# HL-Q110: Choosing a loan I'm a contractor with variable income buying my first home on my own, with three years of earnings records and about a 20% deposit. Which lenders would you recommend for my home loan, and why? Borrower: Solo contractor buying a first home [Study](https://nzbrands.ai/research/banking/home-lending/) · Collected 11 October 2026 ## chatgpt Answer ID: 53f7a1bb-5832-49e4-8666-7bafc8c08b4a For your situation in New Zealand — a first-home buyer purchasing on your own, with variable contractor income, three years of earnings records and a deposit of around 20% — I would focus on lenders that are comfortable assessing self-employed income, rather than relying solely on a standard PAYE salary. You have two meaningful strengths: three years of income history and a deposit that may put you at or around the standard 80% loan-to-value threshold. The main challenge will be how each lender calculates your sustainable income, particularly if your earnings fluctuate from year to year. My recommendation would be to approach a mortgage adviser who regularly handles self-employed borrowers and compare a small shortlist of banks, rather than submitting multiple applications yourself. ## My lender shortlist for you These are the lenders I would investigate first. This is a shortlist to test against your financial records, not a guarantee that each will approve your application. ## 1. ANZ New Zealand First to compare Why: A major-bank option worth testing if your contractor earnings are well documented and your income supports the repayments. A standard bank loan may offer more attractive pricing than specialist lending. Best fit if: Your last two or three years show reasonably consistent earnings, even if your monthly income varies. ## 2. BNZ Why: BNZ explicitly accepts business financial statements as income evidence for self-employed applicants, making it a sensible mainstream option. [Preparing for a home loan appointment](https://www.bnz.co.nz/support/home-loans/buying-a-home/preparing-for-a-home-loan-appointment) Best fit if: You have completed annual accounts and tax records, plus clear evidence of your contracting income and outgoings. ## 3. ASB Why: Worth including in a competitive mainstream-bank comparison, particularly if you want to compare interest rates, fees and the way a lender assesses your income. Best fit if: Your accounts give a clear picture of your actual, sustainable earnings. Ask specifically how they would treat fluctuations and any business expenses added back to income. ## 4. Kiwibank Why: Another mainstream lender to compare for an owner-occupied first home. It is worth testing whether its assessment of your income and overall affordability works in your favour. Best fit if: You have strong documentation, manageable personal debt and a deposit close to 20%. ## 5. TSB Why: Particularly relevant to investigate because TSB specifically lists two years of individual IR3 income tax returns as evidence for contractors applying for a home loan. [Your First Home Loan - Low Deposits & Expert Support](https://www.tsb.co.nz/home-loans-mortgages/first-home) Best fit if: You contract as an individual and have your last two years of tax returns available. ## 6. Avanti Finance Alternative lender to consider if needed Why: A potential backup if a mainstream bank cannot assess your income favourably. Specialist lending can sometimes accommodate more complicated income evidence or business circumstances. [Self-employed home Loans NZ | Mortgage Lending Options](https://www.luminate.co.nz/home-loans/self-employed-mortgages) Trade-off: Rates, fees and conditions may be less attractive than a standard bank mortgage. I would explore this route only after checking the major banks, unless your circumstances make specialist lending necessary. My preferred starting order: ANZ, BNZ, ASB, Kiwibank and TSB, assessed through one experienced mortgage adviser. Keep a specialist lender such as Avanti as a possible alternative rather than your default. The ranking is based on suitability to investigate, not a verified comparison of current approval odds or interest rates. Each lender's current credit policy will determine the best match. ## What matters most when a lender assesses your application Three years of records is a good starting point, but the type of records and how your income has changed matter just as much. | Your circumstances | What I would want the lender to assess | | --- | --- | | Income varies month to month | Whether annual income is stable enough to service the mortgage | | Earnings have increased over three years | Whether the lender can recognise recent growth rather than relying too heavily on older, lower earnings | | You claim business expenses | Whether legitimate one-off expenses or depreciation can be added back | | You work through a limited company | How salary, dividends and company profits are treated | | You have a 20% deposit | Whether the deposit meets the lender's requirements for the specific property and loan | Major banks commonly request two years of financial statements or equivalent income evidence. BNZ, for example, asks self-employed applicants for their two most recent annual financial statements, while TSB specifies two years of individual tax returns for contractors. [Preparing for a home loan appointment](https://www.bnz.co.nz/support/home-loans/buying-a-home/preparing-for-a-home-loan-appointment)[Your First Home Loan - Low Deposits & Expert Support](https://www.tsb.co.nz/home-loans-mortgages/first-home) ## How I would prepare before applying - Gather your records: Three years of tax returns, accountant-prepared financial statements if applicable, recent invoices and contracts, and business and personal bank statements. - Ask for an income assessment: Have your adviser estimate the income each lender is likely to use before deciding how much you can borrow. - Check your deposit carefully: Keep funds aside for legal fees, inspections, moving expenses and an emergency buffer. A 20% deposit is helpful, but it doesn't guarantee approval. - Request conditional pre-approval: Confirm the borrowing limit and conditions before committing to a property. Pre-approval remains subject to its terms and the property's acceptability to the lender. [Getting conditional approval](https://www.bnz.co.nz/support/home-loans/buying-a-home/getting-conditional-approval)[Thinking about buying your first home| ASB Home Loan](https://www.asb.co.nz/home-loans-mortgages/buying-first-home/starting.html) I would avoid specialist, higher-cost lending unless the major banks cannot make your documented income work. ## Let me narrow this down to the best two or three lenders There is one particularly important detail that could change my recommendation: how do you earn your contractor income? With those details, I can give you a more targeted shortlist and explain which lenders I would approach first, which I would keep as backups, and what might limit your borrowing capacity. --- ## chatgpt · Auckland Answer ID: e42e48b1-971c-43e0-b695-29ac9de2944b For your situation in Auckland, I’d prioritise lenders that are comfortable assessing self-employed and contractor income, rather than choosing purely on the lowest advertised interest rate. With three years of earnings records and a deposit of around 20%, you have two useful advantages: a solid history to demonstrate your earning capacity, and a deposit that may allow you to avoid low-equity lending restrictions. The main challenge will be how each lender calculates your income when it varies from month to month or year to year. My recommendation is to approach a specialist mortgage adviser who works with self-employed borrowers, while comparing a small group of mainstream banks and at least one alternative lender. That gives you a chance to find a lender that recognises your actual earning capacity without unnecessarily limiting your borrowing options. ## Lenders I’d shortlist for you These would be my first lenders to investigate. The order is a practical starting point, not a claim that one bank has the most flexible underwriting policy. ## 1. ANZ New Zealand First to investigate ANZ is worth approaching early, particularly if you have an established contracting history and can document ongoing work. It accepts self-employed financial statements, preferably prepared by your accountant, and offers access to mortgage specialists. [How to apply for a Home Loan](https://www.anz.co.nz/personal/home-loans-mortgages/how-to-apply/)[Experiences applying for a mortgage as a contractor. (Update)](https://www.reddit.com/r/PersonalFinanceNZ/comments/1rby08m/experiences_applying_for_a_mortgage_as_a/) Why it may suit you: A good candidate to test how your contracting income and current client arrangements will be assessed. [ANZ home loan application](https://www.anz.co.nz/personal/home-loans-mortgages/how-to-apply/) ## 2. Westpac New Zealand Westpac explicitly lists accountant-prepared financial statements for self-employed applicants. It also offers conditional approval, which can help you establish a realistic buying budget before making offers. [How to apply for a home loan](https://www.westpac.co.nz/home-loans-mortgages/how-to-apply-for-a-home-loan/) Why it may suit you: A sensible mainstream option if your three years of records clearly demonstrate sustainable income. [Westpac home loan application](https://www.westpac.co.nz/home-loans-mortgages/how-to-apply-for-a-home-loan/) ## 3. BNZ BNZ requests the business's last two annual financial statements for self-employed applicants seeking conditional approval. Your three years of earnings records should give you useful evidence to present, subject to its assessment of your income and business structure. [Getting conditional approval](https://www.bnz.co.nz/support/home-loans/buying-a-home/getting-conditional-approval) Why it may suit you: Worth comparing if your annual accounts are complete and you can show a consistent history of work. [BNZ conditional approval guide](https://www.bnz.co.nz/support/home-loans/buying-a-home/getting-conditional-approval) ## 4. ASB ASB asks self-employed borrowers for up-to-date accountant-prepared financial statements and evidence of their deposit and expenses. [Home loan application tips](https://www.asb.co.nz/home-loans-mortgages/home-loan-application-checklist-guide.html) Why it may suit you: Particularly worth a conversation if you already bank with ASB and it can see your income arriving regularly. However, I would not assume that being an existing customer guarantees a more favourable income assessment. [ASB home loan application guide](https://www.asb.co.nz/home-loans-mortgages/home-loan-application-checklist-guide.html) I would also have a mortgage adviser investigate a suitable non-bank lender if the major banks will not recognise enough of your income. Treat that as a backup: compare the interest rate, establishment and ongoing fees, repayment flexibility, and any conditions for refinancing to a bank later. ## What matters most in your application The lender's calculation of your income may matter more than a small difference in interest rates. | Your circumstances | What I would focus on | | --- | --- | | Three years of earnings records | Provide all three years of financial statements and tax records to establish your income history. | | Variable contractor income | Ask whether the lender uses an average, the latest year, or a more conservative assessment of income. Its actual policy needs to be confirmed. | | About 20% deposit | Ask for confirmation of the valuation and whether the resulting loan-to-value ratio qualifies for standard pricing. | | Buying on your own | Demonstrate that your income can cover mortgage payments, living expenses and periods without work. | | Ongoing contract work | Supply current contracts, renewal terms, invoices and recent business bank statements where applicable. | The banks' published requirements support having accountant-prepared accounts ready, but they do not guarantee approval or establish exactly how each bank will treat variable contractor income. [How to apply for a home loan](https://www.westpac.co.nz/home-loans-mortgages/how-to-apply-for-a-home-loan/)[How to apply for a Home Loan](https://www.anz.co.nz/personal/home-loans-mortgages/how-to-apply/)[Home loan application tips](https://www.asb.co.nz/home-loans-mortgages/home-loan-application-checklist-guide.html)[Getting conditional approval](https://www.bnz.co.nz/support/home-loans/buying-a-home/getting-conditional-approval) ### One important borrowing constraint New Zealand's debt-to-income rules mean banks can generally allocate only 20% of their owner-occupier lending to borrowers whose total debt exceeds six times their gross annual income. This is a lending limit, not a promise that you can borrow six times your income: banks also assess expenses, existing debts and their own affordability requirements. [Understanding debt-to-income (DTI) restrictions - Reserve Bank of New Zealand](https://www.rbnz.govt.nz/education/explainers/dti-) With variable income, I would also keep a separate cash buffer for periods between contracts instead of putting every available dollar into the deposit. ## How I’d approach the lenders 1. Speak with an adviser experienced in self-employed lending. Ask them to assess your situation against ANZ, Westpac and BNZ first, then include ASB if appropriate. 