Getting a Mortgage as a Freelancer

Yes, you can get a mortgage as a freelancer! But here’s the thing, because freelance income can be a bit more complex than a regular salary, lenders will usually want a bit more evidence to prove your earnings. That’s where things can get tricky, as not all lenders look at freelance income the same way.

The good news? There are lenders out there who get how freelancers work. Even if you’ve run into hurdles before or been told “no,” a good broker will know exactly which lenders to approach and how to present your case in the best light.

With more and more people becoming self-employed, the number of lenders willing to consider freelancers is growing all the time. The right advice can make all the difference between a decline and a thumbs-up.

The following is the key criteria lenders will look at when they assess your application:

• Length of freelance history
• Employment type, Income stability and pattern
• Contracts or invoices as proof
• Number of years’ accounts

Lenders assess freelance income in various ways, which is good if you’ve been declined, as it may well mean there are other lenders out there.

There are basically three ways lenders can assess your freelancer income. As a standard self-employed borrower, as a contractor, or as a temp or short-term employee. As the policy and treatment are different for each, we’ve broken it down a bit more for you here:

Self-employed

Some consider you self-employed, so they will need your accounts to see the income you’ve declared to HMRC. Many will average your earnings for the last 3 years – that said, there are some lenders happy with just 1 year trading, and some that will use the latest year, which is great if you’ve done better recently and can lead to much higher maximum loan sizes.

The figures they’ll use are your net profit if you’re a sole trader or, if you are a limited company director, your salary and dividends. IMPORTANT: If you’re a company director and have made more than you took from the business, some lenders also consider your share of the business profits, which can also lead to much higher loan amounts.

Contractor

There are a few lenders that can consider your contract value (if you have one) rather than your actual business trading accounts. This is great if you have declared lower profits or maybe have won a new contract that is bigger than your last 12 months’ trading figures. This can be looked at on a day-rate basis with calculations maybe over 46 weeks.

Short-term employed contracts

If your clients pay your tax and you essentially work for them, some lenders are happy to consider the gross pre-tax numbers here, too, as if you were on a basic salary.

Multiple sources of income

We have some borrowers set up like this, perhaps with multiple contracts on the go. Some lenders will only consider one source of income, while others can consider more if they are deemed sustainable. This can sometimes even be a mixture of self-employment and employed contracts.

Not always, but that’s usually what most lenders look at for freelancer mortgages. If you’re a sole trader or in a partnership, they’ll often assess your net profits (basically, what’s left after expenses) from your year-end accounts. Some might average your last 2–3 years if your income goes up and down.

If you run a limited company, things get a bit more flexible. Some lenders will only use your salary and dividends, while others will also consider retained profits (which can seriously boost what you can borrow).

Bottom line, every lender works differently, and knowing which ones will look at all your income is where a good broker comes in.

Yes, in some cases! Certain lenders will work off your current contract value or day rate instead of your historic accounts, especially if you have a strong track record. They’ll usually annualise your day rate (for example, £500/day x 5 days/week x 46-48 weeks) to calculate your income.

That said, not all lenders offer this, and they’ll want to see that your contract is ongoing or renewable.

Yes, if you want a lender to count your income, it needs to be declared to HMRC and shown on your tax returns or accounts. For freelancers, that usually means your SA302s, tax year overviews, or company accounts. Undeclared or cash-in-hand earnings won’t be accepted, even if it’s regular work.

If you’ve only recently started declaring all your income or have limited history, don’t worry. Some lenders are more flexible and can consider just one year of accounts or even work from your current contract value or day rate. The key is knowing which lenders will take the time to understand how you earn, which is what our brokers at OMA can help you with!

If you’re a sole trader, lenders will usually look at your net profit (that’s your income after expenses) from your tax returns — typically the last 2 or 3 years, though some will accept just one.

If you work through a limited company, it’s a bit different. Most lenders will look at your salary plus dividends, but some will also include retained profits left in the company, which can increase how much you can borrow.

