| Trading history usually needed | Two years; some lenders accept one |
|---|---|
| Income evidence | SA302s and tax year overviews, or accounts |
| Directors' income | Salary plus dividends, or share of net profit |
| Contractors | Day rate may be annualised by some lenders |
| Typical deposit | From 5–10%, as for employed borrowers |
| Regulation | FCA-regulated residential mortgage |
Who is this for?
- Sole traders and partners in partnerships or LLPs
- Limited company directors who take salary and dividends
- Contractors and freelancers on day rates
- Business owners who retain profit in the company
- Newly self-employed people with one year's figures
Can I get a mortgage if I am self-employed?
Yes. Self-employed borrowers can access the same mortgages as employed borrowers. The difference is how lenders prove and average your income. Most want two years of figures, though some accept one year, or less for contractors moving from employment in the same field.
Lenders typically use your tax calculations and tax year overviews from HMRC, or accounts prepared by a qualified accountant. Our guide to self-employed mortgage income goes into more detail.
Self-employed borrowers can choose from the same fixed, tracker and offset products as anyone else. An offset mortgage can suit business owners who hold cash for tax bills, as savings reduce the interest charged.
How do lenders calculate income for company directors?
Most lenders use salary plus dividends taken from the company. This can understate your income if you leave profit in the business for tax reasons. Some lenders will instead use your share of the company's net profit, before or after corporation tax.
This difference can change your borrowing significantly. Lenders may also look at the trend: falling profits can lead them to use the lower year. We check which approach gives the fairest view of your income.
If you are a director, ask your accountant for the company's latest accounts and a breakdown of salary, dividends and retained profit. This helps us identify the lenders most likely to take a favourable view.
How are contractors assessed?
Many lenders annualise a contractor's day rate, for example day rate times five days times a set number of weeks. They typically ask for a current contract and evidence of contracting history. Some lenders accept contractors with a short history if they previously worked in the same field.
Whether you work through a limited company or an umbrella company affects which approach a lender uses. IR35 status can also be relevant.
Lenders may also look at how long you have been contracting, the length of your current contract and any gaps between contracts. A track record of renewals or repeat clients helps.
What documents do self-employed applicants need?
- Two years' SA302 tax calculations and tax year overviews
- Or two to three years' certified accounts
- Recent business and personal bank statements
- An accountant's reference or certificate, for some lenders
- Contracts, for contractors
- ID, proof of address and proof of deposit
See our full mortgage documents checklist. Having your latest tax return filed early can help, especially if income has grown.
Does my business structure change what I can borrow?
It can. Sole traders are usually assessed on net profit from their tax calculations. Partners and LLP members are assessed on their share of partnership profit. Limited company directors may be assessed on salary and dividends, or on their share of company profit, depending on the lender.
If you have recently changed structure, for example from sole trader to limited company, some lenders will combine your trading history. Others want to see figures under the new structure. Owning less than a set percentage of a company, often 20–25%, may mean you are treated as employed. Tell us how your business is set up so we can find lenders that read it fairly.
Why use a specialist broker if I am self-employed?
Lender policies on self-employed income vary more than almost any other area. Choosing the wrong lender can mean borrowing less than you could, or being declined. OMB regularly helps business owners, company directors and contractors, including clients with complex structures and international income.
We review your accounts before applying, explain how each lender would read them and present your case clearly. If your income is particularly complex or high, a private bank may also be worth considering.
Run the numbersAn indicative borrowing range based on income, commitments and deposit.
How much can I borrow?How we arrange it
- Free 15-minute call about your business and income
- Review of accounts or tax calculations
- Lenders matched to your income structure
- Application, accountant liaison and valuation
- Mortgage offer and completion
Example cases
Illustrative examples based on the type of case we arrange. Not specific clients; every case is different.
£450,000 purchase in Reading with only one year's accounts
£260,000 remortgage in Nottingham for a sole trader after a dip in profits
£720,000 purchase in Islington using a director's retained company profits
From the blog5 mistakes self-employed borrowers make before applying for a mortgage
Read the articleFrequently asked questions
How many years of accounts do I need for a mortgage?
Most lenders want two years of accounts or tax calculations. Some accept one year, particularly if you were previously employed in the same line of work. A few specialist lenders accept less. More history gives you a wider choice of lenders and potentially better terms.
Can I get a mortgage with one year's accounts?
Yes, some lenders accept one full year of self-employed figures. They may look at your previous employment, qualifications and the strength of your business. Lender choice is narrower than with two years, but competitive options can exist. We know which lenders take this approach.
Do lenders use net profit or dividends for directors?
Most lenders use salary plus dividends. Some will use salary plus your share of net profit, which can be higher if you retain profit in the company. The approach can make a big difference to how much you can borrow. We identify lenders that use the method that suits you.
What is an SA302?
An SA302 is a tax calculation from HMRC showing your income and tax due for a tax year. Lenders usually ask for it alongside the matching tax year overview. You can download both from your HMRC online account, or your accountant can provide them.
Can contractors get a mortgage based on day rate?
Yes, many lenders annualise a contractor's day rate. They will want a current contract and, often, evidence of past contracts or a minimum contracting history. Gaps between contracts and the length of the current one may be considered. Some lenders also accept umbrella company payslips.
My profits fell last year. Can I still get a mortgage?
Possibly. Many lenders use the lower of the last two years, or an average if income is rising. A fall in profit may reduce how much you can borrow. Some lenders will consider an explanation, such as a one-off investment in the business. We look at lenders' approaches to declining income.
Are mortgage rates higher for self-employed people?
Usually not. Self-employed borrowers can access the same products and rates as employed borrowers if they meet the criteria. Specialist lenders may charge more for short trading histories or complex cases. Your deposit and credit history matter more than your employment type.
Do I need an accountant to get a self-employed mortgage?
It is not always essential, as many lenders accept HMRC tax calculations. Some lenders want accounts prepared by a qualified accountant or an accountant's reference. A good accountant can also help explain income and retained profit to lenders. Some lenders also accept chartered or certified bookkeepers' figures.
Can I get a mortgage if I am a partner in an LLP?
Yes. Lenders usually assess your share of the partnership's profit, using tax calculations, partnership accounts or confirmation from the firm. Newly appointed partners may be assessed using a partnership agreement or confirmation of drawings and profit share. Policies vary between lenders.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice: up to 1% of the loan, typically £500.