Self-Employed · Guide
Getting a mortgage when self-employed: the complete guide
Being self-employed doesn't mean you can't get a great mortgage. You just need to approach it differently — and ideally, work with a broker who knows which lenders work best for self-employed applicants.
Can I get a mortgage when self-employed?
Yes — absolutely. There is no rule that prevents self-employed people from getting a mortgage. In fact, with the right preparation and the right lender, self-employed borrowers can access exactly the same range of products and rates as employed applicants.
The challenge is that lenders need to be confident in the stability and sustainability of your income, and proving that is more complex when you work for yourself. The key is presenting your finances clearly and working with a broker who understands which lenders are genuinely self-employed-friendly.
How lenders assess self-employed income
How your income is calculated depends on your trading structure:
Sole trader or partnership
Lenders will use your net profit as declared on your Self Assessment tax returns. Most will average the last two years' figures, though some will use the lower of the two years or just the most recent year. If your income has grown, it pays to work with a lender that uses the most recent year's figure.
Limited company director
If you operate through a limited company, most lenders will use your salary plus dividends. Some more progressive lenders will also consider retained profits within the company — useful if you've deliberately left profits in the business. This can significantly increase your assessed income.
Contractor
If you work through a series of contracts — particularly in IT, engineering, or financial services — some specialist lenders will use your day rate multiplied by 48 weeks to calculate your income, rather than your end-of-year accounts. This is often much more favourable.
What documents will I need?
Lenders need to verify your income, identity, and financial position. Here's what you'll typically need to provide:
Standard documentation required
Income evidence
- 2–3 years' SA302 forms and tax year overviews (from HMRC)
- For limited company directors: 2–3 years' full accounts (certified or accountant-prepared)
- For contractors: copy of current and most recent contracts
Identity and address
- Passport or driving licence
- 2–3 months' utility bills or bank statements showing current address
- If you're not on the electoral roll, some lenders will require additional proof
Financial position
- 3 months' personal bank statements
- 3 months' business bank statements
- Evidence of deposit source (especially important if deposit is partially from business funds)
How many years of accounts do I need?
The standard requirement is two years of accounts or SA302s. This applies to the vast majority of lenders on the high street.
If you only have one year of accounts, you're not necessarily stuck. A smaller number of specialist lenders will consider applications with a single year of self-employment history, provided the income is strong and consistent. However, your options will be more limited and rates may be less competitive.
If you've recently gone self-employed from employed work in the same field — for example, a nurse who has become a locum — some lenders will take a more flexible view of your trading history.
How to maximise your borrowing
There are several things you can do in the lead-up to a mortgage application to strengthen your position:
- Avoid reducing your declared income unnecessarily — speak to your accountant before making decisions about salary, dividends, or expenses in the year before applying
- Make sure your tax returns are filed and up to date — lenders will verify your SA302s directly with HMRC in many cases
- Keep your business and personal accounts separate — mixed accounts can cause confusion and delay
- Reduce personal debt — credit cards, loans, and other commitments reduce the amount lenders will offer
- Build a strong personal credit profile — pay bills on time, keep credit utilisation low, and ensure you're on the electoral roll
- If you operate through a limited company, consider whether retained profits could be included — a good broker will identify lenders who will consider these
- Save as large a deposit as possible — a lower LTV opens up more lenders and better rates
Why use a specialist broker?
This is where working with a specialist mortgage broker is especially valuable for self-employed applicants. Lenders assess self-employed income very differently from one another. Some will use only the most recent year's profits. Some will average two or three years. Some will consider retained company profits. Some are experienced with contractor day rates.
Going directly to your bank means accessing a single set of criteria. Going to a whole-of-market broker means we can identify which lenders will assess your income most favourably for your specific situation — and that can make a significant difference to how much you can borrow and the rate you're offered.
We work with self-employed clients across Staffordshire and the UK every week, and we understand the nuances of different lenders' criteria better than most.
Frequently asked questions
My income has been increasing year on year — will lenders use the higher figure?
It depends on the lender. Some use the average of the last two years; others use the most recent year (which would be in your favour if income has grown). Some use the lower of the two years as a conservative measure. A specialist broker will identify which approach works best for your trajectory.
Can I use director's dividends as income for a mortgage?
Yes. Most mainstream lenders accept salary plus dividends as the basis for a self-employed mortgage. Some progressive lenders will also consider net profit before directors' remuneration, or retained profits within the company — which can significantly increase your assessed income.
I've only been self-employed for 12 months. Can I still get a mortgage?
Possibly, but your options will be more limited. Some specialist lenders will consider one year of accounts, particularly if your income is strong, you have a good credit profile, and a large deposit. If you previously worked in the same profession as an employee, this can also help.
Do self-employed applicants pay higher mortgage rates?
Not necessarily. Once approved, self-employed borrowers access exactly the same mortgage products as employed borrowers. The rates are the same — what differs is which lenders will consider your application and how they calculate your income. This is why working with the right broker matters.
Will gaps in my trading history affect my application?
They can, depending on the reason and length. A brief gap followed by strong resumed income is usually manageable. Lenders will ask for an explanation. If you have gaps due to illness, parental leave, or sector downturns, being upfront and providing context (ideally a letter from your accountant) will help.
Self-employed mortgage specialist
Let's find the right lender for your situation.
We work with self-employed clients every week and know which lenders will assess your income most favourably. Get in touch for a no-obligation conversation.