds for tax, GST, or materials, an offset means that money saves you interest while remaining accessible.
What is loan to value ratio and why does it matter?
Loan to value ratio is the amount you borrow divided by the property value. Borrowing 80% or less avoids Lenders Mortgage Insurance, while borrowing above 80% triggers LMI, which can add thousands in upfront costs.
Why is the comparison rate more important than the advertised rate?
The comparison rate includes most fees and charges, giving you a more accurate picture of the loan's true cost. A loan with a low advertised rate might have a higher comparison rate once fees are factored in, making it more expensive overall.
