Self-Employed Mortgages With 1 Year’s Accounts
Explore your options in getting a Self Employed Mortgage with 1 Years accounts
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We explain how to get a self-employed mortgage with only 1 year’s accounts and what possible difficulties you may face. We identify which lenders will consider your application, what to do if you’ve been trading for less than 1 year, and how being newly self-employed affects any remortgage applications.
In this article:
- Can you get a self-employed mortgage with only 1 year’s accounts?
- Typical rates for self-employed mortgages
- How to get a self-employed mortgage based on 1 year’s accounts
- Which lenders will consider your application?
- What if you’ve been trading for less than one year?
- Remortgaging when you’re newly self-employed
- Why Use Online Mortgage Advisor?
- Speak to an expert in Self-Employed mortgages
Can you get a self-employed mortgage with only 1 year’s accounts?
Yes, but it is more difficult than if your accounts went back further. Most lenders need you to have been self-employed for at least 2-3 years before they’ll offer you a mortgage. As a result, there will be fewer mortgage lenders who consider these types of applications but they definitely do exist.
Why it can be more difficult to get approved
It’s more difficult to secure a mortgage at this stage in your self-employment because mortgage providers will see the uncertainty of your future earnings as a risk. They won’t be able to calculate with as much confidence how affordable a mortgage is for you. As a result, most lenders only consider applications from self-employed individuals with three years of accounts or more.
What proof of income will lenders require?
If you only have 1 year’s trading record then some lenders will still be happy to consider your application if, in addition to a set of certified accounts or your self-assessment tax record for that year (SA302), you can provide a suitable financial projection for at least the next twelve months from a qualified accountant.
How much you could borrow?
If a lender accepts applications from the newly self-employed, you can borrow at least 4-4.5 times your income. The figure that is used to calculate your income is either your share of the net profit or the total income received on a self-assessment tax return. If you are listed as a limited company director, income is based on the director’s salary and dividends received.`
In some cases, if you think that your subsequent year’s income will be much higher than your first year’s, it is possible to find a lender who will consider an application calculated on a projection. The projection will need to be confirmed by a qualified accountant.
You can use our mortgage calculator if you’re looking for a quick estimate of your maximum borrowing.
Self-Employed Mortgage Calculator
This calculator can work out your maximum mortgage borrowing if you're self-employed. Select your trading style from the drop-down menu, then enter your income and outgoings, and our calculator will do the rest.
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.
Typical rates for self-employed mortgages
The table below provides an illustration of some of the best rates available for self-employed mortgages. Having less than three years track record may make it less straightforward for you to qualify for the most favourable mortgage terms. However, a skilled mortgage broker will be able to help you identify the right lenders, offering the most competitive rates, for your circumstances.
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 December 2023
The rates quoted above were correct at the time of writing and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time.
Speak to an expert in Self-Employed mortgages
Maximise your chance of mortgage approval with a specialist in self-employed mortgages
How to get a self-employed mortgage based on 1 year’s accounts
It is still possible to get a mortgage if you’ve only recently become self-employed and you can make the process a lot smoother by following a few simple steps. First, make an enquiry with us and we’ll arrange for a specialist mortgage broker to contact you who can help with:
- Advice on the specific eligibility criteria and documentary evidence mortgage lenders will look for in such cases – such as additional finance projections for the next one or two years to corroborate your one year’s earnings so far
- Downloading and optimising your credit records in order to identify any inaccuracies or outdated information that could hinder your chances of approval
- Finding the best mortgage lenders who have previous experience in this area of lending and assist with submitting your application
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Which lenders will consider your application?
Currently (August 2023) the following lenders are examples of providers who could extend you a mortgage, based on only 1 year of accounts. These products are subject to change, however.
- Vida Homeloans – Will accept only 1 year of evidence of income if that is how long a person has been trading. Additionally, a qualified accountant’s projection or latest 3 months’ business bank statements are needed.
- Norton Home Loans – Applicants need to pass an Equifax credit search, provide 1 year proof of self-employed income and 1 month bank statement.
