Do business expenses reduce how much I can borrow?

Yes. When you're self-employed the bank uses your profit after expenses, so every expense you claim lowers the income it lends against.

What can be added back to my self-employed income?

Most lenders add back depreciation, and some add back one-off costs or interest on debts being paid out. How generous they are varies by lender.

Does the bank use my revenue or my profit?

Your profit. Revenue shows how much went through the business. Profit after expenses is what the bank treats as your income.

Should I claim fewer expenses to borrow more?

That's a conversation for you and your accountant. Showing more income usually means paying more tax, so it's worth planning a year or two before you buy.

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I claim a lot of expenses against my ABN income. Is that going to cut how much I can borrow?

Bayley Clarke · Mortgage broker on the road · Last checked 11 November 2026 · 3 min read

The short answer

Absolutely. When you work for yourself, the bank looks at your profit on paper, not your turnover. Make $200k in revenue, write off $150k in expenses, and on paper you've made $50k. That $50k is the income the bank uses.

We can add back some things, like depreciation, and that can move the needle a little depending on what you're writing off. But as a rule of thumb, what works to save tax doesn't translate well when you're going to ask the bank for money.

The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

How the bank reads your ABN income

For most self-employed loans the bank works off your tax returns and the numbers your accountant lodged. It starts with the profit after expenses, because that's what the business actually left you with on paper. Revenue tells it how busy you are. Profit tells it what you can afford.

So every expense you claim does two jobs. It lowers your tax bill, and it lowers the income the bank will lend against. On $50k of profit, you're being assessed like someone on a $50k wage, even if $200k went through the business account.

What we can add back

Not every expense is real cash out of your pocket. Depreciation is the classic one: it's a tax deduction on paper, but you didn't spend that money this year, so most lenders let us add it back to your income. Some also add back things like one-off costs that won't repeat, or interest on a loan that's being paid out as part of the deal.

How generous lenders are with add-backs varies. Most allow them, some trim the profit figure instead, and a few have a simpler policy with no add-backs at all. Which lender reads your numbers most favourably is part of the job, and it can make a real difference to what you can borrow. It just won't turn $50k back into $200k.

The tug of war with your accountant

Me and your accountant are in a bit of a tug of war, both trying to get you the best result. Your accountant's job is to minimise your tax. If you're buying a property and the whole thing hinges on how much you can borrow, my job is to show as much income as possible.

Those two goals pull in opposite directions. Showing more income to the bank generally means paying more tax, and that's just how the cookie crumbles. If you know a purchase is coming in the next year or two, it's worth having that conversation with your accountant before the next return is lodged, not after.

The honest bit: you can't have it both ways

There isn't a trick that lets you claim everything for tax and then show the bank a bigger number. The bank lends off the same returns the tax office sees. If the expenses are legitimate, claim them, and accept that it shapes what you can borrow.

What you can do is plan it. Know what you're aiming to buy, know roughly what income that needs, and make the call on expenses with that in mind. I'm happy to run the numbers so you and your accountant can make that call with real figures.

Want to see what your ABN income can borrow?

A 30 minute call. We look at your last returns, what can be added back, and what you can borrow now versus after the next return.

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My accountant minimises my tax. So why does the bank say I can't afford anything?

Your accountant gets your taxable income as low as possible.