Bank Statement Loan Calculator

How Bank Statement Loans Work for Self-Employed Borrowers

Traditional mortgage underwriting relies on W-2s and tax returns to verify income. Self-employed borrowers often write off a significant portion of business income, which lowers their taxable income and makes it difficult to qualify through standard channels — even when they earn and deposit substantial amounts.

Bank statement loans solve this by using actual bank deposits as the income basis. Lenders average 12 or 24 months of deposits and apply an expense factor to arrive at qualifying income. The expense factor accounts for the business costs embedded in those deposits.

Personal vs. Business Bank Statements

Personal bank statements typically use a higher expense factor (40–50%) since business expenses are mixed in. Business bank statements often use a lower expense factor (20–40%) if the business has a formal P&L statement. Some lenders allow CPA-prepared profit and loss statements to override or adjust the expense factor.

Bank Statement Loan Requirements

• Self-employment for 2+ years (typically verified with business license or CPA letter)
• Minimum credit score: typically 660–680+
• Down payment: typically 10–20% minimum depending on loan size
• 12 or 24 months of personal or business bank statements
• Loan amounts: typically up to $3–5M depending on lender
• Rates are typically 0.5–1.5% higher than conventional loans

Bank Statement Loan vs. Conventional Loan

For self-employed borrowers whose tax returns show low net income due to deductions, a bank statement loan may be the only viable path — even if the conventional rate would be lower. The right choice depends on your deposit history, expense factor, and how aggressively you write off business expenses.

Tips for Getting an Accurate Qualifying Income Estimate

Large, irregular deposits can skew your average if a lender counts a one-time transfer, a loan, or a gift as though it were regular business income. Before running this calculator, it helps to review your statements and separate genuine business deposits from one-off transfers, since most lenders will ask you to explain or exclude deposits that do not look like recurring income.

Your expense factor has a big impact on the result, so if your business has a formal profit and loss statement prepared by a CPA, ask your loan officer whether that documentation could support a lower expense factor than the default lenders typically apply. A lower expense factor increases your qualifying income without changing your actual deposits at all.

It also helps to compare a 12-month and a 24-month statement period side by side if your deposits have grown recently, since a shorter, more recent period may better reflect your current income, while a longer period can help smooth out a slower month or two.

Because bank statement loans are offered by a more limited set of lenders and often carry different pricing than conventional loans, it is worth getting quotes from more than one lender who specializes in this program before comparing the results to a conventional loan you may also qualify for.