Self-employed and investors
Bank Statement Income Calculator for Self-Employed Borrowers
Self-employed and paid by deposit? Turn 12 or 24 months of bank deposits into the monthly income figure a bank statement lender is likely to work from.
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Bank statement income
Results
In plain words
From $240,000 of deposits over 12 months, minus $0 that do not count, your eligible deposits average $20,000 a month. After a 50% expense factor, estimated qualifying income is $10,000 a month, or $120,000 a year.
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Key figures
- Qualifying monthly income$10,000
- Qualifying annual income$120,000
- Average eligible deposits per month$20,000
- Max housing at 43% DTI$4,300
- Max housing at 50% DTI$5,000
- Qualifying monthly income$10,00050%
- Expense allowance$10,00050%
- Qualifying monthly income
View chart as table
| Expense factor (%) | Qualifying monthly income |
|---|---|
| Expense factor (%) 10% | $18,000 |
| Expense factor (%) 25% | $15,000 |
| Expense factor (%) 50% | $10,000 |
| Expense factor (%) 70% | $6,000 |
Compare scenarios
| Scenario | Qualifying monthly income | Qualifying annual income |
|---|---|---|
| 25% · 12 | $15,000 | $180,000 |
| 50% · 12 | $10,000 | $120,000 |
| 25% · 24 | $7,500 | $90,000 |
| 50% · 24 | $5,000 | $60,000 |
How to use this calculator
- Add up all deposits on the bank statements you plan to submit and enter the total.
- Choose a 12-month or 24-month statement period.
- Enter the deposits a lender would likely exclude, such as transfers between your own accounts.
- Enter an expense factor: a lender's figure for business accounts, or 0% for personal accounts if that is what the lender uses.
- Read your estimated monthly qualifying income and use it in the debt-to-income calculator.
Many self-employed people earn good money but show low income on their tax returns after business write-offs. A bank statement loan solves that by measuring income from deposits instead of tax returns. This bank statement income calculator follows the same basic steps lenders use, so you can estimate your qualifying income before you talk to one.
How this bank statement income calculator works
The calculator takes three steps:
- Remove deposits that do not count. Eligible deposits = total deposits − excluded deposits.
- Average them. Average monthly deposits = eligible deposits ÷ 12 or 24.
- Apply the expense factor. Qualifying income = average × (1 − expense factor).
On one line:
Monthly income = (total deposits − excluded deposits) ÷ months × (1 − expense factor ÷ 100)
The expense factor is a percentage lenders subtract from business deposits to stand in for the costs of running the business. Each lender sets its own. With personal statements, lenders often apply no factor, because your business has already paid its costs before sending you money.
Worked examples
Example 1: 12 months of business statements
A self-employed designer submits 12 months of business bank statements with $240,000 in total deposits. None of them are transfers or loans. Assume the lender applies a 50% expense factor.
- Eligible deposits: $240,000 − $0 = $240,000.
- Average: $240,000 ÷ 12 = $20,000 a month.
- Qualifying income: $20,000 × (1 − 0.50) = $10,000 a month, or $120,000 a year.
If the same deposits came into a personal account and the lender applied no expense factor, qualifying income would be the full $20,000 a month.
Example 2: 24 months with exclusions and a CPA letter
A contractor uses 24 months of business statements totaling $432,000. Of that, $12,000 is transfers from a personal savings account. A CPA letter supports a 30% expense ratio, and the lender accepts it.
- Eligible deposits: $432,000 − $12,000 = $420,000.
- Average: $420,000 ÷ 24 = $17,500 a month.
- Qualifying income: $17,500 × 0.70 = $12,250 a month, or $147,000 a year.
The expense factor is the biggest lever. At a 50% factor, the same contractor would qualify on only $8,750 a month.
What your result means
Your qualifying monthly income is the figure a lender divides your debts by to get your debt-to-income ratio (DTI). Enter it in the debt-to-income calculator along with your expected housing payment and other debts. Each non-QM lender sets its own DTI maximum; as a point of reference, Fannie Mae allows up to 50% on loans approved through its automated system.
