You’ve been practising at the Bar for a couple of years, your income is growing, and now you’re starting to think seriously about buying your first home. But when it comes to obtaining a home loan, things aren’t as straight forward as they were when you were a PAYG employee working as a solicitor. As a sole trader with a relatively short earning history and variable income, you may face more hurdles than you would have expected when dealing with lenders.

The Self-Employed Challenge

For self-employed professionals—such as Readers at the Bar—obtaining finance for your first home can be more complex than for salaried employees. The primary concern for lenders is the uncertainty and variability of income. Unlike those on a fixed wage, early-career barristers often experience fluctuations in monthly earnings, irregular cash flow, and limited financial history, all of which increase perceived risk from a lending perspective.

Uncertain or irregular income

Lenders rely heavily on proof of stable, ongoing income to assess an applicant’s capacity to repay a loan. For self-employed borrowers, inconsistent or unpredictable income patterns may raise red flags, even if overall earnings are strong. It's necessary to demonstrate consistent income over time.

Standard income requirement

Most lenders require at least two full years of business and personal tax returns, along with Notices of Assessment, to calculate average taxable income. This longer lookback period helps lenders assess the sustainability of your income over time.

Case-by-case assessment

Some lenders offer more flexible assessment criteria—particularly for professionals such as barristers—if strong evidence can be provided. If your income is trending upward and your business is well-established, certain lenders may consider applications with only one year of financials. In such cases, supplementary documentation—such as a letter from your accountant or BAS statements—may help strengthen your position.

Satisfying Income Requirements

Given the difficulties inherent in proving income as a sole trader, engaging an accountant early is essential. A well-prepared set of financials—supported by clear tax documentation and a professional letter attesting to the viability of your practice—can make a significant difference in satisfying lender requirements and improving your chances of approval.

What lenders want to see:

• Tax returns
• Notices of Assessment
• Business Activity Statements (BAS)
• Business bank statements
• Accountants’ letter confirming income and viability

If you would like to determine how much you can borrow or need help getting a loan, reach out to us today for a complimentary call with one of our brokers and accountants who specialise in working with Readers and Barristers. We have been helping early-career barristers obtain a home loan for over 25 years. At Causbrooks Finance, we're with you every step of the way throughout the home loan application process.

First Home Buyer Basics

Purchasing your first home is a significant milestone, and while the process can feel complex, we will walk you through the steps required to get a home loan. Understanding these steps from the outset will help you plan more effectively and engage with the process with greater confidence as a self emplpoyed borrow.

Saving a Deposit

Most lenders require a deposit of at least 10–20% of the property’s value. The larger your deposit, the greater your borrowing power and the lower your Loan-to-Value Ratio (LVR), which can reduce or eliminate the need for Lenders Mortgage Insurance (LMI). Lenders Mortgage Insurance is an additional ongoing fee you have to pay until you reach the threshold Loan-to-Value Ratio.

Applying for Finance

Once you have a deposit saved, the next step is obtaining loan pre-approval. This involves submitting detailed financial documentation to a lender or broker. For self-employed applicants, this typically includes two years of tax returns, financial statements, and an accountant’s letter. Pre-approval gives you a clear understanding of your borrowing capacity.

Finding a Property

With pre-approval in place, you can begin searching for a property within your budget. It’s a good idea to engage a solicitor or conveyancer early in this process to assist with contract reviews and due diligence.

Exchange and Settlement

Once you’ve found a property and your offer has been accepted, contracts are exchanged, and your solicitor or conveyancer will guide you through the settlement process. This includes finalising your loan, transferring ownership, and paying any applicable duties and fees. Settlement generally occurs 4–6 weeks after exchange.

How Much Can I Borrow?

Your borrowing capacity is primarily determined by your income, expenses, and overall financial position. For salaried employees, this is usually a straightforward calculation. However, for sole traders—such as barristers at the start of their careers—the assessment becomes more complex due to the variability of income and the need for supporting documentation.

Lenders generally calculate borrowing capacity based on your taxable income, averaged over the past two financial years. This helps them assess whether your income is stable and sufficient to service a loan over time. If your income is inconsistent or shows significant year-on-year variation, this can reduce the amount you're eligible to borrow—even if your most recent year was particularly strong.

In some cases, where income is clearly trending upward and supported by solid documentation, a lender may be willing to consider only the most recent year’s income. However, this is assessed on a case-by-case basis and typically requires strong supporting evidence, such as an accountant’s letter and business bank statements.

How Much Deposit Do I Need?

The deposit is one of the most important components of your home purchase. As a general rule, most lenders require a deposit of at least 10–20% of the property’s purchase price. However, the amount you contribute upfront can significantly influence the overall cost and structure of your loan.

A 20% deposit is often considered the benchmark. Reaching this threshold allows you to avoid Lenders Mortgage Insurance (LMI)—a premium that protects the lender (not you) in the event you default on the loan. LMI can run into the thousands or even tens of thousands of dollars depending on the property value and loan size, so avoiding it can represent substantial savings.

