Key Takeaways
- Most lenders require two years of financials, but some will assess an accountant on one year where criteria are met.
- A strong prior history in the profession and an ABN registered for around two years both help.
- One year can be an advantage for a growing business, where averaging two years would drag down the figure.
- One-year policies can carry stricter conditions, so they suit specific situations rather than being a default.
Many accountants who have recently started their own practice, or whose business had a standout most recent year, run into the same wall: most lenders want two years of financials, and only one is available or only one tells the real story. With variable rates around the 6% mark and serviceability tested above that, waiting another full financial year to borrow can mean missing a purchase or paying more for longer. The good news is that some lenders will assess a self-employed accountant on a single year of financials, where the circumstances fit, which is worth understanding before assuming you have to wait.
Knowing which lenders accept one year of financials and whether your situation qualifies is something a mortgage broker for accountants can confirm quickly. This article explains the standard two-year rule, when a one-year pathway is available, the criteria involved, and when using one year actually helps.
The Standard Two-Year Rule
Before the exception, it helps to understand why two years is the norm, because that explains what a one-year lender is looking to be reassured about. The standard exists to demonstrate consistency.
Most lenders assessing self-employed income want two years of personal and business tax returns and financial statements, and they typically use the lower of the two years or an average. The reasoning is that two years shows whether your income is consistent and sustainable rather than the result of a single strong period. For an accountant who has been self-employed for some time, this is usually straightforward. The difficulty arises for those who have only recently moved into self-employment, or whose most recent year is far stronger than the year before, where the two-year requirement either cannot be met or actively understates current earnings.
When a One-Year Pathway Is Available
Some lenders will assess a self-employed accountant on a single year of financials, but they do so for particular profiles rather than across the board. Recognising whether you fit is the practical step.
The typical candidate is an established professional who has recently gone out on their own after years working in the field, where a single year of self-employed financials is backed by a strong prior history in the same line of work. A lender reasoning through this sees that your experience and earning capacity did not begin when your business did, and that you could return to employment if the business faltered, which reduces the perceived risk. The other common candidate is a growing business with a clearly stronger most recent year, where one year reflects current performance better than an average would. In both cases, the one-year assessment is still full documentation lending, using your tax return and financials, rather than a low-documentation pathway based on bank statements.
The Criteria Lenders Apply
Lenders offering a one-year assessment apply conditions, because they are working with less history than usual. Knowing these helps you judge whether the pathway is open to you.
Relevant Prior Experience
Lenders generally want to see that you have a solid background in the same field before becoming self-employed, since it shows your income is grounded in established expertise rather than a brand-new venture. An accountant who spent years employed in the profession before starting a practice fits this well.
Business Establishment
Even with one year of financials, lenders usually want your Australian Business Number (ABN) registered for around two years, and evidence that the business is genuinely trading and established. This reassures the lender that the single strong year is not an isolated event.
A Sound, Consistent Result
The year being assessed needs to show a healthy, believable profit that supports the borrowing, with clean financials a lender can rely on. Where the result is strong and well documented, a lender is more comfortable working from the single year.
When One Year Helps and When It Does Not
Using one year of financials is a tool for particular situations rather than a universal shortcut, and it is worth being clear about which applies to you. The distinction comes down to your trajectory.
For a growing accounting business, one year can materially help, because a lender that averages two years would weight a weaker earlier year against you, whereas a one-year assessment captures your current, stronger position. For an accountant recently out on their own, it can be the difference between borrowing now and waiting another full financial year. Where it does not help is a business whose most recent year is weaker than the year before, in which case a one-year assessment would work against you and a standard two-year approach, or simply waiting, may serve better. Whatever the basis, the lender still tests your ability to service the loan at the actual rate plus a buffer of 3 percentage points set by the Australian Prudential Regulation Authority (APRA), roughly 9% at current rates, so the single year still has to support the repayments comfortably.
How This Fits with the Professional Concessions
The one-year pathway and the professional concessions are separate threads that can both apply to an eligible accountant. It is worth confirming each.
Where you hold current membership of a recognised body such as CPA Australia (Certified Practising Accountant), Chartered Accountants Australia and New Zealand (CA ANZ), or the Institute of Public Accountants (IPA), you can generally access the waiver of Lenders Mortgage Insurance (LMI), which can save a premium exceeding $20,000 on a higher-loan-to-value-ratio (LVR) purchase. The waiver applies on the same basis regardless of whether you are assessed on one year or two, though lenders offering both a one-year assessment and the concession on a higher-LVR loan may apply additional conditions, so it is worth confirming how the two combine for your situation.
Frequently Asked Questions (FAQs)
Do all lenders require two years of financials?
Most do, using the lower of the two years or an average to confirm your income is consistent. However, some lenders will assess a self-employed accountant on one year of financials where the criteria are met, particularly where you have a strong prior history in the profession. It is not universal, so lender choice matters.
Who is most likely to qualify with one year?
Typically an established professional who has recently become self-employed after years in the same field, or a growing business whose most recent year clearly reflects current performance. In both cases, a strong, well-documented single year and an ABN registered for around two years strengthen the application considerably.
Is a one-year assessment the same as a low-doc loan?
No. A one-year assessment is still full documentation lending, using your actual tax return and financial statements for that year. A low-documentation loan uses alternatives such as bank statements or a Business Activity Statement where returns are not available, and often carries different terms. The two pathways suit different situations.
Will using one year reduce how much I can borrow?
It depends on your trajectory. For a growing business, one year can increase your assessed income compared with averaging two years. For a business whose recent year is weaker, it would reduce it. The lender still tests serviceability at the actual rate plus a 3 percentage point buffer, so the single year must support the repayments.
Do I still need my ABN registered for two years?
Often yes. Even where a lender accepts one year of financials, many still want your ABN registered for around two years and evidence that the business is genuinely established and trading. This reassures the lender that the single year of income is not an isolated result, so ABN tenure remains relevant.
Can I still get the LMI waiver on a one-year assessment?
Generally yes, where you hold a recognised membership such as CPA Australia, CA ANZ, or the IPA, since the waiver depends on your membership rather than how many years of financials you provide. Where you are also seeking a higher-LVR loan, the lender may apply additional conditions, so it is worth confirming how the two combine.
The Bottom Line
Accountants can sometimes get a home loan on one year of financials, but it is a pathway for particular situations rather than a general shortcut. It suits an established professional who has recently become self-employed, or a growing business whose most recent year reflects current performance better than an average would, and lenders that offer it generally want relevant prior experience, an ABN registered for around two years, and a sound, well-documented result. The professional LMI waiver still applies where you hold a recognised membership and can remove a premium exceeding $20,000 on a higher-LVR loan, but it does not change the serviceability test at the actual rate plus 3 percentage points. Confirming whether your situation fits a one-year policy, and matching it to a lender that offers one, is what can let you borrow now rather than waiting another year.