Bottom line: lenders treat sole trader and limited company income differently, and knowing how to present your numbers can make a big difference to what you can get.

In most cases, the amount you can borrow is pretty similar to everyone else. Most lenders will offer around 4 to 4.5 times your annual income, and in some cases, you might even qualify for 5 times or 6 times your annual income.

If you want a ballpark figure, try our self-employed mortgage calculator. It won’t cover all the quirks and nuances of freelancer income, but it’s a great place to start to get an idea of what’s possible.

It highlights why getting the right advice is crucial because the right lender can offer much more than the wrong one. So, speak to one of our experts today to get a clearer picture of what you could borrow, and you can also use our self-employed calculator below.

Most lenders want to see that you’ve got a stable income and can prove it, usually with 1 to 3 years of tax returns or accounts. They’ll also check your credit history, how much deposit you have (usually at least 5-10%), and whether your income looks sustainable going forward.

If you’ve got gaps between contracts or variable income, don’t panic. Some lenders are more flexible than others, and a good broker can help present your case in the best possible light to the right lenders.

Most lenders like to see at least 12 months of freelancing, but the sweet spot is usually 2 to 3 years. That said, some lenders might be flexible if you’ve just started but have a strong track record in the same industry or have moved from a similar employed role.

New role or company? Don’t worry! If your work is consistent or you have a solid contract, some lenders will consider you even with a shorter history.

Here are some of the questions you need to consider before you apply:

• What type of freelance work do you do?
• How long have you been freelancing?
• Do you have contracts or client agreements in place?
• Are you a sole trader, limited company, or on multiple PAYE arrangements?
• Can you provide accounts or tax returns?
• Do you have any gaps in your income history?

That’s actually pretty common for freelancers, and many lenders are fine with it, as long as you can prove the income is consistent and sustainable. They’ll usually want to see your tax returns or accounts showing the combined income from all your contracts.

Some lenders might ask for extra details on how long the contracts run or if they’re likely to continue, but having multiple income streams can sometimes work in your favour.

Both can work; lenders just want to see that your income is reliable. Open-ended contracts are usually seen as more stable, but fixed-term contracts are fine too, especially if you’ve got a history of renewing or lining up new work.

Some lenders might be stricter if you’re between contracts or just started one, but others will be flexible if the overall picture looks solid.

Most lenders will want to see your SA302s and tax year overviews (usually for the last 1 to 3 years) or certified accounts if you have them. If you work through a limited company, they’ll also look at your salary and dividends, and sometimes retained profits too.

If you’re on contracts, they might ask for your current contract, past contracts, and bank statements to show consistent income. Every lender’s different, so knowing which documents to gather (and which lenders will accept them!) is where a good broker can really help.

Here’s a handy list highlighting the documents you might need to provide:

• SA302s (tax calculations): usually last 1 to 3 years
• Tax year overviews (matching the SA302s)
• Certified accounts (if available, especially for limited company directors)
• Salary and dividends (for limited company freelancers)
• Retained profits (some lenders will include this)
• Current contract(s): plus previous contracts if available
• Bank statements: typically 3 to 6 months, showing income received
• Evidence of future work or contract renewals (if applicable)

If you’re newly freelance or have had gaps between contracts, don’t panic — it doesn’t automatically mean you can’t get a mortgage. Some specialist lenders are happy to work with freelancers who have less than two years of accounts, especially if you’ve moved into freelancing from a similar employed role or can show a strong pipeline of work.

For gaps in work, lenders will usually want a clear explanation. Occasional breaks between contracts are common in freelancing, and some lenders will be flexible if you can show that your income has recovered or you have new contracts lined up.

In these cases, a good advisor is key. They can help present your income and work history in the best light, explain any gaps, and approach lenders who understand the nature of freelance income, rather than those who apply rigid, one-size-fits-all rules.