If you have less than a 20% deposit, it is still possible to secure a loan, but LMI will generally apply unless you qualify for a government scheme such as the First Home Guarantee, which allows eligible buyers to purchase a property with as little as 5% deposit, without paying LMI.

Alternatively, a guarantor—typically a close family member—can offer a portion of their own property’s equity as security for your loan. This can reduce or eliminate the need for LMI and help you get into the property market sooner, but it’s a significant legal and financial commitment for all parties involved and should be entered into with care.

Ultimately, the size of your deposit will affect your borrowing power, your monthly repayments, and your overall financial flexibility—so it’s worth considering your options early and planning ahead.

Government Incentives

Government Incentives for First Home Buyers

As a first home buyer, you may be eligible for a range of government incentives designed to make entering the property market more accessible. These schemes can significantly reduce the upfront costs of buying a home, especially if you're early in your career and still building savings.

First Home Owner Grant (FHOG)

The FHOG is a one-off, tax-free payment available to eligible first home buyers who are purchasing or building a new home. In New South Wales, the grant is currently $10,000 for new homes valued up to $600,000, or for house-and-land packages up to $750,000. This can be a helpful boost toward your deposit or upfront costs like legal fees and moving expenses.

First Home Buyer Assistance Scheme

This scheme provides stamp duty exemptions or concessions for eligible first home buyers in NSW. For newly built or existing homes, full exemptions are available for properties valued up to $800,000, with concessional rates for homes valued up to $1 million. For vacant land intended for building a new home, full exemption applies up to $350,000, with concessions up to $450,000. This can represent tens of thousands of dollars in savings.

First Home Guarantee (formerly First Home Loan Deposit Scheme)

Under this federal program, eligible first home buyers can purchase a home with as little as 5% deposit, without paying Lenders Mortgage Insurance (LMI). The government guarantees the remaining amount up to 20%, effectively removing one of the biggest barriers to home ownership. There are annual caps on the number of places available and income/price thresholds apply, so early planning and eligibility checks are essential.

Loan Mechanics 101: How Loans Work

Understanding the structure and mechanics of a home loan is essential before entering into one of the most significant financial commitments of your life. Below are the core concepts that will help you make informed decisions when comparing loan options and speaking with lenders or brokers.

Principal and Interest vs Interest-Only

Most home loans fall into one of two repayment types. With a principal and interest loan, each repayment reduces both the amount you've borrowed (the principal) and the interest charged on it. Over time, this structure reduces your loan balance and builds equity in the property.

In contrast, interest-only loans require you to pay only the interest for a set period (typically 1 to 5 years), after which the loan reverts to principal and interest repayments. While this can reduce your monthly outgoings in the short term—useful during the early stages of practice—it results in higher total interest over the life of the loan and can delay wealth accumulation through equity.

Variable vs Fixed Interest Rates

A variable rate loan moves in line with the lender’s changes to interest rates (often influenced by the RBA cash rate). This can offer flexibility, including access to features like offset accounts and extra repayments, but also comes with the risk of rising repayments.

A fixed rate loan, on the other hand, locks in your interest rate for a defined term (usually 1 to 5 years). This provides certainty and shields you from rate rises but often limits flexibility—such as restricting additional repayments or access to redraw facilities.

Offset Accounts and Redraw Facilities

Both features can help reduce interest and improve cash flow management. An offset account is a transaction account linked to your loan—any funds in this account are "offset" daily against your loan balance, reducing the interest charged.

A redraw facility allows you to access any additional repayments you've made on your loan. This can be a useful tool for managing cash flow, but conditions may apply—especially on fixed-rate loans.

Pre-Approval and How Long It Lasts

Before committing to a property, you can apply for loan pre-approval, which gives you a conditional indication of how much a lender is willing to let you borrow. Pre-approval is usually valid for up to 90 days and can help guide your property search by setting clear boundaries. However, it’s not a guarantee—final approval is subject to further checks, including a valuation of the property and updated financial documents.

Additional Costs to Budget For

• Stamp duty (unless exempt)
• Legal/conveyancing fees
• Building and pest inspections
• LMI (if applicable)
• Ongoing loan fees
• Moving costs and setup

Timing and Planning Ahead

Buying a home early in your legal career is absolutely achievable with the right preparation. By understanding how lenders assess self-employed borrowers, staying on top of your financials, and working closely with your accountant and a mortgage broker who understands the your financial situation, you’ll be in the best position to secure finance confidently. 

Sydney-Based Tax Accountants for Barristers

Working with us means you have the support to manage your taxes and accounting, freeing you up to focus on your business. From setting up a business bank account to understanding super obligations, we're here to ensure your business is prepared for tax time. If you're currently lodging your own tax return, speak to us today about the advantages of lodging via a registered tax agent, such as deferring when you pay tax. To learn more information, check out our Tax Return for Barristers page.

Working with us means you have the support to manage your taxes and accounting, freeing you up to focus on your business. From setting up a business bank account to understanding super obligations, we're here to ensure your business is prepared for tax time.

If you're currently lodging your own tax return, speak to us today about the advantages of lodging via a registered tax agent, such as deferring when you pay tax. To learn more, have a look at our Tax Return for Barristers page.