Self-Employed Mortgages

Find out how to get the best rate for a Self Employed Mortgage with the help of a Self Employed Expert

What type of company do you have?

Home Self Employed Mortgages Self-Employed Mortgages
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Nathan Porter

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: May 16, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

May 16, 2024

In this article, we’ll explain how to get a mortgage if you’re self-employed, what information lenders will want to see on your application and why using the services of a specialist mortgage broker can boost your chances of success.

What is a self-employed mortgage?

A self-employed mortgage is a home loan for anyone who trades in a self-employed capacity, whether that’s freelancing, contract work, running your own business or any other variation of the trading style.

They aren’t much different from regular mortgage products, but it’s important to keep in mind that some mortgage lenders specialise in self-employed customers, while others don’t.

How do they work?

The way income is assessed during the application process is mainly what sets self-employed mortgages apart from other types of residential home loans. The length of time you’ve been self-employed along with your trading status (sole trader, director etc.) would also be factors.

Rather than using a basic annual salary figure (as they would with someone who’s employed) and applying an income multiple, most providers will calculate how much you can borrow using a multiple of your average self-employed earnings over the last two or three years.

Given that some mortgage lenders can be more generous and flexible towards self-employed customers, using a whole-of-market broker is highly recommended. A broker can make sure you’re paired up with the lender who’s best positioned to offer the top rates.

Get Started Phone Icon 0808 189 2301

How to get a mortgage if you’re self-employed

Your first recommended step is to speak with a mortgage broker who has experience arranging mortgages for the self-employed. If you make an enquiry with us our free broker-matching service will be able to match you up with the right advisor. 

Your mortgage broker will then be able to help with the following: 

  • Preparing the right documents: You’ll need to evidence certified accounts and/or your latest SA302 tax overview document to prove your income. Lenders can request up to three years’ worth, but your broker will also be able to help find mortgage options for those with only 12 months or just under. You can find a full list of the documents you’ll need in our guide to mortgage applications.
  • Download and optimise your credit reports: Once you’ve downloaded your credit reports, your broker will help to identify any inaccurate or outdated information that could hinder your application.  
  • Finding the right mortgage lenders: Your mortgage broker will be able to quickly identify those lenders who look more favourably on applicants who are self-employed. Saving you time and, potentially, some money too. This is particularly important if you don’t yet have a long trading history and certified accounts or have had some credit issues reported on your record recently. 

How much will a mortgage broker cost if you’re self-employed? 

It depends on the complexity involved with the application but, typically, mortgage brokers will either charge a flat fee of between £500-£1,000 or a percentage of the amount borrowed of between 1%-2%, usually payable once the mortgage has been completed.

Some mortgage brokers may not charge a fee at all and simply take a percentage of the process fee directly from the lender upon completion. 

Eligibility criteria

The requirements for a self-employed mortgage are as follows…

  • Proof of income: Most lenders will want you to produce two or three years of accounts, but there are providers out there who will consider self-employed mortgage applications based on 1 year’s accounts or less.
  • Deposit requirements: Deposit requirements for self-employed mortgages are usually no different from other types of residential agreements. Most lenders will expect you to put down at least 10%, but this could rise depending on the level of risk. For instance, if you only have one year’s trading history, the lender might ask for a 15% deposit to offset the risk. Low deposit deals could also be available, usually through flexible lenders
  • Credit history: Self-employed customers with bad credit might find it more difficult to secure the mortgage they’re looking for. This is because some mortgage lenders will turn you away outright if you’ve had credit problems, but with the help of a whole-of-market broker, it’s possible to find lenders who will accept a self-employed customer for a bad credit mortgage and the broker will make sure no unnecessary credit checks are completed for a mortgage.
  • Age limits: You will find that some providers impose age restrictions on their self-employed mortgage products. Most will be wary if the term of the mortgage extends beyond your 75th birthday, but some will lend to customers aged 85 and a minority have no age limits at all.

How to improve your chances of securing a mortgage

Before you submit a mortgage application, there are a number of things you can do to give yourself a better chance of getting the mortgage you need if you’re self-employed, such as:

  • Saving up as much deposit as you can (anything above 20%-25% will open up a bigger pool of lenders to your application)
  • Preparing all the correct documents – properly certified accounts etc. – to confirm your level of earnings and any additional information (financial projections for the next 12 months, for example)
  • Checking your credit history thoroughly and removing any information that’s either out of date or inaccurate
  • Consider waiting until you have at least 2 years of certified accounts available

Speaking to a mortgage broker who has specific experience arranging mortgages for someone who is self-employed

How long do you need to have been self-employed?

As far as most mortgage lenders are concerned, you will need to have been self-employed for at least two-to-three years and have accounts to prove that.

Some lenders will consider your application after just 9 to 12 months, but you would usually need to evidence a strong track record in your industry and prove that your income is sustainable enough to get approved under these circumstances.

What proof of your income is needed?

