ANZ has become the latest Big Four bank to ease its home loan lending rules for self-employed Australians. More than two million Aussies work for themselves, but they are typically seen as riskier applicants by the banks and therefore have to meet stricter rules to get a mortgage.

ANZ said it was aiming to make it easier for self-employed Aussies to purchase a home. It said the changes were sparked by customer feedback, with small business customers saying they were facing challenges when applying for loans, particularly due to their irregular income patterns.

ANZ managing director small to medium enterprise, Paul Presland, said small business owners, freelancers, entrepreneurs and sole traders deserved the same access to homeownership as other workers.

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“These changes are about cutting red tape and recognising the value small businesses bring to our economy,” he said.

“We know they are already juggling enough – banking shouldn’t be another pain point.”

What are the main changes?

ANZ said the changes would position it as a “market leader” in home lending for small business owners.

It continues to accept one year of income financials, rather than the traditional two, for self-employed customers.

Some of the key new changes, which are now in effect, include allowing business overdrafts to be spread out over 10 years, rather than seven.

The bank said this would act to boost borrowing capacity.

When customers have an existing fixed rate of term asset finance, lease or hire purchase, ANZ said it will use the actual repayment when making its assessment, rather than adding the traditional 3 per cent interest rate buffer.

Self-employed customers now only need to provide one year of income documentation, rather than two, where they receive income through director fees or company dividends.

Major banks simplify lending for self-employed Aussies

All of the Big Four banks have announced tweaks to their home loan policies for self-employed applicants in recent months.

Commonwealth Bank made the move to accept one-year financials for self-employed customers in October last year, rather than two years.

NAB changed its policy earlier this year, with eligible self-employed Aussies only needing to provide a single year’s financial statement.

Westpac similarly introduced a one-year income assessment, down from the standard two, in July.