Home Loans for Contract Based Tech Workers

Working on contract in the tech industry is increasingly common, and for good reason. Contract roles often come with higher day rates, greater flexibility, and the freedom to choose the work that suits you. But when it comes to getting a home loan in Australia, being a contractor can feel like a disadvantage, even when you are earning well above the average salary.

At Tech Home Loans, we work with IT contractors every day and we understand how to present your income in a way that gives you the best chance of approval.

Why Lenders Treat Contractors Differently

Australian lenders categorise borrowers in one of two ways: PAYG (Pay As You Go) employees or self-employed. If you work on contract, regardless of how long you have been contracting or how stable your income is, most lenders will treat you as self-employed. This triggers a different and often more demanding assessment process.

Where a PAYG employee might need only two recent payslips to verify income, a contractor is typically required to provide two years of personal tax returns, two years of business tax returns if operating through a company or trust, an accountant letter confirming your income, and evidence of current and ongoing contracts.

This can be a significant hurdle, particularly if you have recently made the move from permanent employment to contracting, or if your tax returns show a lower taxable income due to legitimate business deductions.

Common Challenges for Tech Contractors

One of the biggest issues contractors face is the gap between what they earn and what their tax return shows. If you run expenses through your business structure, write off equipment, or claim home office costs, your taxable income on paper can look much lower than your actual day rate earnings. Lenders assess serviceability based on taxable income, not gross revenue, which can significantly reduce your borrowing power if you go to the wrong lender.

Contract gaps are another common concern. Even a short break between contracts, whether for a holiday, a transition period, or time spent finding the right next role, can raise questions during an assessment. Some lenders want to see no gaps at all, while others are more flexible depending on your overall profile and industry.

Finally, if you have recently transitioned from permanent to contract work, many lenders want to see at least two years of contracting history before they will consider your income stable enough to lend against.

What Works in Your Favour

The good news is that not all lenders apply the same rules, and the tech industry is increasingly recognised as a high income, low risk sector by lenders who understand it. There are several things that can strengthen your application as a contractor.

A strong day rate and consistent history of contract renewals with the same client demonstrates stability. Operating in a specialist area such as software engineering, cybersecurity, data, or cloud infrastructure shows demand for your skills. Having a current contract in place with at least 6 to 12 months remaining gives lenders confidence in your near term income. And maintaining clean financial records through a good accountant can make the documentation process far smoother.

How We Help Tech Contractors

At Tech Home Loans, we know which lenders are genuinely contractor friendly and which ones will create unnecessary roadblocks. We work around your schedule, because we understand that between client deliverables and project deadlines, finding time during business hours is not always realistic.

We take the time to understand your contracting structure, whether you operate as a sole trader, through a PTY LTD, or as part of a trust arrangement, and we present your application to lenders in a way that accurately reflects your income and your stability as a borrower.

If you are a tech contractor ready to buy a home or invest in property, get in touch with the Tech Home Loans team for an obligation free conversation about your options.

Initial Appointment
Begin by having a chat with one of our qualified Finance & Mortgage Brokers. We will take the time to understand your situation, including special policies specific to Tech Industry Workers. We will also discuss loan options from banks and lenders across Australia, guiding you through the next steps of the application process.

Fact-Finding
We will collaborate with you to gain a comprehensive understanding of your financial situation, including your financials, assets, and credit history. This helps determine your borrowing capacity. We will review your bank statements and other relevant documents to provide accurate advice.

Pre-Approval
Once you receive pre-approval, you can confidently begin bidding or making offers on properties you wish to purchase. We will explain the loan amount, interest rates (both variable and fixed), and potential interest rate discounts. We also discuss the importance of the loan to value ratio (LVR) and any lenders mortgage insurance (LMI) that may be required.

Loan Settlement
Upon settling on the property, your Home Loan will be drawn down, and you will be all set to move forward. We will help you navigate the settlement process. We will also assist in calculating loan repayments and managing your loan interest rate to suit your needs.