Sole Trader vs Company - How Business Structure Affects Your Mortgage

General information only — not financial advice. This content is intended as educational guidance. Consult a qualified financial adviser, mortgage broker, or legal professional before making financial decisions. See our full disclaimer.

Your business structure directly impacts how lenders assess your income. A sole trader earning $150,000 profit will be assessed differently from a company director paying themselves a $90,000 salary with $60,000 in retained company profits.

Frequently Asked Questions

Can I change my business structure before applying for a home loan?

You can, but it's generally not advisable close to a mortgage application. Lenders want to see 2 years of consistent trading under the same structure.

Do lenders count retained company profits?

It varies significantly. Some lenders add 100% of retained profits. Others only count 50%, and some ignore retained profits entirely. A broker experienced with self-employed lending can match you to the right lender.

Is a family trust good or bad for getting a mortgage?

Neither inherently - it depends on how income is distributed. Consistent distributions to you each year are assessable. Wildly varying distributions complicate applications.

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