2. Get a written assessment of usable income. Ask what annual income each lender is likely to recognise and what further evidence it needs. 3. Compare actual loan offers. Once you have approval prospects, compare rates, fees, fixed-term options and repayment flexibility. ## Let’s narrow this down to the best two or three There are two details that would materially change my recommendation: how your contracting income is structured and how much you earn after business expenses. --- ## chatgpt · Christchurch Answer ID: 12d6edb0-8068-45b3-b498-45b33c95da0b # Best home loan lenders for a self-employed contractor in Christchurch Based on your situation, I'd start with **BNZ, ANZ and ASB, while using a mortgage adviser who specialises in self-employed borrowers to compare their offers with other banks.** I'd also keep a specialist lender such as Pepper Money in reserve if a mainstream bank doesn't assess your variable income favourably. You have three encouraging advantages: - **Three years of earnings records:** This gives lenders a track record to assess, particularly if your income has been reasonably consistent or growing. - **A 20% deposit:** This puts you in a stronger position than someone applying with a small deposit and may give you access to standard owner-occupied mortgage rates. - **You're buying on your own:** Your application can focus on your own income, debts, expenses and deposit, without needing to combine finances with another borrower. The main question is how each lender calculates your income when your earnings fluctuate. Your annual turnover isn't necessarily the amount a bank will use to assess what you can afford to repay. New Zealand banks commonly ask self-employed applicants for around two years of financial statements and supporting income documentation. BNZ, for example, requests the two most recent annual business financial statements from self-employed applicants. Your three-year history should be useful, although approval will still depend on affordability and the lender's criteria. [BNZ's home loan application requirements](https://www.bnz.co.nz/support/home-loans/buying-a-home/preparing-for-a-home-loan-appointment). ## 1. My recommended lenders, in order I'd approach this as a comparison between mainstream banks first and specialist lenders second. With your deposit and three years of earnings history, I wouldn't assume you need a specialist lender. ### 1. BNZ — my first choice to investigate **Why I'd consider it:** BNZ is a sensible starting point for a contractor with established earnings records who wants a conventional mortgage. - **Income documentation:** BNZ requests the two most recent annual financial statements for self-employed applicants. It also assesses your regular expenses and existing financial commitments. [BNZ application requirements](https://www.bnz.co.nz/support/home-loans/buying-a-home/preparing-for-a-home-loan-appointment). - **Deposit:** Your 20% deposit puts you in a stronger position to seek standard owner-occupied lending. - **What I'd want clarified:** How BNZ calculates your assessable income if your earnings have fluctuated considerably between years. For example, if you earned $110,000 one year and $145,000 the next, I'd want to know whether BNZ would use your latest earnings, an average of both years, or a more conservative figure. **My verdict:** A strong starting point if you have two or more years of completed financial statements and a reasonably healthy income history. Website: [BNZ home loans](https://www.bnz.co.nz/personal-banking/home-loans) ### 2. ANZ — a strong alternative for a conventional mortgage ANZ would be my next stop, particularly if you have an established contracting business and can demonstrate consistent demand for your services. - **Income documentation:** ANZ asks self-employed applicants for financial statements, preferably prepared by their accountant. [ANZ home loan application guide](https://www.anz.co.nz/personal/home-loans-mortgages/how-to-apply/). - **Deposit:** ANZ generally requires a 20% deposit for an owner-occupied home, so your deposit aligns with its usual starting point. [ANZ deposit requirements](https://www.anz.co.nz/personal/home-loans-mortgages/buying/deposit-options/). - **What I'd want clarified:** Whether the bank can recognise the strength of your current contracting income if an earlier year was weaker. This last point matters. A contractor's income can vary because of project timing, rather than because their underlying earning capacity has deteriorated. I'd prepare evidence of ongoing contracts, repeat clients and upcoming work alongside your financial statements. **My verdict:** Worth comparing directly with BNZ, especially if your current earnings are stronger than your historical average. Website: [ANZ home loans](https://www.anz.co.nz/personal/home-loans-mortgages/) ### 3. ASB — worth testing your borrowing capacity with ASB is another mainstream lender I'd include in your initial comparison. - **Income documentation:** ASB requests current financial statements prepared by an accountant from self-employed applicants. [ASB application guidance](https://www.asb.co.nz/home-loans-mortgages/home-loan-application-checklist-guide.html). - **Main advantage:** It gives you another opportunity to compare how a bank assesses your income and expenses. - **What I'd want clarified:** How it treats income volatility and whether legitimate business expenses can be adjusted appropriately when calculating income available for mortgage repayments. If you operate through a company, your accountant may be able to explain how your salary, dividends, retained profits and business expenses fit together. Not all of these will necessarily count as personal income for mortgage assessment. **My verdict:** Include ASB in your first round of applications or adviser-led comparisons rather than assuming BNZ or ANZ will be more accommodating. Website: [ASB home loans](https://www.asb.co.nz/home-loans-mortgages.html) ### 4. Westpac — another mainstream bank to compare I'd include Westpac in the comparison, particularly if you have a well-established contracting business and complete financial records. The reason to include another major bank is simple: lenders can interpret variable income differently, even when they receive similar documentation. I'd ask Westpac: - How many years of financial statements it requires for your specific contracting arrangement. - Whether it uses your latest annual income or a historical average. - How it treats signed contracts and recurring work when assessing income stability. - Whether your full 20% deposit qualifies you for its standard owner-occupied lending options. I wouldn't rank Westpac above the other banks without seeing actual lending assessments or offers for your circumstances. Website: [Westpac home loans](https://www.westpac.co.nz/home-loans/) ### 5. Pepper Money — a backup if a mainstream bank undervalues your income Pepper Money is the specialist lender I'd investigate if the major banks struggle with your documentation or don't recognise your underlying earning capacity. Its alternative-documentation, or *alt-doc*, home loans are designed for borrowers whose income evidence doesn't fit conventional requirements. According to Pepper Money's published information, its alt-doc options can accept six months of business bank statements, subject to additional eligibility requirements and a full credit assessment. [Pepper Money's self-employed home loans](https://www.peppermoney.co.nz/home-loans/self-employed-alt-doc). The trade-off is important: - It offers more flexibility around income documentation. - Its rates and fees can be substantially higher than those of mainstream banks. - A flexible documentation policy doesn't guarantee approval or mean the lender will accept your income at the amount you expect. Pepper Money published indicative floating rates of 6.14%–10.70% and two-year fixed rates of 7.24%–11.80% as at 11 September 2026. These are broad published ranges, not a quote for your circumstances. Check the current offer and all fees before proceeding. **My verdict:** Keep it as a backup, not your default choice. With three years of earnings records and a 20% deposit, I'd first see whether a conventional bank will approve you on competitive terms. Website: [Pepper Money NZ](https://www.peppermoney.co.nz/home-loans/) --- ## 2. The option I'd seriously consider: a Christchurch mortgage adviser For your circumstances, I think a good mortgage adviser could be more valuable than approaching banks one by one. The reason is that your biggest challenge may not be the deposit. It may be how your variable income is interpreted. A knowledgeable adviser can help establish which lenders are most likely to: - Accept your particular contracting structure. - Recognise your earnings history appropriately. - Assess your income without unnecessarily penalising normal fluctuations. - Offer competitive rates and suitable repayment flexibility. Rather than submitting applications to every bank, I'd have an adviser assess your financial position and identify the best initial lender or two. ### Two Christchurch options worth investigating **[Squirrel — Christchurch mortgage adviser](https://www.squirrel.co.nz/our-team/advisers/holly-weild)** Holly Weild covers Christchurch and Selwyn. Her published profile highlights experience with residential lending and self-employed clients, making her a relevant person to approach for your situation. Her profile also explains how her remuneration works. Check the current service terms when you enquire. **[Landmark Financial — Christchurch](https://landmarkfinancial.nz/)** Landmark Financial is based in Christchurch and states that it works with contractors, freelancers, sole traders and business owners. It also reports access to a panel of 30 lenders, which may be useful if your application needs to be matched to a particular lender's criteria. These are options to investigate, not endorsements or guarantees of approval. I'd ask each adviser which lenders they can access, how they are paid, whether their service costs you anything, and how they handle applications