Q: Rogers & Kelly are immigrating to Sydney from UK. They would like to buy a home straight away, but only have around $300 000 to put down and will need to borrow an additional $400 000-plus. They will be starting their own business, so will not have a fixed income for a while. Roger will, however, have at least one year's mortgage repayments in reserve. They understand that some bank lenders will require they run their business for at least one year before they will lend money. Is there an adventurous lending institution out there?

A: Many Australian bank and non-bank lenders have very restrictive loan conditions and limit the type of borrower to whom they will lend money, including people like Roger & Kelly who are starting up new businesses.

There are specialist lenders, however, who lend to people starting up new businesses. These non-conforming or specialist lenders, specialise in providing home loan finance to borrowers who fall outside traditional lender's criteria, including those who have been trading for less than 12 months or are self-employed. Interest rates on these home loans depend upon the risk of the applicant, but are usually at least one or two percentage points above standard variable rates of regular lenders.

While more expensive than standard loans, non-conforming loans are still cheaper than personal loans. More mainstream lenders, including banks, are also starting to lend money to self-employed borrowers and the sector is becoming more competitive as competition increases.