Finance for Tradies

Most tradies earn good money. The problem is not the income. The problem is how banks read it on paper.

A sparky pulling $120,000 a year across base pay, overtime and site allowances does not get assessed the same way as an office worker on a $120,000 salary. Banks split tradie income into components and then shade the parts they consider variable. Overtime might be counted at 80 per cent. Allowances might be excluded entirely. The result is a borrowing figure based on income you do not actually earn, while the income you do earn gets left on the table.

That gap between what you take home and what a lender will count is the single biggest issue tradies face when applying for finance. Getting it right is not about finding a lender who will "give you a go." It is about knowing which lender's policy matches how you are actually paid.

The mortgage brokers at Tradie Home Loans deal with this every day. We know which lenders count what, how they want it presented, and where the gaps are between what you earn and what a bank will recognise. If you are not sure where you stand, get in touch and that is the conversation to start with.

PAYG Tradies: Overtime and Allowances

If you are on the tools as a PAYG employee, your base hourly rate or salary is the easy part. The complication starts with everything on top of it.

Most major banks assess overtime and allowances at around 80 per cent of the accepted amount. ANZ, for example, uses 80 per cent of the three-month average for overtime and commission income. CBA and NAB apply similar shading under their general income policies. In practical terms, $35,000 of overtime becomes $28,000 on the lender's calculator. That is a $7,000 reduction in assessed income that directly shrinks your borrowing capacity.

Westpac, St George, Bank of Melbourne and BankSA operate a different policy for trade occupations. Under the Westpac Group's PAYG Plus policy, eligible core building and essential trade professionals can have 100 per cent of their overtime and allowances assessed as income rather than the standard 80 per cent.

The eligible trade occupations under this policy are aircraft maintenance engineers, airconditioning and refrigeration mechanics, automotive electricians, cabinet and furniture makers, carpenters and joiners, electrical distribution trades workers, electricians, glaziers, metal fitters and machinists, motor mechanics, panel beaters, plumbers, surveyors and spatial scientists, and vehicle painters.

This is not an LMI waiver. It is an income assessment concession. A plumber or sparky on $85,000 base plus $35,000 in overtime and allowances would have $120,000 assessed under this policy compared to $113,000 under a standard 80 per cent shading policy. On a 30-year loan at current rates, that difference in assessed income can shift borrowing capacity by tens of thousands of dollars.

The eligibility conditions are that you must be a PAYG or casual employee with income evidence from the same employer for a minimum of six months. Self-employed contractors are assessed under separate self-employed income rules. Where the six-month requirement is not met, applications may still be referred for consideration.

If your occupation is on that list and you have not had your overtime and allowances assessed under this policy, there is a good chance you have been undersold on your borrowing capacity. The brokers at Tradie Home Loans can check whether you qualify and run the numbers with the right lender. You can also read more about how LMI waivers for tradies work alongside income concessions.

Self-Employed and Sole Trader Tradies

If you run your own show, whether as a sole trader, through a company, or via a trust, banks do not look at your turnover. They look at the profit after business expenses, sometimes averaged over two years, sometimes based on the most recent completed year.

The method varies by lender, and the difference is not small.

CBA allows eligible self-employed customers who have been trading for a minimum of two years, with an LVR of 80 per cent or less and a maximum of $3 million in total CommBank lending, to have their loan assessed using their most recent financial year information. Servicing is assessed at 90 per cent of the eligible self-employed income and applies to personal applicants only.

Westpac and St George offer a Fast Track method for self-employed borrowers who provide their two most recent individual ATO Notices of Assessment, for borrowing up to 80 per cent LVR. For non-Fast Track applications, one year assessment or the most recent year income may be accepted for eligible applicants.

Suncorp offers a basic verification option where self-employed income can be assessed using two years of ATO Notices of Assessment and a signed income declaration. This requires borrowing as an individual, LVR of 80 per cent or less, business trading for two or more years, and a maximum income decrease of 20 per cent or less compared to the prior year.

Here is what that actually means in practice. A carpenter whose business earned $95,000 in year one and $140,000 in year two could be assessed at $140,000 by one lender, $117,500 (the average) by another, or $95,000 (the lower year) by a third. Same tradie, same tax returns, three different borrowing outcomes.

Picking the wrong lender when you are self-employed can cost you the property. The mortgage brokers at Tradie Home Loans compare how each lender on the panel treats your specific business structure and figures before we submit anywhere. That way you are not finding out the hard way that the bank averaged your income down. If you are self-employed, our self-employed loans page covers more on how different lender policies apply to your setup.