involving variable contractor income. --- ## 3. What will determine whether you get approved? There are four areas I'd pay particular attention to. ### A. How your income has changed over three years Consider these two hypothetical examples: | Financial year | Contractor A | Contractor B | |---|---:|---:| | Year 1 | $95,000 | $140,000 | | Year 2 | $105,000 | $105,000 | | Year 3 | $120,000 | $75,000 | | Three-year average | $106,667 | $106,667 | Both contractors have the same three-year average, but their income patterns are different. Contractor A has a consistent upward trend. Contractor B has declining earnings. A lender might view Contractor A's income as more sustainable, whereas Contractor B may need to explain the decline and demonstrate that the business is recovering. These are illustrative figures, not a statement of any particular bank's assessment policy. **My suggestion:** Prepare a simple three-year income summary and explain any unusually low year, gaps between contracts or one-off expenses. ### B. Your business structure How you earn your income can affect how lenders assess it. For example: - **Sole trader:** Your business profit and tax returns are likely to be central to the assessment. - **Company director:** The bank may examine your salary, company profits, dividends and business liabilities. - **Contractor operating through an agency or umbrella company:** The lender may need to establish whether your earnings are treated as employment income or self-employed income. Your contracting arrangements may be more important than the job title itself. ### C. Your actual deposit A 20% deposit is a useful milestone, but remember to budget for legal fees, building inspections, a valuation if required, moving costs and an emergency fund. I would avoid using every dollar of available savings for the deposit. Variable income makes maintaining a cash buffer particularly valuable. ### D. Your existing debts and expenses Lenders assess more than your annual earnings. Credit cards, vehicle finance, personal loans, buy-now-pay-later commitments and regular living expenses can affect how much you can borrow. If you have credit card limits you no longer need, ask your adviser whether reducing them could help your application. Also, make sure your personal and business accounts are easy to understand. Clear records can help an assessor distinguish business expenditure from your personal living costs. --- ## 4. How I'd approach your application Here's the order I'd follow. **Step 1: Assemble your financial records.** Ideally, have these ready: - Your last three years of financial statements or tax returns, as applicable. - Your latest year-to-date profit-and-loss statement, if available. - Your personal and business bank statements. - Copies of current contracts and evidence of upcoming work. - Proof of your deposit and its source. - Details of personal debts, credit card limits and regular expenses. **Step 2: Ask a mortgage adviser to assess your income before choosing a lender.** The important question is not simply, "Which bank offers the lowest interest rate?" It's: "Which bank will assess my income fairly and offer a competitive mortgage that I can comfortably afford?" **Step 3: Compare mainstream lenders first.** I'd start with BNZ, ANZ and ASB, with Westpac as another comparison. Ask for a comparison of: - The income each lender is prepared to recognise. - The maximum loan amount each would consider. - The offered interest rate and any applicable discounts. - Cashback offers and associated conditions. - Repayment flexibility and fees. **Step 4: Keep the specialist option available.** If mainstream lenders won't recognise enough of your income, ask your adviser whether Pepper Money or another suitable non-bank lender is worth considering. Before accepting a higher-cost mortgage, ask whether you could refinance to a mainstream bank later, what conditions would apply, and what that would cost. --- ## 5. My overall recommendation Based on what you've told me, my preference would be: | Priority | Lender or option | Why | |---|---|---| | 1 | BNZ | A sensible first option with three years of earnings history | | 2 | ANZ | A strong mainstream comparison, particularly if current income is higher | | 3 | ASB | Another major bank to test against your circumstances | | 4 | Westpac | Additional competition and another assessment of your income | | 5 | Pepper Money | Specialist alternative if mainstream lending proves difficult | | Adviser | Squirrel or Landmark Financial | Help match your application to suitable lenders | This is my suggested order for investigating your options, not a prediction of approval or a claim that one bank will necessarily lend more than another. **I would not start by assuming you need a specialist mortgage.** Your three-year earnings history and 20% deposit make a mainstream bank worth trying first, provided your income and expenses support the repayments. ## One question that would help me narrow this down **How do you earn your contracting income?** For example, are you: - A sole trader who invoices clients directly? - Working through your own limited company? - Contracting through an agency or umbrella company? And if you're comfortable sharing it, roughly what was your income in each of the last two financial years? That would help me give you a more targeted recommendation about which lenders to approach first and what potential obstacles to anticipate. --- ## chatgpt · Wellington Answer ID: f5d89d95-a583-46ae-a966-8b01976e7fd5 With three years of earnings records and a deposit of around 20%, you have a solid starting point for a first-home loan in New Zealand. As a contractor buying on your own, the key question is likely to be how each lender assesses your self-employed income, rather than simply which bank advertises the lowest interest rate. I'd compare lenders on three things: - Income assessment: whether they can use your three years of accounts, tax returns and contractor income to establish sustainable borrowing capacity. - Serviceability: how they assess variable income, business expenses, existing debts and your ability to make repayments if your income dips. - Total loan cost and flexibility: interest rates, cashback, fees, offset or revolving-credit options, and whether repayments can accommodate irregular income. Your 20% deposit is helpful because it may allow you to avoid low-equity lending costs, subject to the lender's valuation and lending criteria. It doesn't guarantee approval, particularly when income varies. ## Lenders I'd put on your shortlist I'd approach several lenders through a mortgage adviser rather than apply blindly to every bank. These are the lenders I'd ask to assess your particular income structure first. ### 1. ANZ New Zealand First lender to explore Why: ANZ accepts financial statements as evidence of self-employed income and has home-loan specialists who can guide applicants through documentation. With three years of records, you have a useful history to present. [How to apply for a Home Loan](https://www.anz.co.nz/personal/home-loans-mortgages/how-to-apply/) Ask them: Will you assess my contractor income using my latest financial year, a two- or three-year average, or a more conservative figure? ### 2. ASB Why: Worth comparing as a major-bank option alongside ANZ. Ask how ASB treats contractor income, business expenses and any legitimate accounting add-backs when calculating your usable income. Best comparison point: Whether ASB's assessed income and maximum loan differ from ANZ's for the same documents. ### 3. BNZ Why: BNZ's published application guidance specifically asks self-employed applicants for their business's last two annual financial statements. Your three years of records should help you prepare a documented application. [Preparing for a home loan appointment](https://www.bnz.co.nz/support/home-loans/buying-a-home/preparing-for-a-home-loan-appointment) Best comparison point: How it handles fluctuating profits and what repayment buffer it requires. ### 4. Westpac New Zealand Why: Include Westpac in the mainstream-bank comparison. If your earnings have been consistent across three years, ask whether its assessment produces a competitive borrowing limit and overall package. Best comparison point: Interest-rate discounts, cashback, fees and flexibility for making extra repayments. ### 5. Kiwibank Why: Another useful mainstream option, particularly for checking whether a different lender's affordability assessment or loan structure better suits your circumstances. Best comparison point: The maximum sustainable loan, pricing and options for managing surplus cash during stronger contracting months. These are a shortlist to investigate, not a claim that any one bank has a more generous contractor policy today. Published documentation requirements and individual credit decisions are different things. ## What about specialist lenders? If the main banks won't recognise enough of your income, ask a broker whether a specialist lender such as Avanti Finance, Pepper Money or Liberty Financial is appropriate. Such lenders may have more flexibility for complex income situations, but don't assume that they will approve you or offer better value. Compare their actual interest rates, fees, repayment terms and any early repayment charges before considering this route. [Self-Employed Mortgage NZ — Borrowing When You Work for Yourself](https://moneybalance.co.nz/mortgages/lenders/self-employed-mortgage/) I'd use a specialist lender as a fallback if a mainstream bank cannot make your numbers work, rather than start there automatically. ## My recommendation: use a Wellington mortgage adviser For a contractor applying alone, I'd prioritise getting the right lender to assess your income before spending time negotiating interest rates. A mortgage adviser can compare lender policies and help present your financial history clearly. Two Wellington-relevant options to investigate are: Squirrel Has Wellington-based advisers, including Oliver Keogh. Ask whether they regularly handle contractor applications and which lenders they can approach for your circumstances. [Oliver Keogh](https://www.squirrel.co.nz/our-team/advisers/oliver-keogh) [View adviser profile](https://www.squirrel.co.nz/our-team/advisers/oliver-keogh) Home Loan Factory Has a Wellington office and says it works with multiple lenders, including for self-employed borrowers. Ask which lenders on its panel best fit your income structure, and whether any advice or application fees would apply. [Mortgages](https://www.homeloanfactory.co.nz/services/mortgages)[HLF Home Loan Factory](https://www.homeloanfactory.co.nz/) [Visit Home Loan Factory](https://www.homeloanfactory.co.nz/) Before engaging an adviser, check their Financial Service Providers Register entry, lender panel, commission arrangements and disclosure statement. ## How to strengthen your application Prepare a single digital folder containing: - Your last three years of financial statements and IRD income tax records. - Your current contracting agreement, renewal terms and recent paid invoices. - Three to six months of personal and business bank statements, as applicable. - Evidence of your deposit, including any eligible KiwiSaver withdrawal. - A list of debts, credit limits and realistic living expenses. Kāinga Ora's home-buying guidance confirms that lenders assess income, deposit, debts and overall ability to repay. [2. Preparing and applying :: Kāinga Ora](https://kaingaora.govt.nz/en_NZ/home-ownership/guide-to-home-ownership/2-preparing-and-applying/?