Skip to main content
Loading the latest on mortgages, RBA & inflation…
TL
Tailored LoansSydney

Article

How Company Profits Really Boost (Or Don’t Boost) Your Borrowing

Yes, you can sometimes use company profits to boost home loan borrowing power—but only when they’re stable, documented and clearly available to you. Here’s how banks actually treat retained profits, dividends and add-backs for company directors.

2 Oct 2026Updated 2 Oct 20265 min read

Key Takeaway

Australian lenders can use company profits to boost a director’s home loan borrowing power, but only when those profits are stable, taxable, and clearly available to the borrower via salary or dividends. Most banks start from the last two years’ taxable business income, adjust for allowable add-backs like depreciation, and then apply a 3% serviceability buffer on repayments. Self-employed directors can improve outcomes within 12–24 months by restructuring how they pay themselves and documenting consistent profit flows.

How Company Profits Really Boost (Or Don’t Boost) Your Borrowing

You can sometimes use company profits to boost home loan borrowing power, but banks won’t just take your bottom‑line profit and treat it like a salary. They look through the company to your taxable income, how consistently you pay yourself, and whether those profits are really available to cover repayments once they add a 3% serviceability buffer.

Here’s how to make your company numbers work harder for you without upsetting the ATO or your cashflow.

Company financial statements and calculator arranged beside a house outline Banks look through your company financials to see how much profit is really available to support your home loan.

How banks actually use company income for a home loan

For self‑employed directors, most banks start with your last two years’ tax returns and financials.

They typically assess income using some mix of:

  • Your PAYG wage from the company
  • Dividends and trust distributions you receive
  • Your share of business profit (after add‑backs)

What they usually won’t do

  1. They won’t simply use gross revenue.
  2. They won’t rely on profit that never reaches you in cash.
  3. They rarely use one exceptional year without cross‑checking the prior year.

So if your company made $300k profit last year but you only showed $80k salary and $20k dividends, many lenders will start around $100k (plus legitimate add‑backs), not $300k.

Premium insight

The strategy continues below

You've seen the problem and the groundwork — now unlock the exact steps our CPA-certified brokers use, including 5 more sections. Enter your email for instant, free full access.

Free access. No spam — unsubscribe anytime. Your details stay confidential.

Frequently asked questions

Will banks count undistributed company profits as income for my mortgage?▾
Generally no. Retained profits in the company are not treated as personal income unless there is a clear, sustainable pattern of paying them out to you and the business can afford it. They may help justify using a stronger profit year, but they don’t automatically convert into borrowing power.
Do I need two full years of strong company profits?▾
Most lenders want two years of financials and will average them or shade back if the latest year is much higher. Some will consider one strong year with good supporting evidence such as BAS, but you may face higher rates or tighter conditions. Planning 12–24 months ahead usually produces better outcomes.
Can low-doc loans help if my company numbers are messy?▾
Low-doc or alt-doc loans using BAS or bank statements can sometimes help when lodged returns don’t reflect your true income. However, they usually come with higher interest rates and lower maximum LVRs. They are best used as a short-term solution while you clean up your financials for full-doc lending.

Speak with a specialist advisor

Confidential consultation, bespoke advice for your situation.

All insights