Low doc home loans are pitched specifically at borrowers who are unable to meet a lenders’ traditional proof of income requirements. Low doc loans are considered risky investments so most major banks and lenders will avoid offering one.
Nowadays, low doc loans are much more challenging to obtain than others, including some loans to refinance existing mortgages or loans without BAS statements to show proof of your declared income. Additionally, self-employed workers endure a more variable/potentially less secure income than employees with regular 9-5 working careers. Low doc loans as a result are seen as higher risk investments by lenders. As a result, low doc loan interest rates are higher than standard home loans and upfront fees may also be more expensive. Therefore, it pays to use a comparison rate calculator when shopping for this type of loan product.