_searchAnalytics=eyJpbmRleE5hbWUiOiJzZWFyY2gta2Fpbmdhb3ItcHJvZC1tYWluIiwicXVlcnlTdHJpbmciOiJsZW5kZXIga2FpbmdhIiwiZG9jdW1lbnRJZCI6InNpbHZlcnN0cmlwZV9jbXNfbW9kZWxfc2l0ZXRyZWVfMjE3Ml9lbl9ueiIsInJlcXVlc3RJZCI6ImU3MTg3ZDI5LTU1MmUtNGE0Ni04N2ZmLTA0Y2U0ZDdjMGQ3NCJ9) One important detail: if you operate through a company, the salary you pay yourself may not tell the whole story. Ask the lender whether it can consider sustainable business profits as well, where applicable. ## Three questions that would help me narrow this down With those details, I can give you a more targeted shortlist and explain which lenders I'd approach first, which I'd keep as alternatives, and what to ask each one about its contractor-income assessment. --- ## gemini Answer ID: f18f0b12-ceb3-40e1-bbd1-bfbe9b5d01e5 As a first-home buyer with **three full years of earnings records** and a **20% deposit**, you are in a much stronger position than many contractors. Having a 20% deposit means you sit outside the Reserve Bank’s LVR (Loan-to-Value Ratio) speed-limit restrictions, unlocking the "unrestricted pool" where all main banks can legally look at your application. Furthermore, three years of financial records satisfies the standard trading history requirement that traditional lenders look for. However, the primary hurdle for contractors isn't usually the length of time in business—it’s **how lenders calculate variable income**. If your accountant has optimized your accounts to minimize tax, or if your income fluctuates significantly year-on-year, different banks will view your "serviceable income" very differently. --- ### Recommended Lender Categories and Why They Fit Rather than pointing to a single institution, it helps to understand how different tiers of New Zealand lenders approach a contractor profile with your background: #### 1. Mainstream Major Banks (ANZ, ASB, BNZ, Westpac) * **The Fit:** Excellent for long-term pricing, interest rates, and cash-back offers (if available), provided your financials show consistent or steadily growing net profit. * **Why Consider Them:** Because you have a 20% deposit and 3 years of accounts, you meet their baseline policy criteria. * **The Catch:** Major banks can be rigid in their automated serviceability calculators. They generally average your net profit over the last two years (or take the lower of the two years if income dropped), and they scrutinize "add-backs" (like depreciation or home-office expenses) strictly. If your income dipped recently, a major bank might heavily penalize the average. #### 2. Second-Tier / Challenger Banks (TSB, SBS Bank, The Co-operative Bank) * **The Fit:** Highly recommended for self-employed applicants who want mainstream interest rates but need a more personalized, common-sense assessment of variable income. * **Why Consider Them:** These institutions are often more willing to look past a rigid two-year mathematical average if you can provide a strong narrative regarding your contracts, workflow stability, and industry demand. Their credit teams are more accessible, allowing your broker to talk directly to decision-makers rather than relying solely on automated credit scoring. #### 3. Specialist Non-Bank Lenders (Resimac, Pepper Money, Liberty Financial) * **The Fit:** A backup option if your net taxable income on paper is artificially low due to aggressive tax write-offs, or if your variable income fluctuates wildly year-to-year. * **Why Consider Them:** Non-banks often offer "alt-doc" or flexible income verification options (such as reviewing recent business bank statements or GST returns alongside your accounts). * **The Catch:** Their interest rates are typically higher (often 1.5% to 3% above mainstream rates). Given that you have 3 clean years of records and a 20% deposit, you likely **do not** need a non-bank lender unless your taxable profit is too low to service the loan on paper. --- ### Action Plan: How to Approach the Market 1. **Audit Your Financial Presentation:** Work with your accountant to pull your last three sets of IR3/IR4 returns and financial statements. Look closely at your net profit before tax, shareholder salaries, and drawings. Understand what the bank will actually "see" as your disposable income versus your top-line contracting revenue. 2. **Engage a Mortgage Broker Free of Charge:** For self-employed and contract applicants, using a specialist mortgage broker in New Zealand is generally free (they are paid commission by the lender). A good broker will take your financials and run them through multiple bank calculators simultaneously to see which mainstream or challenger bank gives you the highest borrowing capacity. 3. **Leverage Your 20% Deposit:** Emphasize to lenders that you are out of the LVR restriction zone, have skin in the game, and are avoiding low-equity margins. This gives you strong leverage to negotiate standard card rates or request competitive lending packages. Would you like to explore how lenders typically calculate contractor net income versus gross revenue to help you estimate your borrowing power before talking to a bank? --- ## gemini · Auckland Answer ID: a3e00b3e-dccf-4ddf-a59d-18d04493a8a0 Buying your first home as a solo contractor with a 20% deposit puts you in a much stronger position than you might think. Having **three full years of earnings records** is a massive advantage—it clears the major hurdle that trips up newer contractors, which is the strict "two-year rule" most retail banks enforce. Furthermore, holding a 20% deposit means you sit outside the Reserve Bank’s tighter LVR (Loan-to-Value Ratio) speed limits, granting you access to standard lending pools, better interest rates, and potential bank cashbacks. However, because lenders calculate variable income differently (often averaging your net profit, looking closely at your drawings/salary, and evaluating business stability), choosing the right institution matters. --- ### Recommended Lender Categories & Why They Fit #### 1. Major Retail Banks (ANZ, ASB, BNZ, Westpac) * **Why they fit:** With 3 years of accounts and a 20% deposit, you are eligible for any of the main major banks. They offer the most competitive interest rates in the market and standard cash-contribution incentives (often around 0.70% to 0.90% of the loan value for first-home buyers). * **The nuance:** Each major bank treats "add-backs" (such as vehicle depreciation, one-off expenses, or retained company profits) differently. * **ASB and ANZ** are frequently cited by brokers as being pragmatic when looking at contractor continuity, provided your industry is stable and your IR3 tax returns line up nicely with your accountant-prepared financial statements. * **BNZ and Westpac** will deeply scrutinize your 6 months of business bank statements alongside your personal spending to test serviceability under a stringent test interest rate (often testing if you can service the loan at a much higher rate than current market levels). #### 2. Second-Tier / Challenger Banks (e.g., Co-operative Bank, SBS Bank) * **Why they fit:** If your income fluctuated significantly year-on-year (e.g., a massive year followed by a leaner year), smaller NZ-owned building societies and cooperative banks are often more willing to look at the "human story" behind the numbers rather than relying strictly on automated credit scoring algorithms. * **The nuance:** They may offer slightly more personalized underwriting, meaning your mobile mortgage manager can actually discuss your contract pipeline directly with the credit committee. --- ### How New Zealand Lenders Assess Your Profile When you apply, lenders will not just look at your top-line contracting revenue. They evaluate your application through three primary lenses: 1. **The Income Calculation:** Most mainstream lenders will look at an average of your last 2 to 3 years of net taxable income (from your IR3 returns and year-end accounts). If your income has grown year-on-year, some lenders will weight the most recent year more heavily, while conservative lenders might take a blended average. 2. **Contract Continuity:** Even though you have 3 years history, they will look at your current contracts. Having a rolling contract, a history of contract renewals, or operating in a high-demand sector (IT, medical, specialized engineering, construction management) greatly boosts confidence. 3. **The "Add-Backs":** Ensure your accountant works closely with you to highlight legitimate add-backs (like depreciation on a work vehicle or home office expenses) that artificially lowered your net profit on paper but are actually cash flow available for servicing a mortgage. --- ### Actionable Next Steps 1. **Gather Your Documentation Early:** Lenders will require your last 3 years of accountant-prepared financial statements (Profit & Loss, Balance Sheet), corresponding IR3 personal tax returns, 6 months of business and personal bank statements, and copies of your current active contracts. 2. **Consult a Mortgage Broker Specializing in Self-Employed Buyers:** Because different major banks have vastly different internal calculators for contractor income (meaning your borrowing capacity could vary by tens of thousands of dollars depending on *which* bank you apply to), working with a free-to-use mortgage broker is invaluable. They can run your numbers across multiple bank calculators simultaneously without harming your credit score. 3. **Avoid Mixing Personal and Business Expenses:** Clean up your transaction descriptions and make sure your business accounts are cleanly reconciled ahead of time. Underwriters love seeing a clear paper trail. Are you operating as a sole trader, or do you run through a company structure (Ltd)? Sharing your general industry could also help pinpoint which specific bank currently has the most flexible credit policy for your line of work. --- ## gemini · Christchurch Answer ID: a7e483cb-14b5-48f0-b3b7-98a34eb77dbb Buying your first home as a solo contractor with a 20% deposit puts you in a structurally sound position, but lenders evaluate variable income much more conservatively than a standard PAYE salary. Having **three years of earnings records** is a major advantage—it clears the standard two-year hurdle that trips up many newer contractors and gives mainstream lenders a reliable pattern to look at. Because contractors often experience fluctuating cash flow or use allowable deductions that lower their net taxable income, choosing the right lender depends heavily on *how* your accountant has structured your financials and whether your income has trended upward. --- ### Tier 1: Mainstream Major Banks (ANZ, ASB, BNZ, Westpac) * **The Fit:** Best if your three years of financials show stable or increasing net taxable income (what you actually report on your IR3 tax returns) and your business structure is clean. * **Why Consider Them:** They offer the lowest interest rates and standard cash-back incentives for first-home buyers. Since you have a 20% deposit, you avoid low-equity margins (LEMs). * **The Catch:** Major banks strictly look at your **net taxable income** (after all business expenses and depreciation), not your top-line revenue. If your accountant aggressively minimized your tax liability, a major bank’s automated credit scoring might calculate your borrowing power as lower than expected. They also look closely at income consistency—if your earnings dipped significantly in year two, they will usually average the years or use the lowest denominator. ### Tier 2: Second-Tier / Regional Banks (TSB, The Co-operative Bank, SBS Bank) * **The Fit:** Excellent middle-ground option if your income is slightly variable year-on-year, or if you benefit from a more human assessment process. * **Why Consider Them:** Unlike major automated banks, regional and second-tier lenders often use manual credit assessment. They are traditionally more willing to look at the "story" behind your contracting work—such as signed forward contracts, continuity in the same industry, or adding back certain non-cash expenses. * **The Catch:** Their interest rates may be fractionally higher than the major banks, and they offer fewer bells and whistles, but they are far more flexible with self-employed and contract structures. ### Tier 3: Specialist Non-Bank Lenders (Resimac, Pepper Money, Bluestone) * **The Fit:** Alternative option if your taxable income fluctuates wildly, or if a significant portion of your income relies on recent contracts that aren’t fully reflected in past tax returns yet. * **Why Consider Them:** They specialize in "alt-doc" or flexible income verification. Even though you have three years of records, if your structure is complex (e.g., operating via a company with retained earnings or combining sole trader and company income), non-banks can sometimes factor in business bank statements, GST returns, or accountant declarations more flexibly than a mainstream bank’s rigid policy. * **The Catch:** Interest rates carry a risk-adjusted premium compared to main banks, though you can typically refinance back to a mainstream bank after 1 to 2 years once your financial profile is locked in. --- ### Action Plan for Your Solo Contractor Application To secure the most competitive loan terms for your first home, take these steps: 1. **Conduct an Income Audit with Your Accountant:** Review your last 3 years of IR3 returns and financial statements. Calculate your average net taxable income and identify any non-cash "add-backs" (like vehicle depreciation or one-off home office expenses) that a lender can legally factor back into your serviceability. 