Brokers routinely encountering non-standard income are the majority, not the exception
The Australian mortgage market is undergoing a structural shift, as borrower complexity increasingly becomes a defining feature of the modern lending landscape.
That’s according to Aaron Taylor, head of non-standard lending at prominent non-bank lender Bluestone Home Loans.
"What was once considered a specialist segment is increasingly becoming mainstream," Taylor told MPA. "Brokers are telling us that scenarios involving self-employed income, multiple revenue streams, contractor work, variable earnings and non-standard structures are no longer occasional challenges. They are now appearing across everyday lending conversations."
The data backs him up. Bluestone's latest Specialist Lending Opportunity Report found that 85% of brokers frequently encounter deals that fall outside standard credit policy – a figure Taylor reckons is a clear signal that the industry needs to catch up with the realities of how Australians now earn and work.
Australian Bureau of Statistics (ABS) data shows that approximately 2.7 million Australians now report income that varies from one period to the next – a cohort that includes contractors, freelancers, commission-based workers, business owners, and employees relying on overtime or allowances. Traditional tick-box lending models, Taylor argues, were built for a different era.
"Those models were designed for a workforce built around long-term PAYG employment and predictable income," he said. "The reality today is very different. As borrower profiles evolve, the lending market must evolve alongside them.”
Self-employed borrowers remain the hardest to place
For brokers navigating this shift, the self-employed segment remains the most consistently difficult to place. Bluestone's research found that 42% of brokers identified self-employed borrowers as the hardest cohort to work with – a finding that points to a rift between how some lenders assess income and how modern business owners actually operate.
Taylor outlined the friction points most commonly raised by brokers: short Australian Business Number (ABN) lengths, one-year financials, tax debt treatment, trust and company structures, and transitions from PAYG employment into self-employment.
“Importantly, many of these borrowers are financially strong,” said Taylor. “They may have healthy cash flow, growing businesses and strong long-term earning potential, but still fail to meet rigid policy settings designed around traditional income structures.”
For brokers willing to develop expertise in alternative documentation pathways, Taylor sees a clear competitive advantage.
"Brokers who understand how to position complex income scenarios are well placed to support a growing segment of borrowers that many lenders still struggle to assess effectively.”
Policy, not rate, is the barrier
Bluestone's research challenges that assumption that pricing is the primary barrier in complex lending scenarios. Only 29% of brokers identified rates or pricing as the biggest challenge in placing complex deals – suggesting that the real friction lies elsewhere.
"A deal may work from a serviceability perspective but fall over because of postcode restrictions, security type, income interpretation, or inflexible assessment settings," Taylor said. "In many cases, lenders can solve one part of the scenario but not the full picture."
He explained how rather than focusing purely on finding the cheapest rate, brokers “are increasingly educating borrowers about solution-based lending and positioning specialist products as stepping-stone solutions that support longer-term financial goals”.
The conversation is shifting from one centred around pricing alone to suitability, flexibility, and the ability to get the right outcome for the borrower. "That's a more sophisticated conversation, and it's one that specialist lending is well positioned to support."
Confidence gap holding brokers back from growth
The opportunity in specialist lending is significant – but so is the gap between appetite and execution.
Bluestone's report found that 68% of brokers want to write more specialist lending business, yet 46% say they are not confident placing near-prime or specialist deals. That disconnect, in Taylor’s view, represents the most addressable constraint in the market right now.
"Confidence comes from experience, education, and support," he said. "Access to responsive business development managers, credit teams, and scenario-based conversations can make the difference between a declined deal and a successful outcome."
Developing specialist lending capability, he addsed is increasingly a differentiator rather than a supplementary skill – particularly for brokers looking to grow market share and service a broader range of clients.
The broker's role is changing alongside the market
Beyond the commercial opportunity, Taylor sees a deeper shift in what it means to be a broker in the current environment. The traditional value proposition – product comparison and rate negotiation – is giving way to something more complex and more valuable.
"Complex borrowers often need guidance navigating lender policy, understanding documentation requirements, and identifying pathways that reflect their real financial position rather than a simplified snapshot on paper," Taylor said. "That's where broker expertise really makes a difference."
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He also pushed back on the assumption that a 'no' from a major lender is the end of the road. "A decline from a major lender should not automatically mean the deal is impossible. In many cases, it simply means the borrower needs a lender willing to assess the broader context behind the application."
Brokers who can identify specialist lending opportunities early are better positioned to retain clients, strengthen referral relationships, and grow long-term business value.
"Borrower complexity is not a temporary trend," Taylor added. "It reflects a structural shift in the Australian workforce and the way people earn income, build businesses, and manage their finances. For brokers, that presents both a challenge and an opportunity – and those who invest in the capability to navigate it will be well placed for what comes next."
