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Self employed mortgages with 2 years accounts

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 21st January 2020 *

If you’ve been self-employed for less than 3 years and are looking for a mortgage, we have just the solution. In this guide, you'll learn how to get the best deals available if you only have two years of trading history under your belt and where you can turn for the right advice.

The following topics are covered below...

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Can I get a mortgage with only two years' accounts?

This is an enquiry our self-employment specialists receive on an almost daily basis, and the answer is definitely yes.

If you need a self-employment mortgage, two years' accounts is more than sufficient. Although there are some mortgage lenders who will ask for at least three years' trading history, others are more flexible and will be more than happy to offer favourable rates to someone with two or less.

Make an enquiry and we'll introduce you to a whole-of-market broker who will make sure you're paired up with a lender who offers the best deals to a self-employed professional with two years' accounts.

How much can I borrow?

This will depend on the type of self-employed professional you are and how the mortgage lender calculates your affordability.

If you're a sole trader or working in a partnership, the figure will either be based on your share of the net profit evidenced in your two years' accounts, or the ‘total income received’ on a self-assessment tax return (SA302s).

Mortgages for directors of limited companies are slightly different. These loans are usually based on the director's salary and dividend received.

Once your income has been established, most lenders will multiply the figure by 4-4.5, some by x5 and a minority x6 to establish the maximum amount you'd be able to borrow, subject to their eligibility criteria.

How do I get the best rates with two years' accounts?

The best rates for a self-employment mortgage might be harder to come by if you only have two years of trading history, since the mortgage lender will find it more difficult to get a clear picture of your earning potential during the term of the agreement.

That said, there are still plenty of lenders willing to provide favourable deals for people who have been self-employed for less than three years. The most important thing to consider when you're in search of the best rates is that you need to find the lender who is best positioned to offer them to someone with your exact profile.

The key to this is having access to the entire market, and the advisors we work with can provide exactly that. They are whole-of-market brokers who arrange mortgages for self-employed customers with limited trading history every day. Make an enquiry to speak to one of them on the phone today.

What else will the lender consider when determining my eligibility?

Other factors that will impact the rates you end up with include...

  • Your credit report: A specialist lender might be needed if you're looking to get a mortgage with bad credit.
  • How much deposit you have: It's possible to get a self-employed mortgage with as little as 5% deposit, but the more, the better.
  • Your age: Some lenders might be cautious if the mortgage term is due to run into your retirement.
  • The property type: Non-standard construction properties often call for a specialist lender.

Make an enquiry to find out more about how these factors can come into play or hit the links for our dedicated articles on each topic.

Can I get a mortgage without two years' tax returns?

Yes, although your choice of approachable mortgage lenders is likely to be slimmer. The advisors we work with have access to specialist mortgage providers who are willing to offer finance to self-employed customers who have been trading for 12 months or less, under the right circumstances.

Read our guide to getting a mortgage with one year's accounts for more information.

Speak to a self-employment mortgage expert

Regardless of how much trading history and tax returns you have behind you, it pays to seek specialist advice before you apply for a self-employed mortgage.

Talking to a whole-of-market broker before you proceed could be the difference between finding the lender who's best positioned to offer you the most favourable rates, and one who charges more interest due to your relatively limited accounts.

Call 0808 189 2301 or Make an enquiry to speak to one of the experts we work with today. We won't charge a penny for introducing you to them, there's no obligation to act on their advice and your credit report won't be affected.

Updated: 21st January 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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