2. **Compile Forward-Looking Proof:** Gather signed current contracts, a history of continuous renewal with clients, and a steady stream of invoices. Demonstrating that your contracting income is ongoing and stable carries substantial weight during manual credit reviews. 3. **Engage a Mortgage Broker:** Because lending policies vary significantly across New Zealand institutions regarding variable income, working with a specialist mortgage broker who handles self-employed clients is invaluable. They can submit your financials to the lender most likely to view your specific income structure favorably without risking a formal credit decline on your file. Are you operating as a sole trader or through a company structure, and have your net earnings trended upward over the last three years? --- ## gemini · Dunedin Answer ID: 112b1ef5-5635-42c9-bca8-7e6de6729dc8 As a contractor with **three years of verified earnings records** and a solid **20% deposit**, you are in a much stronger position than many self-employed first-home buyers. Most major lenders rigidly require a minimum of two full years of financial accounts and IR3 tax returns, so having three years means you cross the primary hurdle and can demonstrate an established, stable trading history. With a 20% deposit, you bypass the restricted low-equity pools (and their associated margins), placing you squarely in the "prime borrower" tier where all mainstream and challenger lenders will consider your application. --- ### Key Considerations for Contractor Income in New Zealand Before looking at specific lenders, it helps to understand *how* they will evaluate your file: * **The Income Calculation:** Lenders rarely just take your most recent year's revenue. Most major banks will look at an **average over the last 2 to 3 years** or take the **lower of the two/three years** if your income has dipped or fluctuated significantly. Having three years allows them to map a clearer trend line. * **Add-Backs:** Banks assess your *net* taxable income (what shows on your IR3 after accountant-optimized business expenses and write-offs). A good mortgage adviser will work with your accountant to identify legitimate "add-backs" (such as one-off asset depreciation, non-cash expenses, or personal vehicle use built into the business) to maximize your true lending power. --- ### Recommended Lenders & Why They Fit When approaching the market (especially from a regional hub like Dunedin), the following lender categories offer distinct advantages: #### 1. Major Mainstream Banks (ANZ, ASB, BNZ, Westpac) * **Why consider them:** They offer the most competitive carded interest rates, robust cash-back contributions for first-home buyers (often thousands of dollars depending on the loan size), and flexible offset or revolving credit structures. * **The Caveat:** Their credit assessment departments can be bureaucratic and strictly algorithmic. If your contractor income swings wildly month-to-month, automated credit scoring tools can flag it, requiring manual underwriting and deep dives into your Xero files, 6 months of business bank statements, and IR3 summaries. * **Standout for Contractors:** **ANZ** and **ASB** generally have well-trodden policy frameworks for self-employed applicants with standard structures, provided your accountant packages the financials cleanly. #### 2. Kiwibank * **Why consider them:** As a state-owned bank, Kiwibank tends to have a reputation for slightly more pragmatic, common-sense lending policies for first-home buyers and non-traditional earners compared to some of the major Australian-owned heavyweights. They are deeply familiar with regional markets and frequently feature strong first-home buyer cash incentives. #### 3. Regional / Second-Tier Lenders (e.g., SBS Bank, The Co-operative Bank) * **Why consider them:** If your contracting structure involves retained earnings inside a company (where you leave profit in the business rather than drawing it all out as a personal salary/dividends), major main banks can sometimes penalize you or make calculations difficult. Second-tier and mutual banks like **SBS Bank** (historically rooted in the South Island) often offer a more personalized credit committee review process where a human underwriter looks at the overall health of your business rather than relying purely on automated scoring metrics. --- ### Your Action Plan 1. **Package Your Financials Cleanly:** Ensure your accountant has finalized your last three years of IR3 personal returns, company profit & loss statements, balance sheets, and a neat breakdown of your current year-to-date performance (via Xero reports or management accounts). 2. **Engage a Independent Mortgage Broker:** Because you are a contractor, working with a broker (at no direct cost to you, as they are paid commission by the lender) is invaluable. They can simultaneously pitch your profile to multiple lenders (e.g., comparing how ANZ versus Kiwibank will calculate your specific contracting income) to find who will offer you the highest borrowing limit. 3. **Get Conditional Pre-Approval:** Before house-hunting in Dunedin, secure a formal conditional pre-approval so you can bid at auction or make unconditional offers with absolute confidence. Are you operating as a sole trader or through a limited liability company, and are most of your earnings distributed out to yourself or retained in the business? --- ## gemini · Wellington Answer ID: aa9fa4f9-3c49-4ade-9d7e-2b08674f094e Buying your first home as a self-employed contractor in New Zealand with **three years of earnings records and a 20% deposit** puts you in a much stronger position than many first-time buyers. Because you meet the magic 20% deposit threshold, you bypass the Reserve Bank's strict low-equity restrictions and avoid costly low-equity margins or insurance premiums. Furthermore, having three full years of accounts satisfies the standard risk-averse criteria of major retail banks. --- ## Lender Categories & Recommendations ### 1. Main Major Banks (ANZ, ASB, BNZ, Westpac) * **Why they fit:** With 3 years of trading history and a 20% deposit, you have full access to the mainstream retail banks. They offer the most competitive standard interest rates and lucrative cash-back incentives (often between 0.85% to 1.00% of the loan amount for first-home buyers). * **The Catch:** Main banks can be bureaucratic and rigid regarding *how* they calculate your income. While accountants often minimize taxable net profit to reduce your tax bill, banks look closely at that bottom line. However, they will review legitimate **add-backs** (such as depreciation, one-off expenses, or personal vehicle expenses run through the business) to bolster your true usable income. * **Best approach:** Choose a major bank if your net profit (plus allowable add-backs) comfortably covers their serviceability calculators. ### 2. Tier-Two / Challenger Banks (The Co-operative Bank, TSB, SBS Bank) * **Why they fit:** These institutions are often more pragmatic and relationship-focused than the major four banks. They frequently look at the "human story" behind a contractor's income rather than rigidly plugging numbers into an automated credit scoring model. * **The Advantage:** If your income fluctuated across those three years—say, year two dipped due to a lost client, but year three rebounded strongly—smaller local banks or building societies are usually more willing to look at the upward trajectory and average or weight the income more favorably. ### 3. Non-Bank Lenders (Resimac, Pepper Money, Basecorp) * **Why they fit:** Generally reserved for complex or lower-deposit situations, non-bank lenders *can* be an alternative if your accountant structured your tax returns in a way that shows very low taxable income. * **The Catch:** Because you already have a 20% deposit and 3 years of history, **you likely do not need a non-bank lender.** Using them would typically subject you to higher interest rates (often 1% to 2% higher than main banks) and establishment fees. Reserve these only if a mainstream bank declines you due to complex tax structures. --- ## Structured Action Plan 1. **Work with your accountant to prepare a "Lender-Ready" pack:** Have your last 3 years of finalized financial statements (Profit & Loss, Balance Sheet) and matching IR3 personal tax returns ready. Ask your accountant to explicitly itemize a schedule of **add-backs** (non-cash costs like depreciation). 2. **Organize 6 months of business and personal bank statements:** Lenders want to see healthy day-to-day cash flow and stable operational habits. 3. **Engage a mortgage broker (Free of charge to you):** For self-employed applicants, a good broker who understands commercial lending is invaluable. They can submit your financials to multiple lenders simultaneously (such as a major bank and a challenger bank) to see who offers the highest borrowing capacity and the best cash-back deal, without you having to shop around individually. Would you like to explore how lenders calculate self-employed serviceability based on net profit versus gross contract revenue? --- ## ai-mode Answer ID: bb73d309-cc21-4b8b-bf2d-d28580b3172b With three full years of contracting earnings records and a solid 20% deposit, you are in a much stronger position than a newly self-employed buyer. Most mainstream lenders view three years of continuity as an established track record, and a 20% deposit means you sit outside heavy Reserve Bank LVR (Loan-to-Value Ratio) speed-limit restrictions, giving you access to standard residential interest rates. However, because your income is variable, different mainstream lenders treat "how" they calculate your usable income quite differently (e.g., averaging the three years, taking the lowest year, or looking closely at net profit versus retained earnings). * * * Recommended Lender Categories & Why * * **Major Retail Banks (ANZ, ASB, BNZ, Westpac):** * _Why:_ They generally offer the most competitive carded or special interest rates and have clear first-home buyer cash contributions or flybuys/rewards (like ANZ First Home Buyer Bonus or cashbacks if applicable). * _The Catch:_ Their credit risk teams can be rigid with variable income. They will want to scrutinise 3 years of IR3 tax returns, matching GST returns, and accountant-prepared profit and loss statements. If your income dipped in one of those three years, some major banks will conservatively base your borrowing capacity on the lowest year rather than an average. * **Kiwibank:** * _Why:_ As a locally owned Kiwibank option, their mobile mortgage managers and underwriters often show more flexibility and pragmatic common sense when reviewing local small business and contractor structures compared to some of the major Australian-owned banks. They are often more willing to look at the "story" behind variable contract cash flows if your accountant presents a clean, comprehensive picture. [www.globalfinance.co.nz] * **Second-Tier / Non-Bank Lenders (e.g., Pepper Money, Liberty Financial, Avanti Finance):** * _Why:_ Mentioned only as a backup if your contracting structure involves complex tax write-offs, retained earnings, or provisional tax setups that make a major bank say "no". * _The Catch:_ With a 20% deposit and 3 years of history, **you likely do not need these.