How to Get a Mortgage When You're Self-Employed

Can You Get a Mortgage If You're Self-Employed?

Absolutely. Self-employed people get mortgages every single day. The myth that it's impossible or significantly harder is outdated. While lenders do assess self-employed applications differently, there are plenty of products available — and many lenders are actively looking to lend to self-employed borrowers.

The key difference is in how you prove your income. Employed applicants show payslips; self-employed applicants need to show their accounts or tax returns.

What Documents Will You Need?

Most lenders will ask for:

• Two to three years of accounts — ideally prepared by a qualified accountant (SA302s or full accounts)
• Corresponding tax year overviews — from HMRC
• Bank statements — usually three to six months of personal and business statements
• Proof of upcoming contracts — if you're a contractor, evidence of future work can help

Some lenders will accept just one year of accounts, which is helpful if you're newly self-employed. The range of requirements varies significantly between lenders, so it's worth shopping around.

How Lenders Calculate Your Income

This is where it gets interesting. Different lenders calculate self-employed income in different ways:

• Sole traders — lenders typically use your net profit figure from your tax return
• Limited company directors — some lenders use salary plus dividends, while others will look at net profit or even retained profits in the business
• Contractors — some specialist lenders will use your day rate multiplied by a set number of weeks, which can give a much higher income figure

The lender you choose can make a huge difference to how much you can borrow. One lender might offer you £200,000 while another, using a different calculation method, might offer £300,000 based on the same accounts.

Tips to Improve Your Chances

There are several things you can do to give yourself the best shot:

• Keep your accounts tidy — use a qualified accountant and file your returns on time
• Be careful with expenses — claiming too many expenses reduces your declared income, which reduces what you can borrow
• Build up a track record — the longer you've been self-employed, the more confident lenders will be
• Maintain a clean credit file — missed payments or defaults will hurt you more as a self-employed applicant
• Save a bigger deposit — a lower LTV offsets some of the perceived risk of self-employment