Mortgage advice for the self-employed
For sole traders, company directors, contractors & business owners
When you're self-employed, you want to know how much you can borrow, which lenders will consider your income and whether you can get the mortgage you need.
But lenders don't all assess self-employed income in the same way. Accounts, salary and dividends, retained profits, contract income and how long you've been trading can all affect the way your application is considered — which can make finding the right lender feel unnecessarily complicated.
You shouldn't have to spend hours trying to work out which lenders' criteria fit the way you earn.
We'll take the time to understand how your income is structured, look at how different lenders may assess it and explain your mortgage options clearly. We'll then recommend a suitable mortgage and take care of the application for you.
So you can spend less time navigating mortgage criteria and more time focusing on your business and what you're trying to achieve.
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How do lenders assess self-employed income?
Being self-employed doesn’t mean you need a different type of mortgage. The difference is often in how lenders assess your income and the evidence they want to see.
Lenders don’t all take the same approach, so how your business is structured and how you take your income can affect which mortgage options may be suitable.
Sole traders
Lenders will usually look at your declared taxable income and trading history when assessing affordability. How many years’ figures they want to see and how they treat increases or fluctuations in income can vary between lenders.
We’ll look at your recent trading figures and circumstances before considering which lenders may be suitable.
Limited company directors
If you’re a limited company director, your income may include salary and dividends, but that doesn’t always tell the whole story. Some lenders may also consider retained profits or other measures of company performance where their criteria allow.
We’ll look at how you take income from your business and consider lenders whose assessment methods may work well for your circumstances.
Contractors
Contractors can be assessed differently depending on factors such as the type of contract, how you’re paid, your work history and the lender’s criteria. Some lenders may assess accounts or taxable income, while others may be able to consider contract income.
We’ll establish how your income is structured before looking at the most appropriate way to present your circumstances to a lender.
What might you need for a self-employed mortgage application?
The documents you'll need can vary depending on how you're self-employed and the lender you're applying to. We'll let you know exactly what's required, but it can help to have some of the following ready:
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Self-Assessment Tax Return (SA302) and Tax Year Overviews – often requested for sole traders and some company directors.
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Business or company accounts – the number of years required can vary between lenders.
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Recent bank statements – personal and, where required, business statements.
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Evidence of your current contract – particularly relevant for contractors.
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Proof of deposit – if you're buying a property.
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ID and proof of address – as with any mortgage application.
Don't worry if you don't have everything on this list. We'll first look at your circumstances and the lenders that may suit you, then tell you what documentation you'll actually need.
When self-employed mortgages aren't straightforward
Self-employed income doesn't always fit neatly into a lender's standard affordability assessment. You might have a profitable business but take a relatively small income, have only recently started trading, or have earnings that vary from one year to the next.
That doesn't necessarily mean you can't get the mortgage you need. Different lenders assess these circumstances in different ways, so finding the right lender can make a significant difference.
You only have one year's accounts
Some lenders want two or more years of trading history, but there are lenders that may consider an application with just one year's accounts, depending on your circumstances.
Your income fluctuates
If your profits have risen or fallen between years, lenders can take different approaches to the figures they use. We'll look at the pattern of your income and which lenders' criteria may work better for you.
You've recently become self-employed
A shorter trading history doesn't always rule out a mortgage. Previous experience in the same industry or profession can sometimes be relevant, depending on the lender.
You leave profits in your business
If you're a limited company director, the salary and dividends you take may not reflect the full strength of your business. Some lenders may be able to consider retained profits or other measures of company performance.
Your circumstances are more complex
Perhaps you have several sources of income, combine employed and self-employed work, or have had some credit problems in the past. We'll look at the whole picture rather than assuming your circumstances won't fit.
The important thing is not to assume that one lender's answer will be everyone's answer. We'll look at how your income and circumstances could be assessed by different lenders and help you find an appropriate route forward.