** Non-bank lenders charge higher interest rates and are designed for people with less than 2 years of history or blemished credit. Avoid them unless a mainstream bank unreasonably stalls your application. [MoneyHub NZ] * * * * Key Focus Areas for Your Application 1. **Income Averaging vs. Add-Backs:** Ensure your accountant prepares a clean 1-page business/contractor summary explaining the fluctuations. Lenders will look at net taxable profit, but may "add back" certain non-cash items (like depreciation or specific one-off expenses) to elevate your serviceable income. [MoneyHub NZ] 2. **Gaps and Contracts:** Be ready to show current active contracts or a steady pipeline of work. Proving that your variable income still meets a reliable baseline floor is key to passing serviceability tests. 3. **Personal vs. Business Debt:** Ensure any vehicle finance, equipment leases, or business credit lines are neatly accounted for, as banks factor these heavily into reducing your maximum borrowing limit. [Loan Market NZ] If you'd like to narrow this down further, tell me: * Are your earnings **trending upward** over the last 3 years, or did you have a lower year in the middle? * Are you working with a **mortgage broker** , or applying directly to a bank? I can give you more targeted tips on **how to present your income structure** to avoid a conservative bank assessment. --- ## ai-mode · Auckland Answer ID: 761546e6-f3d3-4f7b-93b2-2be650bc7bea Buying a home as a contractor with a solid **3-year earnings record** and a **20% deposit** puts you in a much stronger position than someone just starting out. Having three years of history satisfies most major lenders' preference for seeing stability through multiple economic or seasonal cycles. However, how banks calculate your "usable" income can still vary significantly based on your structure (sole trader, company, or LITC) and how your accountant manages write-offs. With a 20% deposit, you bypass standard Reserve Bank LVR (Loan-to-Value Ratio) speed-limit restrictions and avoid expensive Low Equity Margins or premiums, giving you broad access to the retail banking market. [MoneyHub NZ] * * * Recommended Lender Categories & Why 1\. Major Retail Banks (ANZ, ASB, BNZ, Westpac) * * **Why they fit:** With a 20% deposit and 3 years of financials, you meet their baseline policy requirements. They generally offer the most competitive interest rates and standard cashback offers for first-home buyers. [MoneyHub NZ] * **The Catch:** Major banks can be rigid with their calculators. They typically look at your average net taxable income over the last 2 years, or take the lower of the two years, and they will add back specific non-cash items (like depreciation) carefully. If your accountant aggressively minimized your taxable profit, a major bank might calculate a lower borrowing capacity than you actually take home in cash flow. [MoneyHub NZ] * **Best approached if:** Your taxable net profit plus standard add-backs comfortably supports the mortgage repayments you are applying for. [MoneyHub NZ] * 2\. Kiwibank * * **Why they fit:** Kiwibank is often perceived as slightly more pragmatic and flexible when dealing with non-standard income streams or first-home buyers transitioning from self-employment/contracting. They still adhere to strict servicing rules, but their credit teams can be more approachable via a mortgage adviser in interpreting complex IR3s and GST returns. * **The Catch:** Turnaround times for approvals can occasionally lag behind the major four Aussie-owned banks during peak volume periods. * 3\. Non-Bank Lenders (e.g., Liberty Financial, Pepper Money, or Resimac) * * **Why they fit:** If your 3 years of accounts show complex structures, heavy retained earnings in a company, or lower declared net profit due to legitimate business write-offs, non-bank lenders offer alternative documentation ("alt-doc") options. They can use 6 months of business or GST bank statements to gauge your true cash flow rather than relying solely on your end-of-year tax returns. * **The Catch:** Their interest rates are typically higher than main retail banks, and they may charge application or settlement fees. * **Best approached if:** The mainstream banks decline your application or severely "shade" your income below what you realistically earn. * * * * Key Preparation Steps for Your Application 1. **Get your paperwork lender-ready:** Ensure your IR3 tax returns, Notice of Assessments (NOAs) from Inland Revenue for the past 3 years, and up-to-date interim management accounts (if applicable) are polished and organized. [MoneyHub NZ] 2. **Highlight cash flow consistency:** Be prepared to show consecutive contract history, letters of renewal or high industry demand if your specific contract is near a renewal date. [mortgagesuite.co.nz] 3. **Use a mortgage adviser:** Navigating how different bank algorithms treat contractor income is nuanced. An independent mortgage broker can input your numbers into multiple bank calculators simultaneously without affecting your credit score, matching your specific financial profile to the most accommodating credit team. If you'd like to narrow this down, let me know: * Are you operating as a **sole trader, independent contractor, or through a company/company structure**? * Is your **taxable net profit** on paper significantly lower than your actual cash intake? I can help you outline how different lenders will approach your specific **borrowing capacity**. --- ## ai-mode · Christchurch Answer ID: 907e57a2-7bd9-4f26-b4f5-94d9b31d6da8 With three solid years of earnings records and a healthy 20% deposit, you are in a much stronger position than a newly self-employed contractor. Having a 20% deposit also means you bypass strict Low Deposit/LVR restrictions and avoid paying expensive Low Equity Margins (LEM) on your interest rate. However, major retail banks in New Zealand evaluate variable contractor income differently than standard PAYE salary income. They generally average your net taxable income over the past two to three years, or lean heavily on the most recent lower year if there's a downward trend. Recommended lending options and profiles for your situation: * * **Major Mainstream Banks (ANZ, ASB, BNZ, Westpac):** * _Why:_ They offer the most competitive market interest rates and potential cash contributions (cashback) for first-home buyers with a 20% deposit. * _The Fit:_ Because you have three years of records, you meet their standard requirement of 2 years minimum historical financials (IR3s, GST returns, and end-of-financial-year statements). * _Tip:_ **ANZ** and **ASB** are often noted by brokers as having pragmatic mobile mortgage managers who understand standard contracting structures, provided your accountant has optimized your taxable income cleanly. * **Kiwibank:** * _Why:_ As a state-owned bank, Kiwibank tends to have a slightly more flexible, common-sense approach to local first-home buyers compared to some of the larger Australian-owned parents, though their credit policies remain thorough. * _The Fit:_ They are well-regarded for working through fluctuating income streams if you can demonstrate consistent historical averages and clean, low-debt business bank statements. [The Mortgage Hub] * **Regional and Challenger Banks (SBS Bank, The Co-operative Bank):** * _Why:_ Smaller New Zealand-owned institutions often review applications on a case-by-case basis rather than relying purely on an automated, rigid credit-scoring scorecard. * _The Fit:_ If your variable income dipped slightly in one of those three years due to industry shifts or a gap between contracts, these lenders are often more willing to sit down, look at the narrative behind the numbers, and evaluate your ongoing contract pipeline. * **Non-Bank Lenders (Pepper Money, Liberty Financial, Avanti Finance) — _Backup Option only_ :** * _Why:_ They specialize in variable, complex, or non-standard income and use "alt-doc" verification. * _The Fit:_ You likely **do not** need a non-bank lender given your 3-year history and 20% deposit. Avoid them unless a major bank turns you down, as their interest rates are typically higher. * To help narrow down which specific lender or local mobile manager in Christchurch would treat your application best, tell me: * Are you operating as a **sole trader** or through a **company/trust structure**? * Is your net taxable income **trending upward, stable, or fluctuating wildly** across those 3 years? --- ## ai-mode · Dunedin Answer ID: 56fd966c-d218-4a22-8fd1-42c885f9021f Having a **20% deposit** and **three years of earning records** puts you in a strong position as a contractor buying your first home in New Zealand. While major retail banks view variable contractor income more conservatively than PAYG income, three years of history satisfies the standard 2-year trading benchmark most lenders look for. The right lender depends heavily on how your accountant structured your taxable income versus your actual cash flow. [DormFIN] Recommended Lender Categories & Why * * **Major Retail Banks (ANZ, ASB, BNZ, Westpac, Kiwibank):** * **Why:** They offer the most competitive interest rates and standard cash contributions (welcome cashback) for first-home buyers with a 20% deposit. * **The Catch:** They rely strictly on your final net taxable income (after accountant write-offs and tax deductions). If your taxable income fluctuates or is shown as minimal on your IR3 / financial statements to minimize tax, a major bank's servicing calculator might offer you a lower borrowing capacity. * **Best if:** Your net profit/taxable income over the last 2 to 3 years comfortably supports the mortgage repayments you are applying for. * **Second-Tier / Specialist Lenders (TSB or SBS Bank):** * **Why:** These smaller or regional/mutual banks often have more flexible, common-sense credit policies. Their underwriters are generally more willing to manually review variable contractor income, look at ongoing contracts, or consider retained earnings/add-backs than the rigid automated scoring systems of major four banks. * **Best if:** Your income took a dip in one of the three years, or your accountant maximized deductions that don't truly reflect your day-to-day cash flow stability. * **Non-Bank Lenders (Pepper Money, Liberty Financial, Avanti Finance):** * **Why:** Non-banks specialize in non-standard income structures and can evaluate complex financial statements or recent contract transitions. * **The Catch:** Their interest rates are generally higher than mainstream banks. * **Best if:** Major banks decline you or offer significantly lower borrowing limits due to your variable