Income Presented at Its Best
We identify whether your latest year, a two-year average or your share of company profit gives the strongest borrowing, then target lenders that use that method.
Self-Employed Mortgages
Self-Employed Mortgages That Recognise What You Really Earn
Running your own business should not make getting a mortgage harder, but with the wrong lender it often does. Our self-employed mortgage advisers know which lenders look at net profit, salary and dividends, retained profits or day rates, and present your income in the way that gives you the strongest result.
- Sole traders, directors and contractors
- One year's accounts considered
- Retained profits and day rates
- Free initial consultation
Working for Yourself
Why Self-Employed Borrowers Benefit from a Specialist Broker
Employed applicants simply show payslips. If you are self-employed, lenders have to interpret your accounts or tax calculations, and each lender reads them differently. One may use your latest year, another an average of two years. One may count only your salary and dividends, another your share of the company's net profit.
Those differences can change your maximum borrowing by tens of thousands of pounds. Applying to the wrong lender can also mean a decline that leaves a mark on your credit file, which is why matching your income structure to the right lender is so important.
We regularly arrange mortgages for sole traders, partners, limited company directors, contractors, freelancers and CIS subcontractors, including people with only one year of trading history and those with complex or fluctuating income.
How We Help
Mortgage Advice That Understands Your Business
We speak the language of accounts and tax returns, so you do not have to explain your income from scratch to every lender.
Retained Profit Lenders
If you leave profit in your limited company for tax efficiency, some lenders will count your share of net profit rather than just salary and dividends.
One Year of Accounts
Newly self-employed? Some lenders accept a single year of trading, particularly if you have moved from employment in the same line of work.
Contractor Day-Rate Assessment
Many lenders annualise your day rate from a current contract, often ignoring gaps between contracts, which can be far better than using accounts.
CIS and Freelance Income
We find lenders who assess CIS subcontractors on gross pay from recent statements and freelancers on their combined client income.
Fewer Declines
Our application packaging anticipates underwriter questions about your business, reducing delays and protecting your credit file.
Income Explained
How Lenders Assess Self-Employed Income
Sole traders and partnerships
If you are a sole trader, lenders normally use your net profit from your Self Assessment tax return. For partnerships, they use your share of the partnership profit. Most ask for your last two years' SA302 tax calculations and the matching HMRC tax year overviews, which you can download from your HMRC online account. Some lenders will use the latest year alone if your profits are rising.
Limited company directors
Directors who own 20% or more of their company are usually treated as self-employed. Many lenders calculate your income as your salary plus dividends, as shown on your personal tax return. Others will use your salary plus your share of the company's net profit after Corporation Tax, which helps if you deliberately retain profit in the business. The right choice of lender can make a big difference to your borrowing.
Contractors and day-rate workers
If you work on fixed-term contracts, often in IT, engineering, finance or healthcare, some lenders will calculate your income from your day rate. A common approach is day rate × 5 days × 46 to 48 weeks. Lenders usually want to see a current contract, a track record of contracting and, in some cases, a renewal history. This applies whether you work through your own limited company, an umbrella company or inside IR35.
CIS subcontractors
Construction Industry Scheme workers are often paid with tax already deducted. Some lenders will assess your income using recent payslips or CIS statements and your gross earnings rather than waiting for full tax returns, which can be helpful if your accounts understate your current income.
Newly self-employed
Lenders traditionally wanted two or three years of accounts, but several now accept one full year of trading, and a few will consider less if you have moved into self-employment in the same field. Having your latest tax return filed and your HMRC tax year overview available will widen your options.
Documents to prepare
Typically you will need SA302 tax calculations and tax year overviews for the last one to two years, recent business and personal bank statements, and for limited company directors, your company accounts. Some lenders ask for a letter from your qualified accountant confirming your income.
Eligibility
Self-Employed Borrowers We Help
We arrange mortgages for self-employed people across every sector, including:
- Sole traders and partners in a partnership or LLP
- Limited company directors paid by salary and dividends
- Directors who retain profits in their company
- Day-rate contractors, freelancers and locums
- CIS subcontractors and tradespeople
- Newly self-employed applicants with one year of figures
Planning to apply soon? Speak to us before your accountant finalises your next tax return. Understanding how lenders read your figures can help you plan, although tax decisions should always be made with your accountant.
How It Works
How We Arrange Your Self-Employed Mortgage
- Understand your businessWe review your structure, trading history and how you pay yourself.
- Calculate your income per lenderWe work out what each suitable lender will accept as your income and borrowing.
- Agreement in PrincipleWe secure an AIP with the lender most likely to approve your application.
- Document packagingWe gather your SA302s, tax year overviews, accounts or contracts and present them clearly.
- Offer and completionWe manage underwriter queries through to offer and work with your solicitor to complete.
Self-Employed? Find Out What You Could Borrow
Talk to a self-employed mortgage specialist who understands accounts, dividends and day rates. Your first conversation is free.
FAQs
Self-Employed Mortgage FAQs
The questions business owners, contractors and freelancers ask us most often.
Most lenders prefer two years of accounts or tax returns, but a growing number accept one full year of trading. Some will consider less if you have moved from employment into self-employment in the same industry. We know which lenders are most flexible.
An SA302 is HMRC's tax calculation showing your income and the tax due for a tax year. You can download it, along with the matching tax year overview, from your HMRC online account, or your accountant can provide it.
Many lenders use your salary plus dividends from your personal tax return. Others use your salary plus your share of the company's net profit, which can be higher if you retain profits in the business. Choosing a lender that uses the most favourable method can significantly increase how much you can borrow.
Yes. Many lenders calculate contractor income from your day rate, typically multiplied by five days and 46 to 48 weeks, rather than from your accounts. They usually want to see a current contract and some contracting history.
No. If you meet a lender's criteria, you have access to the same mortgage rates as employed applicants. Specialist lenders may charge more for very recent trading or complex cases, but most self-employed borrowers qualify for mainstream deals.
It can be more challenging, as many lenders use the lower or average figure. Some will consider the latest year if there is a clear explanation, such as investment in the business. We will look at the full picture and find the most suitable lender.
Yes, with selected lenders. You will normally need a full year of filed accounts or a tax return, and lenders may look more favourably on you if you were previously employed in the same line of work.
Explore More
Other Ways We Can Help
Your home may be repossessed if you do not keep up repayments on your mortgage.
We do not give tax or accounting advice. Please speak to your accountant before making decisions about how you draw income from your business.