If your result is far below what you actually take home, check the expense factor. A documented lower expense ratio, or using personal statements, can change the answer a lot.
Program rules that change the answer
| Item | Bank statement loan (non-QM) | Conventional, FHA or VA |
|---|---|---|
| Income proof | 12 or 24 months of bank statements | Usually two years of tax returns for self-employed income |
| Income used | Average eligible deposits, minus expense factor | Net income after business deductions |
| Expense factor | Set by each lender; may be lowered with a CPA letter | Not used; actual expenses from tax returns |
| Rules set by | Each lender, within the Ability-to-Repay rule | Fannie Mae, Freddie Mac, HUD or VA |
| Typical cost | Often a higher rate and larger down payment | Program pricing |
Because these loans are not Qualified Mortgages, lenders still must make a reasonable, good-faith decision that you can repay, using reliable records. Bank statements are one kind of record the federal rule allows. Read our bank statement loan guide for documents, costs and red flags, and the non-QM loans guide for other options.
Assumptions
- You enter total deposits for the whole period; the calculator does not read statements.
- One expense factor applies to all eligible deposits.
- Excluded deposits are removed before averaging.
- The result is gross monthly income for qualifying, not take-home pay.
Common mistakes
- Counting transfers as income. Moving money from savings or another account of yours does not count.
- Mixing personal and business deposits. If money moves between the two accounts, it can be counted twice. Lenders will catch it.
- Leaving out slow months. The average covers every month in the period, including weak ones.
- Ignoring large unexplained deposits. Lenders often ask for proof of where they came from and may exclude them.
- Assuming a fixed expense factor. Lenders differ; ask each one which figure it uses.
Limits of this estimate
Real lenders also look at trends (falling deposits can lower your figure), overdrafts or NSF charges, how long you have been self-employed, your credit score and cash reserves. Some ask for a profit and loss statement as well. Use this estimate to prepare, then ask two or three lenders to calculate your income from your actual statements. A HUD-approved housing counselor can help you compare a bank statement loan with programs that use tax returns.
For context, the national average 30-year fixed rate was 7.40% as of October 15, 2026 (Freddie Mac). FHA, VA and USDA rates are set by each lender and often differ.Source: Freddie Mac Primary Mortgage Market Survey, via FRED
Frequently asked questions
How do lenders calculate income from bank statements?
They total the eligible deposits over 12 or 24 months, remove deposits that are not income, and divide by the number of months. For business accounts they then subtract an expense factor to account for business costs. The result is your qualifying monthly income.
What is an expense factor?
It is a percentage a lender takes off business deposits to stand in for business expenses. Each lender sets its own figure, which may depend on your industry or staff. A CPA or tax preparer letter showing a lower actual expense ratio may let you use a lower factor.
Should I use 12 or 24 months of statements?
Use the period that gives a fair picture of steady income. If your income rose recently, 12 months may show more. If the last year was weak, 24 months may average it out. Lenders may price the two options differently.
Which deposits do not count as income?
Usually transfers between your own accounts, loan or credit line proceeds, refunds, gifts, tax refunds and unusually large one-time deposits that you cannot explain as business income.
Do personal bank statements get an expense factor?
Often not. If your business pays its costs from a business account and then pays you, many lenders count most eligible deposits to your personal account. They may still review business statements to confirm where the money came from.
Is a bank statement loan a Qualified Mortgage?
Usually not. Bank statement loans are non-QM loans. The lender must still make a good-faith determination that you can repay under the federal Ability-to-Repay rule, and may use bank records to verify income.
What debt-to-income ratio do bank statement lenders allow?
Each lender sets its own limit. For reference, Fannie Mae allows up to 50% on loans run through its automated system, but non-QM lenders publish their own maximums.
Sources
Read the guides
Related calculators
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