structure, and you need a stepping-stone lender for 1–2 years before refinancing to a main bank. [MoneyHub NZ] * Key Factors Lenders Will Scrutinize * * **Taxable Income vs. Turnover:** Lenders assess what you declare to IRD, not total business revenue. [DormFIN] * **Industry & Contract Stability:** Having continuous contracts, repeating clients, or transitioning from a PAYG role into contracting within the same industry counts heavily in your favor. [DormFIN] * **GST and IR3 Records:** Expect to provide 2–3 years of IR3 tax summaries, accountant-prepared profit and loss statements, and recent business/personal bank statements. Guidance on self-employed documentation is detailed further on MoneyHub NZ. Contractor or Self-employed or New Business Owner with irregular income or having less than 2 years in business? How to get home loan from the bank? - Global Finance * To help narrow down which specific lender or mortgage strategy fits best, tell me: * Is your taxable income on your IR3 **consistent and high enough** to match the size of the loan you want? * Do you work with a **mortgage broker** , or are you planning to apply directly to the banks? --- ## ai-mode · Wellington Answer ID: 1532585c-c6e6-4270-b094-15b7db0d9592 With **three years of earnings records** and a solid **20% deposit** , you are in a strong position compared to many first-home buyers starting out with irregular income. Having 36 months of history means you clear the standard 2-year hurdle most major retail banks look for. However, how lenders calculate your usable income from variable contractor earnings can still vary significantly. Major Retail Banks vs. Non-Bank Lenders * * **Major New Zealand Banks (ANZ, ASB, BNZ, Kiwibank, Westpac):** These are your best first port of call because your 20% deposit and 3-year track record satisfy their core policy requirements. They generally average your net profit over the last two years, or look closely at the trajectory of your IR3 tax returns and accountant-prepared financials. * **Non-Bank Lenders (e.g., Pepper Money NZ, Liberty Financial):** These institutions specialize in alternative documentation or more complex self-employed scenarios. Because you have three clean years and a 20% deposit, you likely **do not** need a non-bank lender unless your taxable net profit looks artificially low due to aggressive business write-offs. Main banks will give you much sharper, more competitive interest rates. * Why the Choice of Bank Matters for Contractors Even with three years of history, major banks treat contractor income differently based on how you draw your money (PAYE vs. shareholder salary vs. sole trader) and how your accountant structures your financials: * * **Kiwibank:** Often viewed as pragmatic for first-home buyers and flexible with non-standard income structures, provided the last two years of IR3s show stability. * **ASB & ANZ:** Have robust credit teams familiar with IT, construction, and corporate contractors, but they scrutinize "add-backs" (depreciation, one-off expenses) closely. They like to see consistent or upward-trending income. * **BNZ & Westpac:** Solid options, though their appetite can shift depending on the specific industry you contract in. * Recommended Strategy Rather than picking a single bank upfront, your best approach as a single contractor buying alone is to work with a **free mortgage broker**. A broker can take your specific set of 3-year financials to multiple lenders simultaneously to see who applies the most favorable servicing calculator to your variable income. You can read more about how income assessment works via MoneyHub's Self-Employed Mortgages Guide or look into broker insights via agencies like Global Finance. If you can share: * Your **industry or contracting type** (e.g., IT, construction, consulting) * Whether you operate as a **sole trader** or through a **company/look-through company (LTC)** I can give you a better idea of how a bank's credit manager will analyze your numbers. --- ## ai-overviews Answer ID: ae4d15eb-78d9-4583-af07-57458c48a6da As a contractor with **three years of earning records** and a **20% deposit** , you are in an excellent position to secure a home loan in New Zealand. Mainstream banks typically require at least two years of financial history for variable income, meaning you can qualify for the most competitive tier-one retail interest rates while bypassing low-equity premiums. Lenders assess contractors differently based on how they calculate variable income, which is why matching with the right option is crucial. 1\. Mainstream Retail Banks (Best Interest Rates) Since you meet the gold-standard two-year financial history requirement, your first stop should be the primary retail banks, as they offer the lowest standard interest rates. However, their income averaging formulas vary: * **Kiwibank:** Historically noted for being more flexible and accommodating with self-employed and contract-based income structures. * **ANZ & ASB:** Both maintain **dedicated specialist income teams** to manually evaluate complex, variable, or contractor-specific financial files. They will generally average your last two or three years of earnings, or use the lower of the most recent years, depending on your trajectory. * **Westpac & BNZ:** Good alternatives, but they closely scrutinize the continuity of your contracts, your industry tenure, and the gaps between engagements. 2\. Specialist Non-Bank Lenders (Best for High Volatility) If mainstream banks try to heavily "shade" (reduce) your variable income or decline you because your most recent year fluctuated significantly downward, specialist lenders take a more human, non-algorithmic approach. They offer tailored contractor products, though their interest rates and setup fees can be slightly higher. * **Pepper Money NZ:** Highly regarded for their Self-Employed Home Loan Programs. They look heavily at current cash flow and are excellent if you require an Alt-Doc (Alternative Documentation) approach using GST returns or recent bank statements instead of standard full financial accounts. * **Resimac & Liberty Financial:** Widely used by mortgage advisers for contractors with complex profiles. They have highly flexible guidelines regarding how irregular income is calculated and are less restrictive about historical dips. * * * How Your Application Will Be Evaluated Assessment Factor| What Lenders Look For ---|--- **Income Verification**| They will request your **IR3 tax returns** , profit-and-loss statements, and potentially 6 months of business bank statements. **Income Calculation**| Most lenders take the net profit and factor back in "add-backs" (such as depreciation, home office expenses, and business vehicle write-offs) to boost your borrowing power. **Contract Continuity**| They will look at your professional CV to see if you have a stable footprint in your industry, a history of back-to-back contracts, or upcoming verified work. Recommended Next Step Because every bank uses a slightly different calculator to determine your "usable income," a single contractor's files can lead to completely different maximum borrowing limits from one bank to the next. It is highly recommended to engage a **mortgage adviser (broker)** who specializes in self-employed and contractor lending. They can run your numbers through multiple bank calculators concurrently to ensure you get tier-one bank rates without risk of a flat refusal. If you would like to map out your application, tell me: * What **industry or profession** do you contract in? * Has your income **increased, decreased, or stayed steady** over the last three years? * Do you operate as a **sole trader** or through a **registered company**? --- ## ai-overviews · Auckland Answer ID: f258cdf4-98f1-4f7a-9df8-2c661677b89b With **three years of clean financial records** and a solid **20% deposit** , your best strategy is to target New Zealand’s major Tier 1 banks—specifically **Kiwibank, ANZ, and ASB** —rather than non-bank alternative lenders. Because you exceed the standard two-year self-employed history benchmark, you qualify for standard market interest rates and avoid low-equity premium penalties. * * * Top Recommended Lenders Lender| Why They Fit Your Profile| Underwriting Approach ---|---|--- **Kiwibank**| **Most Receptive Tier 1:** Known in the NZ market for a more collaborative approach to assessing self-employed and solo contractor applications.| Manually reviews income consistency and industry experience rather than relying strictly on automated credit scoring. **ANZ & ASB**| **Dedicated Specialist Teams:** Both institutions maintain specialized income assessment teams specifically to parse complex, fluctuating contractor files.| They typically average your last two to three years of net profit, ensuring a single down-month does not disqualify you. **Resimac / Liberty** _(Backup Only)_| **Alternative/Non-Bank Option:** Use only if a major bank rejects your file due to extreme variations in your recent cash flow.| "Common sense" lending that accepts broader proof (like GST returns), but charges higher interest rates and setup fees. * * * How Banks Will Assess Your Variable Income * **Net Profit vs. Gross Turnover:** Lenders assess your borrowing capacity using **net profit after business expenses** (from your IR3 tax returns), not your gross contract rate. * **The Conservatism Rule:** If your income has grown steadily over 3 years, banks will likely average the figures. If your most recent year shows a drop, they will usually default to that **lowest, most recent figure** to be safe. * **Add-Backs:** Ensure your accountant explicitly highlights "add-backs" like home office deductions, depreciation, or one-off business expenses, as banks can add these back to increase your official servicing income. * * * Actionable Next Steps 1. **Engage a Mortgage Broker:** Do not apply to multiple banks directly. A broker who specializes in self-employed clients can package your 3-year history cleanly and present it to the specific bank currently offering the best policy for contractors. 2. **Gather the Documentation Triad:** Have your last 3 years of [IRD tax summaries](https://www.ird.govt.nz/), certified financial statements (Profit & Loss and Balance Sheets), and 6 months of personal/business bank statements ready. To help narrow down your borrowing capacity, what is your approximate **annual net profit range** over these three years, and do you have any **existing debt or fixed business liabilities**? --- ## ai-overviews · Christchurch Answer ID: 3c3a795e-f4be-436f-8e82-da6d2210af71 For a sole contractor with variable income, **your 20% deposit puts you in an excellent position** because it completely bypasses the Reserve Bank's strict low-deposit restrictions. However, because your income fluctuates, major banks will heavily scrutinize how your income is verified. Having **three years of solid earnings records** fulfills the standard requirement for most New Zealand lenders, who typically request at least two full years of financial statements or IR3 tax returns. * * * Recommended Mainstream Banks (Tier 1) If your three years of financials show steady or rising net profits, mainstream banks will offer you the lowest interest rates. When evaluating variable income, major banks usually average your profits over the last two to three years or use the lower of the two most recent years. * **ANZ or Westpac:** These large institutions have dedicated commercial and self-employed mobile mortgage managers. They are highly experienced in "add-back" calculations. They can add non-cash expenses (like depreciation or home office deductions) back into your net profit to artificially raise your borrowing capacity. * **Kiwibank:** As a New Zealand-owned bank, Kiwibank is highly competitive for first-home buyers. They are historically a good option if your income variation matches predictable, seasonal, or industry-specific patterns, provided your overall debt-to-income ratio fits their standard criteria. Recommended Non-Bank Lenders (Tier 2 Alternative) If your income fluctuates significantly—such as a major drop in one year followed by a spike—mainstream banks might sharply reduce the income figure they use to test your affordability. In this scenario, non-bank lenders are highly recommended. * **Pepper Money, Liberty Financial, or Avanti Finance:** These are non-bank or "near-prime" lenders specializing in "Alt-Doc" (Alternative Documentation) loans. Instead of relying strictly on formal IR3 tax returns, they can assess your income using 6 to 12 months of recent business bank statements or current client contracts. * **Why choose them:** They offer higher flexibility for variable contractor structures. The trade-off is that they typically charge a slightly higher interest rate or an upfront establishment fee compared to Tier 1 banks. * * * Strategic Recommendations for Your Next Steps Strategy| Action Item| Why It Matters ---|---|--- **Engage a Mortgage Broker**| Partner with a local Christchurch broker.