Self-employed professionals can prove their income for a mortgage by providing the lender with SA302 self-assessment tax returns, finalised accounts, or projected accounts. As previously mentioned, your income is typically calculated over a two to three-year period, but there are mortgage providers who are happy to base your application on 12 months’ accounts or less.

More flexible lenders may also accept payslips from your own company/family company or handwritten payslips if you are paid in cash.

Some mortgage providers may also ask you to produce P60s, employer references, and benefit/pension statements to verify your earnings during the application process.

What if you don’t have any proof of income?

Residential mortgage lenders are highly regulated and therefore obliged to make sure you can afford to take on the debt you’re applying for, as evidenced by your proof of earnings.

The minimum amount of time you will need to produce accounts for is 9 to 12 months. Even then, your choice of lenders will be fewer than somebody with two to three years of accounts.

The only type of self-employed mortgage product you’re likely to qualify for with no accounts is a second charge mortgage. This, of course, only applies to customers who already own a property and wish to borrow against the equity they hold in it.

Speak to a broker to find out whether other alternatives are available or see our dedicated article on getting a self-employed mortgage with no accounts.

What if you are newly self-employed?

It depends on how recently you became self-employed. In most cases, you will need to wait until you have between 9 and 12 months of trading under your belt before applying for a mortgage, and even then your choice of lenders will be fewer than somebody with two or three years’ accounts.

It may help strengthen your application if you have a track record in the industry you’re freelancing in.

How to get the best rates

To get the best rates on a self-employed mortgage, save up as much deposit as possible, make sure your credit report is in good shape and collect three years’ of accounts. While there are providers who will lend to customers without all these things, the more boxes you can tick, the more lenders you’ll have to choose from.

To get an idea of the current deals available for self-employed mortgage applicants, take a look at our rates table below.

Lender Product Details
Frosted Rates Image

Looking for more rates and deals?

We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.

Last updated May 2024

Please note that the above rates were accurate at the time of writing, but are always subject to change. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

How much can you borrow?

The amount you can borrow for a self-employed mortgage will be based on a multiple of your average earnings over a set period. Some banks and building societies will ask for three years’ accounts, others will be happy with two and a minority will base their calculation on nine to 12 months of trading.

Try our calculator below to get a rough idea of your total borrowing.

Self-Employed Mortgage Calculator

This mortgage calculator enables self-employed individuals to calculate their maximum borrowing amount based on their trading style, income type, and other key variables.

Select your employment type from the menu

Your Results:

You could borrow up to 

Most lenders would consider letting you borrow

This is based on 4.5 times your net profit or the total income declared. To borrow more than this, you will need to speak to a mortgage broker who specialises in self-employed borrowers

This is based on 4.5 times your share of the partnership's net profit or total income declared. To borrow more than this, you will need to speak to a broker who specialises in self-employed borrowers

This is based on 4.5 times your share of the net profit/salary plus dividends, or total income declared. To borrow more than this, you will need to speak to a broker who specialises in self-employed borrowers.

This is based on 4.5 times your income. To borrow more than this, you will need to speak to a broker who specialises in self-employed borrowers.

Some lenders would consider letting you borrow

This is based on 5 times your net profit or your total income recieved. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.

This is based on 5 times your share of the partnership's net profit or your total income recieved. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.

This is based on 5 times your share of the net profit/salary plus dividends, or your total income recieved. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.

This is based on 5 times your income. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.

A minority of lenders would consider letting you borrow

This is based on 6 times your net profit or the total income declared. This income multiple is only available under specific circumstances and is usually only accessible via a broker.

This is based on 6 times your shares of the net profit or total income declared. This income multiple is only available under specific circumstances and is usually only accessible via a broker.

This is based on 6 times your share of the net profit/salary plus dividends, or total income declared. This income multiple is only available under specific circumstances and is usually only accessible via a broker.

This is based on 6 times your income. This income multiple is only available under specific circumstances and is usually only accessible via a broker.

Now that you have a rough idea of your maximum borrowing, get in touch to speak to a mortgage broker who can provide bespoke calculations and access to the best rates and deals.

Get Started

How a lender will calculate your maximum borrowing

Not all mortgage providers use the same calculations. Most will multiply your average earnings by 4.5, some will stretch to x5 and a minority will go as high as x6, under the right circumstances.

Let’s say you’ve been earning an average of £30,000 from freelancing over the last three years and can evidence that income with accounts. Most mortgage providers would cap their lending at £135,000, some would go up to £150,000, and a minority £180,000.

That said, using a whole-of-market broker could help you maximise your borrowing potential. Perhaps you’ve just had a really strong 12 months of trading but your average income over the last three years is lower when the previous two are factored in. A broker could help you find a lender who offers mortgages based on only one year’s accounts, potentially allowing you to take out a bigger mortgage.

It’s also worth noting that what is classed as declarable income can vary from one mortgage lender to another. Some providers won’t accept bonuses or commissions, for example, while others will let you bulk up your average wage by including varying percentages of supplemental earnings.

We're so confident in our service, we guarantee it.

