How self-employed mortgages work
The mortgage itself is usually the same as one offered to an employed applicant. The difference is how income is evidenced and assessed.
A sole trader may be assessed using taxable profit, while a limited company director may be assessed using salary, dividends or company profit. Contractors may sometimes be assessed using contract or day-rate income.
How many years of accounts are needed?
Two years is a common starting point, but it is not a universal rule. Some lenders can consider one full year of trading, particularly where the business is well established in its sector or follows directly from employed experience.
A shorter history can mean fewer lender choices, so the wider context matters.
Documents to prepare
Exact requirements depend on the applicant and lender, but these are commonly requested.
- Latest accounts or tax calculations
- Tax Year Overviews
- Personal and business bank statements
- Current contracts where applicable
- Deposit evidence and credit report
Why specialist advice can help
A good outcome is not simply about finding a lender that accepts self-employment. It is about choosing one whose calculation suits your trading structure and current figures, then presenting the evidence clearly.
Frequently asked questions
Do self-employed borrowers pay higher mortgage rates?+
Not simply because they are self-employed. The available rate depends on the full application, including deposit, credit profile, property and lender criteria.
Can I use my latest year’s income?+
Some lenders may use the latest year where income has increased, while others average two years or use the lower figure.
Can a contractor use day-rate income?+
Some lenders use a contract-based calculation subject to the contract terms, experience, gaps and time remaining.