| They know exactly which specific bank credit managers are "contractor-friendly" and will package your application to minimize the appearance of risk. **Structure an Offset Portion**| Request a "Split" or "Offset" loan structure.| Because your income is variable, you can keep surplus cash from high-earning months in a linked savings account to instantly reduce your mortgage interest without locking the money away. **Calculate True Net Income**| Work with an accountant to find your "Net Profit + Add-backs".| Banks do not look at your gross turnover; they assess your borrowing capacity purely on your taxable net profit. * * * To help me narrow down which specific lender policy matches your setup, could you tell me: * What **industry or sector** do you contract in? * Is your business registered as a **Sole Trader** or a **Look-Through Company (LTC)**? * Have your last three years of earnings been **relatively steady** , or was there a **significant spike/drop** in a specific year? --- ## ai-overviews · Dunedin Answer ID: 7b56f0d6-92e5-49f8-ae3b-14290fff367d Buying your first home on your own in Dunedin with a **20% deposit** puts you in a strong position. Because you have a healthy deposit, you easily bypass the strict Reserve Bank low-deposit lending speed limits. However, as a contractor with variable income, your main challenge is "serviceability"—proving to a bank's calculators that you can reliably afford the repayments despite your fluctuating earnings. Having **three years of solid earnings records** is an absolute game-changer. Most New Zealand lenders only require two years of financial history for self-employed individuals or contractors, meaning your file is robust and ready for underwriting. Here is how New Zealand's top tiers of lenders will view your application and which ones are recommended for your situation. * * * 1\. Mainstream "Tier 1" Banks (Best Interest Rates) Because you have a 20% deposit and three years of continuous history, your first stop should be the major banks. They offer the lowest interest rates and standard cash-back incentives. However, they assess variable income very differently: * **ANZ:** As NZ's largest home lender, **ANZ** is highly recommended if your three-year income trend is steady or increasing. They typically average your last two years of net profit/contract earnings. If your most recent year is significantly lower, they will generally use that lower figure to be safe. * **BNZ:** **BNZ** is known for having slightly more pragmatic calculators when it comes to self-employed and contract income. They are often preferred by mortgage brokers for applicants who don't fit the standard corporate single-salary mold, as long as the three-year history shows structural stability. * **Kiwibank:** As a New Zealand-owned option, **Kiwibank** is deeply committed to first-home buyers. They will look closely at the sustainability of your industry in Dunedin and your historical expenses to judge your true borrowing power. 2\. "Tier 2" Non-Bank Lenders (Best for Flexibility) If mainstream banks apply a heavy "haircut" to your variable income (e.g., shaving 20% off your averaged earnings to account for volatility) and your borrowing capacity falls short, **Tier 2 non-bank lenders** are excellent alternatives. * **Resimac & Liberty Financial:** These non-bank lenders specialize in self-employed and variable-income borrowers. They don't just put your numbers into an automated calculator; they manually underwrite files. They will look at the full picture of your three-year history, acknowledge your strong 20% equity position, and are much more likely to accept your actual average earnings without aggressive shading. * _Note on Cost:_ Rates with Tier 2 lenders can be 0.5% to 1.5% higher than major banks, but they offer a great bridge to get into the Dunedin market, with the option to refinance to a main bank later once your mortgage track record is established. * * * Comparison of Lending Routes Feature| Tier 1 Major Banks (ANZ, BNZ, Kiwibank)| Tier 2 Non-Bank Lenders (Resimac, Liberty) ---|---|--- **Interest Rates**| Lowest market rates| Slightly higher (premium for risk) **Income Assessment**| Strict averaging; may default to the lowest year| Flexible; looks at industry longevity and overall cash flow **DTI Limits**| Subject to strict **6x Debt-to-Income (DTI)** caps| More flexible on DTI limits if serviceability clears **Perks**| Cash-back incentives available| Minimal to no cash-back offers * * * ⚠️ Crucial Blind Spots to Anticipate * **The 6x DTI Cap:** The Reserve Bank’s **Debt-to-Income (DTI) restrictions** limit your maximum borrowing to **6 times your annual income**. If your averaged variable net income comes out to $90,000, a Tier 1 bank will cap your maximum loan at $540,000, regardless of how large your deposit is. * **Gross vs. Net Profit:** Banks look at your _net profit before tax_ (income after business expenses), not your gross contract turnover. If you write off heavy expenses to reduce your tax bill, you inadvertently reduce your borrowing power. * **Dunedin Property Specifics:** If you are looking at a central Dunedin apartment or a townhouse under 40 sqm, banks may demand a higher deposit or tighten terms. Standard standalone homes in areas like South Dunedin, Forbury, or Mosgiel will face much smoother appraisal processing. 🛠️ Next Mechanical Steps to Take 1. **Engage a Dunedin Mortgage Broker:** Do not apply to banks individually. A local mortgage broker (such as Loan Market Dunedin or a local independent firm) will package your three years of accounts and pitch them to the specific bank whose current policy favors your exact industry. This service is free to you. 2. **Gather Your "Clean" Tech Stack:** Prepare your last 3 years of IR3 Income Summaries, full Financial Statements (Profit & Loss), and your current active contracting agreement. 3. **Clean Up Three Months of Bank Statements:** Ensure no unarranged overdrafts, buy-now-pay-later (Laybuy/Afterpay) usage, or erratic spending show up on your personal bank accounts, as Tier 1 banks scrutinize these tightly under current responsible lending guidelines. To help me narrow down your maximum purchasing budget, could you tell me your **average annual net income** over the last three years, and whether your income is currently **trending up, down, or remaining steady**? --- ## ai-overviews · Wellington Answer ID: e51ff3ca-9a7b-4c25-ac2a-f71bb3985a0d As a sole contractor with variable income, having a **three-year earnings record and a 20% deposit** puts you in a highly favorable position with New Zealand lenders. Because you have a full 20% deposit, you bypass the restrictive low-deposit rules (LVR restrictions), and your three years of solid records satisfy the standard two-year financial history requirement most banks mandate for self-employed applicants. My primary strategy would be to approach **mainstream Tier 1 banks** first, as they offer the lowest interest rates and your comprehensive documentation makes you a prime candidate for standard approval. * * * Top Lender Recommendations for Self-Employed Contractors 1\. ANZ and Westpac (Tier 1 – Best for Flexible Income Averaging) * **Why them:** [ANZ](https://www.anz.co.nz) and [Westpac](https://www.westpac.co.nz) have the most robust and established frameworks for evaluating self-employed and contract income in New Zealand. * **Income Calculation:** They will typically look at your last two to three years of financial statements and either average the net profit or use the most recent year if it shows stable growth. * **Pricing:** You will qualify for their competitive "special" advertised interest rates because your Loan-to-Value Ratio (LVR) is exactly at or below 80%. 2\. BNZ (Tier 1 – Best for Industry-Specific Contracting) * **Why them:** [BNZ](https://www.bnz.co.nz) is highly accommodating if your contracting is structured around consistent line-by-line contract renewals (common in IT, government consulting, or project management in Wellington). * **Income Calculation:** If your daily or hourly contract rate is clearly stated in a current, long-term contract, BNZ can sometimes look at your current gross contract rate minus a buffer for operational expenses, rather than strictly relying on historical averages. 3\. Resimac or Liberty Financial (Tier 2 – Non-Bank Alternative) * **Why them:** If your income fluctuated dramatically over those three years (e.g., a very low year followed by an exceptionally high year), mainstream banks might calculate your borrowing power based on the lowest year. Non-bank lenders like Resimac or Liberty are specialists in "alt-doc" or flexible servicing. * **Income Calculation:** They are willing to look at the holistic story of your business or take a shorter-term snapshot (like the last 12 months) to assess your actual ability to pay. * **Trigger to use them:** Only look here if Tier 1 banks decline your file or drastically cut your borrowing capacity due to your income variance. Expect slightly higher interest rates or setup fees. * * * Strategic Action Plan to Maximize Your Borrowing Power To ensure a smooth approval process, your application must be structured flawlessly before submission: * **Normalize Your Financials:** Work with your accountant to present your last three years of IR3 summaries and full financial statements. Avoid claiming excessive, one-off business expenses in your most recent year, as banks calculate your borrowing power based on _net taxable profit_ , not gross turnover. * **Isolate Wellington-Specific Property Risks:** Since you are buying in Wellington, ensure the properties you look at do not have high-risk indicators that scare lenders—specifically **earthquake prone ratings (IEP percentages)** or **exorbitant body corporate/insurance levies** , which banks directly subtract from your servicing capacity. * **Engage a Mortgage Broker:** Do not apply to these banks directly. A specialized mortgage broker will package your variable income, write a compelling cover letter explaining your industry stability, and pitch it to the specific credit underwriters most favorable to your unique income structure. * * * If you'd like to narrow down exactly how much you can borrow, let me know: * What is your **line of work / industry** in Wellington? * What was your **net profit range** over the last two years? * Do you have any **business debt** or personal liabilities (e.g., student loans)? I can help you estimate your exact serviceability framework based on these details.