Self-employed mortgage success stories
Remortgaging to fund an onward purchase while self-employed
A limited company director wanted to buy a second residential property in another town, where he would also be working. To fund the deposit, he needed to remortgage his existing property to release some of the equity, then take out a separate mortgage for the new property.
As a company director, his income was assessed using his salary and dividends, based on the average of the previous two years. But the bigger challenge was balancing the borrowing across the two properties.
Increasing the mortgage on his existing property meant a higher monthly payment, which then needed to be taken into account when assessing how much he could afford to borrow on the new property.
There was another complication: the client hadn't actually found the new property yet. He wanted to establish how much he could realistically raise and borrow before spending time searching for a property.
The vast majority of lenders would require details of the onward purchase before allowing the remortgage to proceed. If the client had approached one of those lenders directly, he may not have discovered this until partway through the process. Once asked for the address of the property he was buying, he wouldn't have been able to provide it and the application would have been declined.
We knew a high-street lender whose criteria allowed the remortgage to proceed without evidence of a specific onward purchase. Importantly, this wasn't an expensive specialist option — the lender was competitively priced alongside other high-street lenders.
The result
The client was able to raise the capital he needed for his deposit and could start looking for his second property knowing the finance was achievable.
For us, this case was a good example of why finding a mortgage isn't simply about finding a lender willing to lend. It's about knowing which lender's criteria fit the circumstances before you spend weeks going down a route that was never going to work.
If your income or plans don’t fit neatly into a lender’s standard criteria, it doesn’t necessarily mean the mortgage can’t be done — it may simply mean finding the right lender matters more.
For a no-obligation mortgage review:
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Self-employed mortgage tips
If you’re self-employed and thinking about applying for a mortgage, a little preparation can make the process much easier. This video explains some of the things to think about before you apply.
Self-employed FAQ's
1. Can I get a mortgage with only one year's accounts?
Potentially, yes. While many lenders prefer to see two or more years of trading history, some may consider applicants with just one year's accounts depending on their circumstances, industry experience and the strength of the application.
2. How many years of accounts do I need for a self-employed mortgage?
This varies between lenders. Some may require one year's accounts, while others may prefer two or more years of trading history. The most suitable options will depend on your circumstances and the lender's criteria at the time.
3. Can I get a mortgage if I'm a limited company director?
Yes. Lenders assess limited company directors in different ways. Some focus on salary and dividends, while others may consider retained profits or other measures of company performance where their criteria allow.
4. Can I get a mortgage as a contractor?
Potentially, yes. Contractors can be assessed differently depending on how they're paid, the type of contract they work under and the lender's criteria. Some lenders may be able to assess contract income, while others may focus on accounts or taxable income.
5. Is it harder to get a mortgage if you're self-employed?
Not necessarily. The main difference is often the way lenders assess and verify income. Self-employed applicants usually need to provide additional evidence of income, but being self-employed doesn't automatically mean you'll have fewer mortgage options.
6. Can I remortgage if I'm self-employed?
Yes. Whether you're coming to the end of a fixed-rate deal, looking to borrow more or reviewing your current arrangements, there are remortgage options available for many self-employed borrowers, subject to lender criteria and affordability.
7. Will a lender use my salary, dividends or business profits?
That depends on how your business is structured and the lender's assessment criteria. Different lenders can use different methods when assessing self-employed income, which is why lender selection can be particularly important.
8. How much can I borrow if I'm self-employed?
There's no single answer, as borrowing capacity depends on factors such as income, existing commitments, deposit size, credit history and the lender's affordability assessment. A mortgage review can give you a clearer idea of what may be achievable.
Helpful resources for self-employed borrowers
Mortgage calculators
Get an idea of how much you may be able to borrow and what your monthly repayments could look like.
Buying a home
Advice on the mortgage process whether you're buying your first home or moving to your next property.
Remortgaging
Explore your options if your current deal is ending, you want to borrow more or you're considering switching lender.
Buy-to-let mortgages
Mortgage advice for landlords and property investors, including those who are self-employed or run their own business.
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