Question 1

How long do I need to be self-employed before I can get a mortgage?

Accepted Answer

Many lenders prefer two or three years of accounts or tax calculations, but some will consider applicants with just one year of self-employment, subject to their criteria. The right lender for you often depends on your trading history, your profession and the strength of your wider profile, not just the calendar.

Question 2

How is my income worked out as a sole trader?

Accepted Answer

Most lenders use the net profit figure shown on your SA302 tax calculations or HMRC tax year overviews. Lenders typically average the last two or three years, although some will use the latest year if it is higher. The way your accountant presents your figures can make a real difference.

Question 3

I am a limited company director, what income will lenders use?

Accepted Answer

Some lenders use salary plus dividends taken from the company. Others use salary plus your share of net profit retained in the business, which can be helpful if you leave profit in the company for tax efficiency. The choice of lender is therefore particularly important for directors.

Question 4

Can contractors borrow based on day or contract rate?

Accepted Answer

Several lenders will consider contractors based on day rate, typically calculated as day rate × 5 × 46 weeks (or similar formula), rather than relying on accounts. Eligibility depends on factors such as your contract length, gaps between contracts and time in the industry. This route can be much more generous than standard self-employed underwriting.

Question 5

What documents will I need?

Accepted Answer

Typically the last two or three years of SA302s and tax year overviews, finalised accounts where applicable, business and personal bank statements, ID and address verification, and a current accountant's reference for some lenders. We will give you a clear list before you spend time gathering anything.

Question 6

Will I pay a higher rate because I am self-employed?

Accepted Answer

Not automatically. With the right lender, self-employed borrowers can access the same mainstream rates as employed applicants. Higher rates usually only apply if circumstances also involve adverse credit, complex income or a high loan-to-value, not simply because you work for yourself.

Self-employed? Your income deserves the right lender.

Self-employed mortgage questions

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