The Tax Deduction Trap

This is the one that catches a lot of self-employed tradies off guard.

The instant asset write-off on your ute, the fuel, the tools, the phone, the insurance: every deduction that brings your tax bill down also brings your assessed income down. A tradie grossing $180,000 who writes off $50,000 in legitimate expenses shows $130,000 in taxable income. That is the number the bank starts with.

It is worth understanding how depreciation and loan repayments on vehicles and equipment sit in this picture. Depreciation is a paper expense that some lenders may add back within their rules. The actual loan repayment on the vehicle is a real ongoing commitment that still reduces borrowing power regardless of any depreciation adjustment. Running costs like fuel, registration and repairs are genuine expenses that do not disappear because the vehicle earns income. If you are financing a work vehicle, our car loans for tradies page explains how different loan structures can affect your tax and borrowing position differently.

Getting your tax position and your borrowing position to work at the same time is the conversation to have before you lodge your next return, not after. If you are planning to buy in the next 12 months and your accountant is about to lodge, talk to the brokers at Tradie Home Loans first so you understand how the numbers on that return will flow through to your borrowing capacity.

Low Doc Pathways

Not every tradie has two years of tax returns ready to go. If your returns are not up to date or your accountant is still working through them, some lenders will accept 12 months of BAS statements or business bank statements as alternative income verification.

These are full verification products using different documents, not "easy approval" loans. The lender still checks whether the income supports the repayments. The documents are just presented in a different format.

Since early 2025, the major banks have largely moved away from accepting accountant's declarations as standalone income evidence. This pathway is now primarily available through specialist and non-bank lenders. Low doc products generally require a larger deposit and may carry a higher interest rate to offset the lender's reduced documentation. Our low doc loans for tradies page covers the current lender landscape and what documents are accepted.

If you are unsure whether you need a low doc product or whether your existing documents are enough for a standard application, the Tradie Home Loans team can review what you have and tell you which pathway applies. In many cases, tradies assume they need low doc when a standard lender can actually work with what is already lodged.

Deposit and LMI

Most lenders require between 5 per cent and 20 per cent of the purchase price as a deposit. If your deposit is below 20 per cent, Lenders Mortgage Insurance generally applies. Our low deposit loans page covers the options in more detail.

The Australian Government's Home Guarantee Scheme allows eligible buyers to purchase with as little as 5 per cent deposit without paying LMI. Since October 2025, the scheme has no income caps, no waitlists, and unlimited places. Eligibility is not restricted by occupation, so tradies can access the scheme on the same basis as any other buyer. The 5 per cent deposit scheme page has the full eligibility detail.

Separately, where a tradie independently qualifies under a professional LMI waiver category (for example, as an eligible healthcare or emergency services worker), that waiver can be combined with the Westpac Group PAYG Plus overtime and allowances concession. The two are not mutually exclusive. More detail on how this works is on our LMI waivers for tradies page. For tradies who need family help with the deposit, guarantor loans are another pathway worth understanding.

If you are not sure how much deposit you need or whether you are eligible for any concessions, request a call back and we will map out exactly where you sit based on your savings, your income structure and the property you are looking at.

Construction Loans

If you are building rather than buying, the loan structure changes. Funds are released in stages as the build progresses, with interest charged only on the amount drawn down at each stage. Your repayments start smaller and increase as each progress payment is made.

Lenders require a fixed-price building contract from a licensed builder, council-approved plans, and builder's warranty insurance before they approve the loan. Owner-builder arrangements are excluded by most major lenders. Builders who are also the borrower face additional lender scrutiny, and the panel of lenders willing to consider this is smaller. Our construction loans for tradies page covers how progress payments work and what documentation is needed at each stage. If you are looking at a house and land package, the loan structure can differ again.

For tradies who are also builders or who plan to do some of the work themselves, there are specific lenders who may factor that in. The Tradie Home Loans team can check which lender's construction policy fits your situation and walk you through the progress payment process before you break ground.

Refinancing

If you already have a home loan or investment loan, it is worth checking whether you are still on the right deal. Home loan refinancing can reduce your rate, free up cash flow, or give you access to equity sitting in your property. If you have not compared your loan in a couple of years, run a quick check using our loan health check tool.

Refinancing is not only about chasing a lower rate. It can also mean restructuring your loan to suit where you are now, whether that is accessing equity for a renovation, consolidating debt into one repayment, or getting a lower interest rate after your fixed term expires. If your fixed rate is coming up, our fixed rate expiry tool can show you what is ahead.

