If you're self-employed and can't produce two years of tax returns, you've likely been told you need a "low doc" or "alt doc" loan. But what's the actual difference — and which one is right for your situation? This guide cuts through the confusion with a clear, practical comparison.
20%+
Typical minimum deposit
12 mo
Income evidence needed
30+
Lenders assessed
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Broker assessment
What Is a Low Doc Home Loan?
A low doc home loan ("low documentation") lets self-employed borrowers prove their income without providing full tax returns. Instead, lenders accept a streamlined set of documents — typically one or two of the following:
- 12 months of BAS (Business Activity Statements) — showing consistent GST-registered turnover
- An accountant's declaration — a signed letter from your registered accountant confirming your annual income
- 6–12 months of business bank statements — demonstrating regular income deposits consistent with your stated income
Low doc loans typically carry a slightly higher interest rate than full doc products (0.3%–0.8% in 2026) and require a minimum 20% deposit. They originated in the early 2000s to serve the growing self-employed workforce that genuine banks were systematically excluding. Today, most major non-bank lenders and several second-tier banks offer competitive low doc products. For a detailed breakdown of specific low doc options, see our complete low doc guide for business owners.
What Is an Alt Doc Home Loan?
An alt doc home loan ("alternative documentation") is a broader category that covers any home loan where income is verified through non-standard evidence — not just the simplified BAS/accountant's letter approach of low doc, but any alternative to tax returns.
Alt doc evidence can include:
- Business bank statements (6–12 months)
- Signed client contracts or invoices — particularly useful for contractors with ongoing retainers
- Rental income statements — for investors with significant rental income
- Foreign income documentation — for borrowers with overseas income sources
- Accountant's letter combined with other evidence
- ATO portal income summary (available through myGov)
In practice, many lenders use "low doc" and "alt doc" interchangeably — but the key distinction is that alt doc is typically more flexible about the type of evidence accepted, while low doc products have a more defined set of acceptable documents. This is an important nuance worth discussing with your broker if your income situation is complex — particularly if you're a self-employed business owner with mixed income sources.
Low Doc vs Alt Doc: Side-by-Side Comparison
| Feature | Low Doc | Alt Doc |
|---|---|---|
| Income evidence | BAS, accountant's letter | BAS, bank statements, contracts, invoices |
| Min. deposit (LVR) | 20% (80% LVR) | 20–30% (70–80% LVR) |
| Interest rate premium | +0.3%–0.6% | +0.4%–0.8% |
| Best for | GST-registered, 12+ months BAS | Complex/mixed income, contractors |
| Self-declaration? | Yes (most lenders) | Varies by lender |
| ABN required | Yes (12+ months) | Usually (some exceptions) |
| Lender availability | Non-bank + some second-tier banks | Primarily non-bank lenders |
| Refinance to full doc? | Yes (after 2 tax returns) | Yes (after 2 tax returns) |
Important: Both Are Stepping Stones, Not Permanent Solutions
Low doc and alt doc rates are higher than full doc — but this isn't your forever rate. Most self-employed borrowers refinance to a full doc product once they have 2 years of clean tax returns. Use the loan comparison calculator to model the cost difference and decide when it makes sense to refinance.
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Which Lenders Offer Low Doc and Alt Doc in 2026?
The lender landscape for low doc and alt doc products has changed significantly. Post-Royal Commission policy tightening pushed many banks out of this space — but non-bank lenders have stepped in with increasingly competitive products.
- Pepper Money: One of Australia's most active low doc lenders. Accepts BAS, bank statements, and accountant's letters. Goes to 80% LVR on low doc. Good for borrowers with 12+ months of clean BAS.
- Liberty Financial: Flexible alt doc product accepting contracts and invoices alongside BAS. Particularly good for contractors. Can go to 80% LVR with strong evidence.
- La Trobe Financial: Comprehensive alt doc product. Manual assessment process allows for nuanced income situations. Good for borrowers with mixed rental and business income.
- Resimac: Competitive low doc rates. Requires 12 months of BAS and/or accountant's declaration. Strong option for GST-registered businesses with consistent turnover.
- NAB (via broker channel): One of the few major banks still offering a low doc product. Stricter criteria than non-banks but can offer full bank-level rates when criteria are met.
For self-employed borrowers exploring the full range of income verification options, our self-employed home loan guide for Sydney 2026 covers the complete picture including full doc, add-backs, and specialist lender options side by side.
Find out which product is right for your situation
Get the complete step-by-step application process, common mistakes to avoid, and a full FAQ — specific to low doc and alt doc applicants.
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Which Is Right for Your Situation?
