Can you get a mortgage if you’re self-employed?

Most lenders will assess your last 2 years of income, but some will consider your latest year if your business is growing.

Getting a mortgage when you’re self-employed is absolutely possible, but it can be slightly more complex than a standard application.

Lenders want to understand how stable your income is and how likely it is to continue. In this guide, we explain how it works and what you can do to improve your chances.

How do lenders assess self-employed income?

If you’re self-employed, lenders will usually look at:

• Your last 2 years of accounts

• SA302s / tax calculations

• Business bank statements

• Your accountant’s details

Most lenders will use either your average income over 2 years or your latest year, depending on the situation.

What counts as self-employed?

You’re typically classed as self-employed if you own 20–25% or more of a business.

This includes:

• Sole traders

• Limited company directors

• Partnerships

How much can you borrow?

As with employed applicants, borrowing is usually based on income multiples.

Many lenders offer around 4 to 5 times your income (sometimes more) but this depends on:

• Business performance

• Industry stability

• Your overall financial position

What if your income has recently increased?

Some lenders will consider your latest year’s income if your business is growing.

This can significantly improve how much you’re able to borrow.

What can affect your application?

Lenders may look more closely at:

• Fluctuating income

• Gaps in trading history

• Recent changes in business structure

That doesn’t mean you won’t be accepted — it just means choosing the right lender is important.

Do you need a larger deposit?

Not necessarily.

Some lenders offer the same loan to value (LTV) options as employed applicants, but a larger deposit can improve your options and rates.

How can you improve your chances?

To strengthen your application:

• Keep accounts up to date

• Reduce outstanding debts where possible

• Avoid large unexplained transactions

• Work with an accountant

FAQs

Can I get a mortgage if I’ve only been self-employed for 1 year?

Some lenders will consider applicants with 1 year of accounts, but options are more limited.

Do I need 2 years of accounts for a mortgage?

Most lenders prefer 2 years, but some will consider 1 year depending on your circumstances.

How do lenders calculate self-employed income?

Lenders typically use your net profit (sole trader) or salary and dividends (limited company).

Want to see what’s possible if you’re self-employed?

You can get a clearer idea of your borrowing with our mortgage calculator, or explore your options with a mortgage adviser who understands self-employed income.

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