If you are thinking about refinancing but not sure whether it is worth the move, book an appointment and we will compare your current deal against what is available now and give you a straight answer.

Investment Property

Building wealth through property is a goal for a lot of tradies. Whether you are buying your first investment property or looking at expanding your portfolio, the way your investment loan is structured matters. Interest-only repayments, offset accounts, and the right loan-to-value ratio all affect your cash flow and your tax position.

Lenders assess investment loan applications differently to owner-occupier loans, particularly when you are self-employed. Some tradies are also exploring rentvesting as a way to get into the property market while continuing to rent where they want to live. Others are looking at debt recycling to convert non-deductible debt into deductible debt over time.

The mortgage brokers at Tradie Home Loans help you think through the full picture, not just the rate. Get in touch and we will work through your numbers and your goals together.

What to Have Ready

For PAYG tradies: recent payslips that separate base pay, overtime and each allowance category. Your latest Tax Ready income statement or payment summary. Your employment contract or letter if you have recently changed employers. Prior-year payslips or income statements where overtime history matters.

For self-employed tradies: your latest lodged personal and business tax returns. ATO Notices of Assessment. Financial statements including profit and loss and balance sheet. Current vehicle and equipment finance statements showing balances and repayments. Recent BAS if a lender requires them.

You do not need every document sorted before making contact. The first step is a conversation with the Tradie Home Loans team to work out which lender's policy suits how you are paid and what documentation pathway applies to your situation. From there we tell you exactly what is needed, what is not, and how to put your application together so it lands properly. Request a call back or book an appointment and we will get the ball rolling.

Initial Consultation

Your finance for tradies process starts with a straightforward conversation. You tell us what you are looking to do, whether that is buying your first home, purchasing an investment property, refinancing an existing loan, or something else entirely. We talk through your goals, your current financial position, and any specific requirements you have. From there, we give you a clear picture of your borrowing capacity and the loan products available across our panel of Australian lenders. We explain interest rates, loan-to-value ratios, lenders mortgage insurance, and anything else that affects your application in plain English.

Financial Assessment

We take a close look at your income, bank statements, assets, debts, credit history, and savings. For tradies, this means reviewing how your income is structured, whether you are PAYG, operating under an ABN, or running a company or trust, and what documentation you have available such as BAS statements, tax returns, and payslips that separate overtime and allowances. We work out your borrowing capacity and identify any government schemes or concessions you may be eligible for, such as the Home Guarantee Scheme or first home buyer incentives. This step is about making sure your tradies finance application is put together correctly from the start, not patched together once a lender asks questions.

Loan Recommendation

Using your financial profile, we identify suitable loan products from across the lender panel. We match the recommendation to your situation, whether you need a fixed rate, variable rate, or features such as an offset account or redraw facility. We walk you through the loan-to-value ratio implications and the trade-offs of each option so you can make an informed decision. Finance for tradies works when you understand exactly what you are signing up for, not when someone just picks the product with the lowest headline rate.

Pre-Approval

Getting loan pre-approval locks in your budget and puts you in a stronger position when making offers on property. We organise all the required documentation, including tax returns, BAS statements, and bank statements, and submit everything to the lender on your behalf. Pre-approval means you can move quickly when the right property comes up. It also reduces the risk of missing out because your finances were not in order. For tradies, having finance pre-approved takes the guesswork out of what you can spend and stops you wasting time on properties outside your range.

Formal Application

Once you have chosen your loan product, we manage the full application process. We compile and submit all documentation to the lender, including any additional requirements such as asset verification or business financial statements. We act as the main point of contact with the lender, handling queries and keeping the process moving. For finance for tradies, having someone manage this on your behalf saves time and reduces the chance of delays caused by missing documents or unanswered lender questions.

Approval and Settlement

Once your loan is approved, we go through the final loan contract with you and make sure you understand all the conditions, including the interest rate, fees, and repayment terms. We help you set up your repayment structure and arrange any necessary insurance cover. At settlement, ownership of the property transfers to you and you get access to your new asset. We make sure everything goes through cleanly and on time.

Ongoing Support

Your relationship with Tradie Home Loans does not end at settlement. We stay available to help with loan management, refinancing, or using your property equity for future investments. Whether you are thinking about buying your next home, growing your investment portfolio, or just want to make sure your tradies finance is still working as hard as you are, we are here for the long run. Use our loan health check any time to see where your current loan sits against what is available now, or book an appointment and we will review it with you.