Here's the practical guide to choosing between low doc and alt doc based on the most common self-employed scenarios:
Use Low Doc If…
- ✓ Your ABN is 12+ months old
- ✓ You're GST-registered with clean BAS
- ✓ Your income is primarily from one business
- ✓ You have a 20–30% deposit
- ✓ Your accountant can sign an income declaration
Use Alt Doc If…
- ✓ You have mixed income sources
- ✓ You're a contractor with client contracts
- ✓ Your income includes rental and business
- ✓ You have overseas income components
- ✓ Your accountant won't sign a declaration
Step-by-Step: Applying for a Low Doc or Alt Doc Loan
- Gather your income evidence — before approaching any lender. Pull together 12 months of BAS statements, your last 12 months of business bank statements, and contact your accountant about an income declaration. Having these ready upfront speeds up the process significantly.
- Check your credit file. Low doc and alt doc lenders still run credit checks. Defaults, missed payments, or a cluster of recent enquiries can change your lender options and rate. Fix what you can before applying.
- Calculate your deposit position. You'll need at least 20% of the purchase price plus stamp duty and costs. If you're under 20%, explore whether you qualify for LMI waiver products based on your profession before defaulting to a low doc product with LMI on top.
- Engage a specialist self-employed broker. Low doc and alt doc products vary enormously between lenders — in rate, LVR, acceptable documents, and credit policy. A broker who specialises in self-employed clients will identify which lender's product gives you the best outcome for your income structure, without leaving a trail of credit enquiries.
- Let your broker run lender pre-qualification. Before any formal application, a good broker pre-qualifies your income evidence with their preferred lenders to confirm what you can borrow and at what rate. This step protects your credit file and avoids wasted time.
- Submit one complete application. Once the right lender is confirmed, your broker submits a full application with all income documents, bank statements, identification, and any supporting letters. Completeness at submission significantly reduces the chance of requests for more information — which delays settlement.
- Plan your refinance timeline. While on your low doc or alt doc product, lodge your tax returns for the next two years. Once you have two years of lodged returns, your broker will reassess your ability to refinance to a full doc self-employed product at a lower rate.
Common Mistakes to Avoid
- Underestimating your income in BAS statements. Some self-employed borrowers keep BAS turnover low for tax purposes — but lenders calculate income from BAS figures. If your BAS understates your real income, your borrowing capacity on a low doc product will be lower than your true financial position warrants.
- Applying directly to a non-bank lender without broker guidance. Non-bank lenders don't all have the same products. A broker who works with multiple non-bank lenders can negotiate pricing and match your documents to the lender most likely to approve them quickly.
- Assuming low doc = higher rate forever. Many borrowers stay on low doc products for years after they could have refinanced to a full doc rate. Set a calendar reminder 18 months after settlement to reassess — by then you may have 1–2 years of tax returns and could be eligible for a rate reduction of 0.5%+ by switching.
- Not asking about alt doc flexibility upfront. If your BAS statements show low turnover (perhaps you invoice quarterly, not monthly), ask your broker whether an alt doc product using bank statements or invoices might show higher income. The difference can be meaningful.
- Forgetting the 20% deposit requirement. Many self-employed borrowers focus on income evidence and forget they also need a minimum 20% deposit for most low doc products. If you're under 20%, solve the deposit problem first — through savings, gifted funds, or a family guarantee.
Frequently Asked Questions
Low doc loans use a simplified set of documents — BAS statements or an accountant's declaration — instead of full tax returns. Alt doc is a broader category that accepts a wider range of non-standard income evidence including contracts, invoices, rental statements, and foreign income documentation. In practice, many lenders use both terms for similar products, but alt doc tends to be more flexible about what evidence is acceptable.
Generally yes — most low doc and alt doc lenders require a minimum 20% deposit (80% LVR). Some specialist lenders will go to 85% LVR with strong supporting documents, but anything above 80% typically requires LMI on top of the already-higher rate. A 20–30% deposit gives you access to the most competitive low doc pricing available.
Low doc rates have improved significantly. In 2026, the best low doc rates from non-bank lenders are typically 0.3%–0.8% above equivalent full doc rates — far less than the 1.5%–2% premium that existed a decade ago. The exact rate depends on your LVR, income evidence strength, and lender. A specialist broker can secure competitive pricing that makes the product viable as a stepping stone to full doc.
Alt doc lenders accept a range of non-standard income evidence: 12 months of business bank statements, 12 months of BAS statements, a signed accountant's letter, client contracts or invoices (for contractors), rental statements (for investors), and sometimes a combination of these. Exact requirements vary by lender and are assessed case by case — your broker will confirm exactly what each lender needs before submission.
Neither is universally better — the right product depends entirely on your income structure and available evidence. If you have 12 months of clean BAS and GST registration, a low doc product using BAS evidence is usually the simplest path. If your income is more complex (mixed business, rental, contracting), an alt doc product accepting broader evidence may deliver a higher assessable income figure and better borrowing power. A specialist broker will assess both options and show you the numbers side by side.
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