Choosing Full‑Doc, Alt‑Doc or Low‑Doc for Bronte’s Self‑Employed

If you’re self‑employed in Bronte, the cheapest and safest option is usually a full‑doc home loan when you have two years of solid tax returns; alt‑doc can work when your real income is strong but not yet showing on those returns; and true low‑doc is now niche, higher‑rate and best treated as a short‑term bridge, not a forever loan.

Here’s how to choose the right path this week, based on the documents you can actually produce.

Clarifying your documentation opens up better loan options in Bronte.

1. What full‑doc, alt‑doc and low‑doc really mean in 2026

Full‑doc home loans (what banks really want)

Full‑doc means you can show standard income evidence:

• Last 2 years’ personal tax returns and Notices of Assessment.
• Last 2 years’ business returns/financials.
• Current BAS or interim accounts in some cases.

Lenders then apply APRA’s ~3% serviceability buffer to your rate to check you can handle higher repayments.

Full‑doc usually gives you:

• Lower interest rates (mainstream pricing).
• Higher maximum LVR (often up to 80%, sometimes 90–95% with LMI).
• More lender choice and policy flexibility.

For most Bronte professionals and business owners, this is the target. Our article on self‑employed and professional borrowers in Bronte explains how to present your income so banks are comfortable.

Alt‑doc loans (when returns don’t tell the whole story)

Alt‑doc (alternative documentation) is for borrowers who can’t yet pass full‑doc, but can still prove income in other ways, typically using:

• 6–12 months’ business bank statements, and/or
• 2–4 most recent BAS, and/or
• An accountant’s income declaration.

Key points:

• Rates are higher than full‑doc but generally lower than true low‑doc.
• LVRs are often capped around 70–80%.
• Policies vary a lot between specialist lenders.

Alt‑doc can work well if your current earnings are strong but last year’s tax return was hammered by one‑off costs or COVID‑era hangovers.

Low‑doc loans (narrow, expensive, last‑resort tool)

True low‑doc is now rare. It’s usually only available through non‑bank or specialist lenders, and you may be asked for:

• A simple self‑certification of income, and
• Some form of security comfort (lower LVR, extra collateral, or guarantees).

Expect:

• Noticeably higher rates and fees.
• LVRs typically 60–70%.
• Stricter exit plans and refinance conditions.

These can still help in edge cases (very complex structures, recent business start‑up plus large equity), but should usually be treated as short‑term bridges until you can move to alt‑doc or full‑doc.

2. Quick comparison: full‑doc vs alt‑doc vs low‑doc in Bronte

*Illustrative only — actual rates vary by lender, product and your profile.

For Bronte’s high‑value properties, the LVR caps matter: pushing to 80% on a $2.5m home means a $500k deposit plus costs. On a low‑doc 65% cap, you’d need closer to $875k plus costs.

3. Worked example: same Bronte borrower, three documentation paths

Assume you’re buying a $2.4m Bronte townhouse with $720k cash (30% deposit + costs), so you need a $1.68m loan. Let’s compare indicative outcomes.

Scenario A – Full‑doc (best case)

• You have two clean years of returns showing $350k taxable income.
• You qualify full‑doc with a major or second‑tier bank.
• Indicative rate: say 6.0% p.a. P&I (example only).

Monthly repayment (30‑year term):

• Roughly $10,077 per month.

You benefit from:

• Mainstream pricing.
• Stronger refinance options later.
• Easier product flexibility (offset, package discounts, etc.).

Scenario B – Alt‑doc (current income higher than lodged)

• Last lodged return only shows $220k due to write‑offs.
• Your last 12 months’ BAS and business statements indicate $360k sustainable income.
• You go to a specialist alt‑doc lender.
• Indicative rate: say 6.7% p.a. P&I.

Monthly repayment (30‑year term):

• Roughly $10,885 per month — about $808 more per month than full‑doc.

The trade‑off:

• You borrow what you actually need now, but pay a premium.
• Strong incentive to clean up your tax returns so you can refinance to full‑doc in 1–2 years.

Scenario C – Low‑doc (very limited paperwork)

• You can’t provide usable BAS or returns yet (new venture, complex structures).
• You hold large equity but limited documentation.
• A niche low‑doc lender offers 65% LVR and an indicative 7.8% p.a. interest‑only.
• Maximum loan on $2.4m is $1.56m, so you’d either need more cash or a cheaper property.

Monthly repayment (IO):

• Roughly $10,140 per month interest‑only.

Notice that at this rate, IO repayments are similar to full‑doc P&I, but you’re not reducing the debt.

This is why low‑doc should usually be a temporary bridge with a clear exit plan, not your long‑term strategy. Our guide on using interest‑only periods without a forever mortgage walks through how to plan that exit safely.