Being self-employed shouldn’t stop you from achieving your dream of owning a home. While the mortgage application process can be slightly different compared to employed applicants, there are plenty of lenders who are happy to lend to self-employed borrowers.
Whether you’re a sole trader, company director, freelancer, contractor or partner in a business, understanding what lenders are looking for can help make your mortgage application much smoother.
Can You Get a Mortgage If You’re Self-Employed?
Yes, absolutely.
One of the biggest misconceptions is that it’s harder to get a mortgage if you’re self-employed. In reality, lenders assess self-employed applicants in much the same way as employed applicants—they simply need more evidence of your income.
As long as you can demonstrate that your income is stable and your finances are well managed, you could have access to a wide range of mortgage options.
Who Is Considered Self-Employed?
Most lenders consider you to be self-employed if you own 20–25% or more of a business from which you earn your income.
This includes:
- Sole traders
- Limited company directors
- Business partners
- Freelancers
- Contractors
Each lender has its own criteria, which is why expert mortgage advice can make a real difference.
What Documents Will You Need?
Lenders usually ask for documents that prove your income and financial position. These may include:
- SA302 tax calculations and Tax Year Overviews
- Two years’ accounts (some lenders may accept one year)
- Business bank statements
- Personal bank statements
- Proof of identity and address
- Details of any existing financial commitments
The exact requirements vary between lenders, so it’s worth preparing your paperwork early.
How Many Years of Accounts Do You Need?
Many lenders prefer to see at least two years of trading history.
However, if you’ve only recently become self-employed, don’t assume you can’t get a mortgage. Some lenders are willing to consider applicants with just one year’s accounts, particularly if you have:
- A strong income.
- Experience in the same industry.
- A healthy deposit.
- A good credit history.
Every lender has different lending criteria, so exploring all your options is important.
How Much Can You Borrow?
The amount you can borrow depends on factors such as:
- Your annual income.
- Business profits.
- Salary and dividends (for limited company directors).
- Existing financial commitments.
- Your credit history.
- The size of your deposit.
Most lenders also carry out affordability checks to ensure the mortgage is suitable for your financial circumstances.
What About Limited Company Directors?
If you’re a limited company director, some lenders will assess your income based on your salary and dividends.
Others may also take retained profits into account, which can significantly increase your borrowing potential if profits are left in the business rather than withdrawn.
This is one reason why working with a mortgage adviser can be particularly valuable for company directors.
Tips to Improve Your Chances of Approval
Before applying for a mortgage, consider the following:
- Keep your accounts up to date.
- File your tax returns on time.
- Maintain a good credit score.
- Reduce existing debts where possible.
- Save for a larger deposit.
- