Bank Statement Loans

Rather than using tax returns alone, WestPac Lending reviews your bank statements. They typically review deposits from the most recent 12–24 months. This helps them calculate a stable, average monthly income. This analysis determines your ability to repay the loan.

While guidelines vary by lender and program, common factors include:

• • • Number of months of statements required (often 12–24)

    • Type of accounts used (business and/or personal)

    • Average monthly deposit calculation method

    • Use of rental or other non-W-2 income streams

These programs may also review your credit profile, reserves, and loan-to-value (LTV) as part of the evaluation.

Bank statement loan requirements are designed to evaluate real cash flow rather than relying solely on tax returns or W-2 income. While guidelines vary by lender and investor, most bank statement mortgage programs include the following general criteria:

Income Documentation

• • • 12 to 24 months of personal or business bank statements

    • Consistent monthly deposits

    • Verification of account ownership

    • Explanation for large or irregular deposits (if applicable)

Lenders typically calculate qualifying income by averaging monthly deposits over the review period. For business accounts, an expense factor may be applied to determine usable income.

Credit Profile

• • • Minimum credit score requirements vary by program

    • Stronger credit profiles may qualify for better terms

    • Recent major credit events may require seasoning

Down Payment & Loan-to-Value (LTV)

• • • Down payments typically start at 10–20%, depending on credit and property type

    • Maximum LTV varies by occupancy and loan size

Reserves

• • • Some programs require liquid reserves (typically several months of mortgage payments)

Because bank statement loans are considered Non-QM mortgage programs, underwriting focuses on the borrower’s ability to repay using alternative income documentation. Specific bank statement loan requirements may vary depending on property type and borrower profile.

Instead of reviewing tax returns, lenders analyze your bank deposits to determine qualifying income.

Income Calculation Example

Total deposits over 12 months: $240,000
Average monthly deposits: $20,000

If using a business account, an expense factor (for example, 50%) may be applied:

$20,000 × 50% = $10,000 qualifying monthly income

This adjusted income is then used to calculate your debt-to-income ratio and overall loan eligibility.

The number of months required (12 or 24) depends on program guidelines and borrower profile.

Bank statement loan rates are typically higher than conventional mortgage rates because they involve alternative documentation and flexible underwriting.

Rates and terms are influenced by:

• • Credit score

  • Loan-to-value ratio (LTV)

  • Property type

  • Occupancy (primary residence, second home, or investment property)

  • Cash reserves

Loan terms commonly include:

• • 30-year fixed

  • Adjustable-rate mortgage (ARM) options

  • Interest-only options (if available under specific programs)

Because these loans are designed for borrowers with complex income structures, pricing reflects the added underwriting flexibility. Bank statement loan rates vary based on credit profile, LTV, and overall borrower strength.

If you’re evaluating whether a bank statement mortgage may work for your situation, estimating your qualifying income is a helpful first step. A bank statement loan calculator can help estimate qualifying income and projected payments.

A bank statement loan calculator can help you:

• • Estimate average monthly deposits

  • Apply a projected expense factor

  • Compare estimated mortgage payments

  • Review potential loan scenarios

You can use WestPac Lending’s mortgage calculator to explore possible payment options and determine how your cash flow may support a home purchase or refinance.

Property eligibility and loan limits vary by state and investor.

Bank statement mortgage programs offer a more flexible path to financing for borrowers whose income does not fit traditional underwriting models.

This program may be particularly helpful if you are:

• • Self-employed with variable earnings

  • Operating an LLC, S-Corp, or sole proprietorship

  • Earning substantial revenue but reporting lower taxable income

  • Relying on business revenue instead of traditional pay stubs

  • Managing multiple streams of income

  • Purchasing or refinancing without using tax returns

By assessing actual cash flow instead of relying solely on tax returns, these programs better reflect the financial reality of many entrepreneurs and independent professionals.