Ubank Now Accepts Sole Traders With Just One Year of Tax Returns — What Australia's Self-Employed Borrowers Need to Know

Key takeaway: Ubank has expanded its home loan access to sole traders who can provide a single year of tax returns, with applications processed via mortgage brokers — marking a shift in how lenders are adapting to Australia's self-employed workforce in 2026.

Why Ubank's Policy Change Matters for Self-Employed Borrowers

For years, Australia's sole traders and self-employed borrowers have faced a two-year documentation wall when applying for home loans. Most major banks require at least two consecutive years of tax returns or financial statements before approving a mortgage for a self-employed borrower.

Ubank's decision to accept a single year of tax returns for eligible sole traders — processed exclusively through the mortgage broker channel — removes that barrier for a growing segment of the market. The move signals that lenders are responding to real demand: Australia's self-employment sector has grown steadily, and a rigid two-year requirement was disqualifying many capable borrowers.

The timing matters: with Australia's cash rate at 4.60% (RBA, September 2026) and cost-of-living pressure affecting household budgets nationwide, borrowers are looking for practical ways to enter or stay in the property market.

What "Simpler Income Checks Via Brokers" Means in Practice

Ubank's policy is targeted specifically at sole traders — individuals operating a business in their own name, not through a company or trust structure. Applications flow through the broker channel only, meaning borrowers must work with an accredited mortgage broker to access the product.

This matters for borrowers to understand: a broker packages the application and presents the single-year tax return alongside supporting documents to Ubank's credit team. The bank still conducts a formal credit assessment — there is no automatic approval. The benefit is a lower documentation threshold, not a bypass of credit standards.

For sole traders with one strong, complete tax return showing stable or growing income, this opens access to mainstream bank lending that was previously unavailable to them.

Where the Limits Still Apply

Even with this relaxation, the one-year tax return policy serves a narrow slice of Australia's self-employed population. Borrowers who still face significant barriers include those who:

• Operate through a company, trust, or partnership structure
• Have minimised taxable income through legitimate deductions, resulting in low reported income
• Are in their first year of ABN registration
• Have irregular, seasonal, or variable income patterns
• Need to present income evidence through BAS statements, accountant's letters, or business bank statements

For these borrowers — a significant portion of Australia's self-employed community — the shift at Ubank changes very little in practice.

"One year of tax returns is a step forward, but it does not resolve the fundamental mismatch between how self-employed Australians actually structure their income and how banks are trained to assess it."

What This Means for Your Mortgage Application

For sole traders with a clean, recent tax return showing strong income, Ubank's new policy is worth exploring through a broker. But for borrowers with more complex income structures, MPFG Capital's Alt Doc loans are built specifically for the full range of self-employed situations — accepting BAS statements, accountant's letters, and bank statements as income evidence, without requiring a formal tax return at all.

Non-bank lenders like MPFG assess your actual capacity to repay based on your real business activity, not just the documents that happen to appear in a tax file.

FAQ

Can a sole trader in Australia get a home loan with only one year of self-employment history?

Yes — Ubank has now opened this option for sole traders via mortgage brokers. Eligibility depends on the strength of your most recent tax return. For sole traders whose tax return does not fully reflect their income, or for those in their first year of trading, non-bank Alt Doc lenders may offer a more accessible pathway using BAS statements or an accountant's letter.

What documents do sole traders typically need for an Australian home loan in 2026?

Requirements vary by lender. Ubank now accepts one year of tax returns for sole traders through brokers. Most major banks still require two years of financials. Non-bank Alt Doc lenders like MPFG Capital accept alternative income evidence — such as 12 months of BAS statements, an accountant's letter, or business bank statements — making them accessible to a broader range of self-employed borrowers.

How is a non-bank Alt Doc loan different from Ubank's sole trader home loan?

Ubank's new policy reduces the documentation threshold for a specific group: sole traders with a solid one-year tax return. A non-bank Alt Doc loan is designed for the full spectrum of self-employed borrowers — including company directors, trust beneficiaries, and those who prefer not to use a tax return as income evidence. MPFG Capital's Bright product is built for exactly this audience, offering more flexible credit structuring alongside alternative documentation pathways.

This article is general information only and does not constitute financial or credit advice. All applications are subject to credit assessment by MPFG Capital (ACL 553698).