Being self-employed does not prevent you from getting a mortgage. What matters is how a lender assesses your income, trading history, existing commitments and the property you want to buy. The documents you need and the amount a lender may consider affordable can differ for a sole trader, a company director or a contractor.
Greenacre Financial Services helps clients in Berkshire, across London and throughout the UK discuss mortgage options based on their circumstances. If your income varies or your business structure is more complex, an adviser can explain what information may be needed before an application.
Can I get a mortgage if I am self-employed?
Yes. Lenders offer mortgages to self-employed applicants, although their income-assessment methods vary. Most will want evidence of an established income and will also review your deposit, credit history, household spending and other financial commitments. Mortgage availability is always subject to the lender’s assessment and current criteria.
How lenders may assess different types of self-employed income
Sole traders
A lender will commonly look at the net profit shown on your Self Assessment records rather than the total sales coming into your business. It may compare more than one year of figures and examine whether profits have increased, remained stable or declined.
Business partnerships
If you are a partner in a business, lenders may consider your share of the partnership’s profits, supported by the partnership and personal tax documents. The evidence required depends on how the partnership operates.
Limited-company directors
Some lenders assess a director using salary and dividends. Others may be willing to consider a share of company profits, subject to ownership, trading history and other conditions. Money held in a company is not automatically treated as personal mortgage income, so it is important to establish how the relevant lender would calculate affordability.
Contractors and freelancers
The approach can depend on whether you are paid through PAYE, a limited company, an umbrella arrangement or a contract day rate. A lender may review your current contract, contract history and gaps between assignments as well as your tax records.
Do I need one, two or three years of accounts?
Two years of accounts or tax records is a common starting point, and some lenders request a longer history. Certain lenders may consider applications with around one year of trading records, but this is not a universal rule and depends on the full circumstances. Fewer years of evidence can limit the lenders or mortgage products available.
A recent change from sole trader to limited company, or a move from employment into contracting, can also affect how your history is assessed. Speak to an adviser before assuming that a particular lender will accept your previous income.
What documents might I need?
The exact checklist depends on your business structure and lender, but it may include:
- SA302 tax calculations and corresponding tax-year overviews.
- Recent accounts, accountant-prepared figures or business tax information.
- Personal and, where applicable, business bank statements.
- Evidence of salary, dividends, partnership income or contractual earnings.
- Identification, proof of address, deposit evidence and details of existing borrowing.
HMRC explains how to obtain SA302 calculations and tax-year overviews. Your adviser can help establish which documents are relevant before they are submitted to a lender.
What if my income has changed?
A fall in profit, seasonal income, recent parental leave, time away from work or a period between contracts does not automatically rule out a mortgage. However, lenders may ask for an explanation and more evidence about whether the income used for affordability is sustainable. An accountant’s explanation or up-to-date business information may be helpful, depending on the lender.
Avoid making business or tax decisions simply to improve a mortgage application without discussing the implications with your accountant or an appropriate professional.
How Greenacre can help
Our specialist mortgage advisers can start with your employment or business structure, income evidence, deposit, current commitments and property plans. They can then explain how different mortgage criteria may apply and what documentation to prepare. The aim is to make the next step clear before you spend time pursuing an unsuitable option.
Greenacre is based in Sunninghill, Berkshire, and works with mortgage clients across the UK. Appointments can be arranged by phone, video or face-to-face where available.
Self-employed mortgage FAQs
Can I apply with only one year of accounts?
Some lenders may consider this, but it depends on trading history, the strength of your application and current criteria. One year of accounts does not guarantee acceptance.
Do lenders use turnover or profit?
For sole traders, net profit is commonly more relevant than turnover. Different rules can apply to partners, company directors and contractors.
Can a company director use retained profits?
Some lenders may consider an appropriate share of company profit or retained earnings in certain circumstances. Others use salary and dividends. A lender will assess the business and the applicant, and criteria vary.
Can I remortgage if I am self-employed?
Potentially, yes. Lenders will assess your current circumstances, the property, the loan amount and affordability. If you are nearing the end of a mortgage deal, it can be sensible to review your remortgage options before it expires.
What if I have recently changed from employed to self-employed?
Your previous experience may help explain your circumstances, but a lender may still require evidence of self-employed trading and sustainable income. Different lenders take different approaches.
Discuss your self-employed mortgage options
If you are a sole trader, company director, partner or contractor, speak to Greenacre Financial Services about your circumstances and the mortgage documents you have available.
Talk to a mortgage adviser about your self-employed income
Or call 0203 3939 222.