- Scottish Building Society – Will only consider applications for mortgages of 80% or less loan-to-value with 1 year of financial history. Applications need a projection from a qualified accountant. The type of business and number of shareholders can influence the final approval decision.
It is important to note that it isn’t always this straightforward and there is usually a lot more work involved in getting to a decision, but it is possible to get a mortgage based on one year’s accounts if you apply through the right broker.
What if you’ve been trading for less than one year?
If you have been trading for under 12 months, it is highly unlikely that you will find a provider which will consider your application. Lenders have to extend loans responsibly, and if they have no tangible evidence that you can afford your mortgage, they are not going to do so.
However, if you are nearing the end of your first year trading, you could approach a specialist lender that may offer you a mortgage in principle based on your current figures and your projected income. If approved, your mortgage in principle will usually last around 3 months. You can start looking now for potential properties to buy once you have completed your first year as you’ll know what you can afford.
There are also options available for self-employed applicants without accounts. They are situation-specific but you may be eligible for these mortgages. For example, if you are a contractor, a construction industry scheme contractor, or if you are a new business owner with previous track records in similar businesses.
Remortgaging when you’re newly self-employed
If you have only been trading for a year, it is still possible to remortgage when self-employed and lock in a fixed-rate deal. However, as with mortgage applications, it can be more difficult – lenders like to see 2-3 years of accounts as a minimum. You may find that your list of options is not as long as you would have wanted, giving you less choice in terms of rate.
Working with a broker is, again, your best bet. They’ll know what deals are an option for you when you are remortgaging. They’ll work closely with you to help you access the best rate you can with the income evidence you have available.
Aaron and Lizzie have been absolutely…
Aaron and Lizzie have been absolutely amazing throughout. Our last broker gave up on us and told us we wouldn’t get a mortgage until my business had more years accounts next year but Aaron had such fabulous knowledge about the whole market and made sure we have ended up with a mortgage offer!
The help and service we received from start to finish was second to none. I've been self employed with only 1 years accounts but OMA put us in touch with our broker and this guy is a legend. Trust me, nothing was too much trouble. Narinda sorted everything We are signing for our house this weekend.
I would recommend this company, the service was excellent!
I really would recommend this company, the service was excellent! Got my mortgage in principal very quickly, and this was with complexities of self employment.
Rated 4.8 out of 5 stars across Trustpilot, Feefo and Google
Why Use Online Mortgage Advisor?
While it’s not impossible to get a mortgage when you’re newly self-employed, it is a more difficult process than if you had been trading for a number of years. Plus, there are fewer choices available to you in terms of mortgage providers. That’s where we can help!
We can connect you with a specialist broker who will know what lenders will consider your application as a newly self-employed person and what you will need to do for your application to be successful. Therefore, you’re more likely to be approved and improve your chances of securing the best rate possible given your circumstances.
Our free, no-obligation broker matching service will connect you with the best broker for you. Call us on 0808 189 2301 or enquire with us today so we can put you in touch with a specialist.
Speak to an expert in Self-Employed mortgages
Maximise your chance of mortgage approval with a specialist in self-employed mortgages
Yes, bad credit mortgage lenders that consider applicants with one year’s books and credit issues do exist, but with some restrictions.
If you had missed /late payments on credit in the last 12 months you still may be considered, and often any issues with mobile phone companies are ignored.
Yes. If you have one year’s accounts you can get Help to Buy scheme assistance and buy with just a 5% deposit (subject to credit score and usual criteria).
There are very few lenders considering self-employed Help to Buy mortgages, but they do exist and often have very attractive rates.
If a mortgage lender has asked you to prove your income, then no. However, you should keep in mind that many buy-to-let lenders will be more concerned about the property’s rental potential than your earned income.
See our guide to buy-to-let mortgages for the self-employed for more information.
Potentially, yes but it’s likely to be only in quite specific cases. For example, if you’re a professional sports person then your current earnings may have a shelf-life whilst you’re competitive in that particular field – this may influence how a lender views your capacity to maintain your repayments beyond this timeframe.
In reality, most general businesses should not be affected or considered too risky for the purpose of applying for a mortgage.
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