We know it's important for you to have complete confidence in our service, and trust that you're getting the best chance of mortgage approval at the best available rate. We guarantee to get your mortgage approved where others can't - or we'll give you £100*

Happy approved couple

What qualifies as self-employed income?

The type of income you can declare for a self-employed mortgage will vary from one lender to the next and can also depend on how you trade. For instance, the type of income a sole trader can declare on their application will differ from somebody who is looking for a company director mortgage.

Here is a breakdown of trading styles and the type of income lenders may accept…

Sole trader

  • Net profit (if using accounts)
  • Total income received (if using SA302s)

Partnership

  • Your share of net profit (if using accounts)
  • Your share of total income received (if using SA302s)

Limited company

  • Your share of the director’s salary
  • Your share of dividends
  • Occasionally lenders can consider net profit if there has been a large business expense or a sum earned that was left in the business and not withdrawn

Supplemental income lenders might accept

Some lenders will also accept self-employed professionals to declare the following with their main wages and take it into account for affordability:

  • Investment Income
  • Rental income
  • Trust income
  • Capital earned overseas
  • Capital earned in a foreign currency
  • Bursary
  • Stipend income
  • Personal, workplace, and state pensions
  • State benefits

Can you get a mortgage if you’ve claimed a SEISS grant?

Yes, but your choice of approachable mortgage lenders is likely to be fewer.

Since the SEISS grant is technically classed as income, some lenders won’t be too concerned that you’ve claimed one if you can prove that you’ve now returned to work and are making enough income to pass their affordability assessments. Other lenders are, however, placing extra scrutiny on SEISS claimants and are being more stringent with their checks.

Your chances of mortgage approval after claiming SEISS could hinge on which lender you approach.

How long should you wait before applying?

Its recommended to wait until you’ve resumed trading for at least three months before applying for a mortgage. This is because there are lenders who are asking for evidence that the applicant has returned to business as usual since claiming SEISS support, and they will likely request at least three months’ business bank statements to prove this.

Although there are mortgage providers who aren’t strict about this, your choice of approachable lenders will likely be higher if you were to wait until you’ve returned to a healthy trading level for at least three months before making an application.

Mortgages for self-employed social media professionals

Social media as a profession (whether employed or self-employed) is a relatively new prospect for lenders to deal with and assess. So, in this regard, getting a mortgage can prove tricky purely on the basis that your track record in the industry may not be substantial enough to provide sufficient proof of income.

However, if you are able to produce enough documentary evidence – mainly in the form of certified accounts over a number of years – then your chances of getting the mortgage you need should really be no different than someone in a more well-known, traditional industry. Whether you work in a self-employed capacity for YouTube, TikTok or OnlyFans should not be of importance next to your ability to prove your earnings – over the long term – when you apply.

In addition, certain lenders may also want the comfort of seeing further evidence – perhaps in the form of a business plan or financial projection – of how you intend to, at least, maintain your current level of earnings in the future so you’re able to meet your financial commitments moving forward. This may mean that particular roles and social media entities prove to be less appealing to a lender than others.

Speak to a broker who specialises in self-employed mortgages

If you’re self-employed and looking for a mortgage, it’s important that you get the right advice, and that means finding a mortgage broker who specialises in customers who trade the same way you do.

The good news is that we work with experts who know exactly which lenders are best positioned to offer favourable rates on self-employed mortgages, and we’ll introduce you to them for free.

Call 0808 189 2301 or make an enquiry and we’ll match you with a whole-of-market broker who could save you time, money, and potential disappointment in the long run.

FAQs

Yes, it’s possible. Applying for your mortgage through a whole-of-market broker is often the best route. Some  mortgage lenders will decline you outright if you’re self-employed and have bad credit, while others may offer unfavourable rates. A broker with the right expertise can introduce you to the mortgage provider best positioned to offer a competitive deal to a customer with your credit history.

Specialist bad credit mortgage companies take a broader view of self-employed customers with bad credit and will base their decision on the age, severity and reason for the credit problem.

With the right advice, it may even be possible to get a self-employed mortgage with severe forms of adverse credit, such as bankruptcies and repossessions, as long as enough time has passed since these issues occurred and your financial conduct has been responsible since then.

The advisors we work with can even suggest ways to lower the risk posed by your credit history, such as producing at least three years’ of accounts and putting down an additional deposit.

Yes, of course. If you’re applying on a joint basis then a mortgage lender will take both of your incomes into account when calculating how much you can borrow.

If one of you is employed then your annual salary will be required and if one of you is self-employed the lender will use an average of your last 2-3 years earnings. These amounts will be added together and multiplied by whatever factor the lender uses to give the amount you can borrow for a mortgage.

Ask a quick question

We can help!

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Self Employed Mortgages

Ask us a question and we'll get the best expert to help.

Our Brokers

Get in touch today

Make an enquiry and we'll arrange for an experienced mortgage broker we work with to contact you straight away.

1 of 3
£
£
£
2 of 3
3 of 3 Send!

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

Maximise your chances of approval, whatever your situation - Find your perfect mortgage broker

By browsing our site you consent to our use of cookies.