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Self-employed shut out from home loan deals: Pepper

Self-employed borrowers have been unable to access many current lender home loan promotions due to the stringent criteria, according to one lender.

Pepper Money general manager, mortgages and commercial lending, Aaron Milburn said that self-employed borrowers have been missing out on the majority of lender promotions despite being among the hardest hit in 2020.

Commenting on this trend, Mr Milburn said: “Everyone’s talking about record-low interest rates, and the plethora of cashback promotions out in market, but if a self-employed borrower is looking to buy a new home, refinance or pay outstanding tax debts, these offers aren’t always available to them.

“Although many Australians have made the leap to being self-employed, the banks haven’t really moved with them – particularly when it comes to lending them money. So, for the self-employed, proof of ‘standard income’ is often something they don’t have when it comes to applying for a home loan.”

Pepper Money also noted that it is currently offering a range of discounts on its prime, near-prime and specialist home loan products for their full-doc and alt-doc customers until 31 January 2021.


For self-employed customers in particular, the lender is offering an interest rate of 2.99 per cent per annum (comparison rate: 3.19 per cent per annum) on all prime alt doc loans up to 55 per cent loan-to-value ratio (LVR).

The lender is also offering zero mortgage risk fees for all near-prime alt-doc loans up to 70 per cent LVR, along with no title protection fee.

According to the lender, this would equate to nearly $6,000 for a self-employed near-prime customer looking to take out a $500,000 loan with a 70 per cent LVR.

Self-employed near prime customers will be offered interest rates from 3.69 per cent per annum (3.97 per cent per annum comparison rate).

“Whether a customer is refinancing, rebuilding or recovering, people are simply looking to improve their situation in life, and the way someone chooses to work shouldn’t be an impediment to getting ahead,” Mr Milburn concluded.


[Related: Lender resumes lending to hardest-hit industries]

Self-employed shut out from home loan deals: Pepper
Self-employed shut out from home loan deals: Pepper

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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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