By Jason Given · May 2026 · 8 min read
David runs a small electrical business in Adelaide. He has been a sole trader for eleven years, employing two apprentices and turning over enough work to support his family comfortably. His tax returns showed an income of around $130,000 per year. He owned a family home in the western suburbs worth approximately $720,000, with a mortgage of $310,000, and an investment property further south valued at $485,000 with $340,000 still owing on it.
When David and his wife separated, the financial picture looked straightforward on paper. There was equity in both properties. Both parties wanted a clean break. Their lawyers drafted Consent Orders that required the investment property to be sold and the family home to be refinanced into David's sole name, with the proceeds from the investment sale and the equity split used to pay his former partner her agreed share. The orders gave them 90 days to complete everything.
Ninety days sounds like enough time. In many cases it is. But when you are self-employed, have two properties to unwind simultaneously, and need a lender to assess your income in the middle of all of it, the timeline becomes very tight.
Privacy note: David is not our client's real name. Identifying details have been changed. The financial scenario and lending outcome are based on a real case, presented here with permission to help others in similar situations understand what is possible.
The situation David walked in with
David contacted us about three weeks after his Consent Orders had been filed. His lawyer had told him to line up a broker quickly because the 90 day clock was already ticking. He had already spoken to his existing bank, one of the big four, and they had declined his refinance application.
The reason for the decline was his most recent Business Activity Statement. David's trade is seasonal. Summer is his busiest period because of air conditioning installations and new builds. The BAS lodged for the January to March quarter showed strong revenue. But the one lodged for April to June, which happened to be the most recent at the time of his application, showed a noticeable dip. This is entirely normal for his trade. Winter is quieter. Every year follows the same pattern.
The bank's credit assessor looked at that single quarter in isolation and determined that David's income had dropped. They could not approve the refinance at the amount he needed. The application was declined, and David was told to reapply when his revenue improved.
"I was gutted," David told us later. "I have been earning good money for over a decade. I have never missed a repayment. But because one quarter was quieter than the last, they said no. And I had a deadline breathing down my neck."
Why self-employed borrowers face a harder path
If you earn a salary, lenders verify your income with a couple of payslips and a letter from your employer. It is clean and predictable. Self-employed borrowers do not have that luxury. Lenders need to see tax returns, often two years' worth, along with Notices of Assessment from the ATO and recent BAS statements. Some lenders also want profit and loss statements or accountant declarations.
The challenge is that every lender interprets this information differently. Some take the lower of the two most recent years. Some average them. Some weight the most recent year more heavily. And some, as David discovered, focus on the most recent BAS quarter and use it to project annual income, regardless of whether that quarter reflects a seasonal low point.
When you add separation into the mix, the complexity multiplies. The refinance is not a straightforward rate switch. It involves removing a borrower from the loan, potentially changing the security property if one property is being sold, and often restructuring the debt to fund a settlement payout. Lenders scrutinise these applications more carefully because the borrower's financial position is changing at the same time as the loan.
Finding the right lender
After reviewing David's full financial picture, we identified several lenders whose self-employed income policies would work better for his situation. The key was finding a lender that would assess his income on a two year average rather than focusing on the most recent quarter in isolation.
David's tax returns told a clear story. His income had been consistent at around $125,000 to $135,000 for the past three years. There was no downward trend. The seasonal pattern was visible and entirely normal for a sole trader in the building trades. A lender willing to average his income across two full financial years would arrive at a figure that comfortably supported the refinance amount he needed.
We submitted the application to a non-major lender with a strong track record in self-employed lending. We included a covering letter from David's accountant confirming the seasonal nature of his revenue, along with three years of BAS statements so the assessor could see the pattern for themselves. We also provided a clear explanation of the separation, the Consent Orders, and the timeline.
"Jason told me upfront that the first bank saying no did not mean every bank would say no," David said. "That was the thing I needed to hear. I thought one decline meant I was done."
Managing two properties at once
While the refinance application was being assessed, the investment property needed to be sold. David's lawyer had structured the Consent Orders so that the investment property sale would happen first, with the net proceeds split according to the agreed percentages. The family home refinance would then complete, removing David's former partner from that mortgage entirely.
Coordinating the two transactions within a 90 day window required careful sequencing. The investment property went on the market in week two. It received an acceptable offer in week five and went to contract. Settlement on that sale was set for week ten. Meanwhile, the refinance application had been lodged in week three and was working through the lender's credit and valuation process.
The risk was that if one transaction stalled, it could derail the other. If the investment property sale fell through, the settlement funds would not be available. If the refinance was delayed, the family home mortgage could not be transferred. We maintained close contact with the selling agent, the conveyancers on both transactions, and the lender's processing team to keep everything aligned.
Going through something similar?
If you are self-employed and facing a separation deadline, a 30 minute conversation can clarify your options and what lenders will realistically consider.
Book a confidential chatThe outcome
The investment property settled on day 68. The net proceeds were distributed according to the Consent Orders, with David's former partner receiving her share directly through the conveyancer's trust account. The refinance on the family home received formal approval on day 74 and settled on day 82 of the 90 day deadline.
David kept his family home. His former partner was removed from the mortgage and received her full entitlement. The new loan was in David's sole name, assessed on his averaged self-employed income, with repayments he could comfortably manage. His business continued without interruption throughout the entire process.
"The whole thing was done with eight days to spare," David said. "I will not pretend it was not stressful. But having someone who understood the self-employed side of things and could actually talk to the lender on my behalf made all the difference. I thought I was going to lose my house."
He did not lose his house. He did not lose his business. And both parties were able to move forward with a clean financial separation, which is ultimately what Consent Orders are designed to achieve.
What David's story shows
A decline from one lender does not close the door. Self-employed income is assessed differently across the lending market, and the right broker will know which lenders suit your specific income pattern. Seasonal dips, business restructures, and variable revenue do not automatically disqualify you. They simply mean the application needs to go to a lender whose credit policy accounts for how self-employed income actually works.
Tight deadlines in Consent Orders are manageable, but only if you start early and have a broker who can coordinate with your legal team, your accountant, and the other professionals involved. Waiting until week six of a 90 day deadline to start looking for finance is a risk that can be avoided.
If you are self-employed and separating, the single most important thing you can do is get your financial position assessed early. Know where you stand before the deadlines start pressing. Know which lenders will work with your income structure. And know what documents you need to have ready so the application can move quickly when the time comes.
Frequently asked questions
Can I get a home loan if I am self-employed and going through separation?
Yes, self-employed borrowers can refinance or obtain a new home loan during separation. Lenders assess self-employed income differently to PAYG income, typically requiring two years of tax returns and recent BAS statements. A broker experienced in separation finance can identify lenders whose income assessment policies suit your specific business structure.
How do lenders assess self-employed income for separation refinancing?
Different lenders use different methods. Some assess income based on the most recent financial year only, while others use a two year average. If your business has seasonal fluctuations or a recent dip in revenue, a lender that averages income over two years may give a more favourable assessment. A mortgage broker can match you with a lender whose policy works for your income pattern.
What happens if a bank declines my separation refinance because I am self-employed?
A decline from one lender does not mean every lender will decline. Different lenders have different credit policies, especially around self-employed income. Non-major lenders and specialist lenders often have more flexible assessment criteria. A broker who understands both separation finance and self-employment can find alternative options and present your application in the strongest possible way.
Last reviewed: May 2026