Self-employed home loans in NZ: income, records and borrowing

If you work for yourself, banks apply the same tests as for employees (serviceability at a test rate, the debt-to-income rule and the deposit rules), but you prove your income differently. Instead of payslips, BNZ asks for your business’s last two annual financial statements and IR3 returns, and ANZ asks for your financial statements, “preferably through your accountant” (both accessed 10 November 2026). How each bank turns those records into an income figure is not something the banks we read publish. That figure matters: in our example, a business owner whose income is assessed at $90,000 rather than $110,000 could borrow about $530,000 rather than $650,000. Banks decide; this is general information, not financial advice.

The same three limits apply

A self-employed borrower faces the same three limits as anyone else, and the lowest one sets the answer:

• Serviceability: after tax and living costs, could you afford the loan at the bank’s test rate? The five banks’ test rates, confirmed July 2026, are ANZ 6.85%, ASB 6.85%, BNZ 7.10%, Kiwibank 6.95% and Westpac 6.95%.
• Debt-to-income: most owner-occupier lending must keep total debt at or below 6 times gross income before tax (Kiwibank; Reserve Bank settings unchanged at the August 2026 review).
• Deposit (LVR): most owner-occupier lending needs a 20% deposit, with up to 25% of new lending allowed above 80% LVR since 1 December 2025.

What differs is the evidence for income. An employee’s salary is on a payslip and an employment contract. A business owner’s income depends on the year, and banks want to see it over time. Our guide to how banks assess your application covers the general process, and the DTI guide explains why income before tax matters so much.

The records banks ask for

These are the self-employed requirements on the bank pages we read on 10 November 2026, alphabetically. Each describes only that bank’s own requirement, so each is a single source. Westpac’s page blocked our access.

On top of business records, expect the documents every applicant provides: identity, about three months of statements for accounts held at other banks (ANZ and BNZ both ask for this), statements for existing loans and cards, and evidence of your deposit and savings.

Practical points from these requirements:

• Two years of history. BNZ’s wording implies you need at least two completed financial years. If your business is newer, ask the bank or an adviser before you apply.
• Accountant-prepared accounts. ANZ prefers statements through your accountant. Having them finalised promptly after year end helps.
• Tax up to date. BNZ asks for IR3 returns, so returns need to be filed.
• Keep business and personal accounts separate. Banks read your statements to check spending; mixed accounts make that harder.

Which income figure does the bank use?

This is the question that matters most, and the honest answer is that the banks we read do not publish their method. A bank might look at the latest year, the average of two years, or the lower of the two, and it may adjust for items in the accounts. Calculate.co.nz says overtime, bonus and rental income are often discounted by 20% to 30%, which shows banks do shade income they see as less certain, but that is one secondary source (UNVERIFIED) and does not cover business income specifically.

For DTI, Kiwibank defines income as total annual income before tax, including salary, rental and other income. For a business owner, ask the bank exactly which line of your accounts or tax return it treats as that income. Turnover is not income; profit is closer to it.

Because we cannot source a bank method, our calculator lets you enter the income figure yourself. If your income moves around, try it at the lower year as well as the average, so you see the range.

Worked example: income assessed three ways

Take a sole trader whose income before tax was $90,000 one year and $110,000 the next (an average of $100,000). We do not know which figure a given bank would use, so we show all three. Take-home pay is approximated with the 2026/27 income tax and ACC rates our PAYE engine uses, as a stand-in for a self-employed person’s tax, with no KiwiSaver. Living costs are $2,000 a month, card limits $10,000, the deposit $200,000, and we test at the 6.94% average test rate over 30 years.

DTI binds in every row: 6 times income, less the $10,000 card limits. So every $10,000 of assessed income moves the answer by $60,000. The gap between the lower year and the latest year is $120,000 of borrowing on the same business. The deposit limit ($800,000 at 80%) does not bind.

Two cautions. First, the take-home figures are approximations: a self-employed person pays income tax through their return and provisional tax, and ACC levies differently from an employee, so enter your own figure in the calculator. Second, the living costs are this person’s own figure, above our $1,600 floor for one adult (our assumption, not a bank figure); banks use their own benchmarks.

Income needed for a target loan

Because DTI often binds, it can help to work backwards. Under the 6 times rule, the income a bank needs to see is (loan + other debts and card limits) divided by 6. With $10,000 of card limits:

Compare that with the figure the bank is likely to accept from your accounts, not your best year. Serviceability must also pass at the test rate, and the deposit rules still apply.

Improving your position

• Get your accounts finished. Two completed, accountant-prepared years with filed IR3 returns is the evidence BNZ lists.
• Talk to your accountant early. How income is reported affects the figure a bank sees. Your accountant can explain the trade-offs between tax and borrowing for your business.
• Cut card limits. Business owners often hold high limits. For DTI, Kiwibank counts the full limit; see credit cards and borrowing.
• Get pre-approval first. It shows how a bank reads your accounts before you make an offer; see pre-approval.
• Compare lenders. Banks do not publish how they read business accounts and may read the same accounts differently, so it may pay to ask more than one, directly or through an adviser. Our advisers vs banks guide compares the two routes neutrally.

If part of your income is rent, see our rental income guide for how banks discount it. Rates as at 10 November 2026; test rates confirmed July 2026.

Questions people ask

Can I get a home loan if I am self-employed in NZ?

Yes. Banks apply the same tests as for employees, but ask for business records. BNZ asks for your business’s last two annual financial statements and IR3 returns; ANZ asks for financial statements, preferably through your accountant.

How many years of accounts do I need?

BNZ’s pages ask for the last two annual financial statements. Other banks may differ; ask before you apply, especially if your business is newer.

Do banks average self-employed income?

The banks we read do not publish how they turn your accounts into an income figure. Ask your bank, and test your borrowing at your lower year as well as your average.

Is it harder to borrow when self-employed?

The rules are the same, but the income evidence is more involved and a bank may use a more cautious figure. In our example, using $90,000 instead of $110,000 cut borrowing from $650,000 to $530,000. Banks decide.

What if I have a salary and a side business?

Expect to provide both kinds of evidence: payslips or an employment contract for the salary, and financial statements for the business (BNZ lists both kinds of document). How much of the business income a bank counts is its own decision, so ask before you apply.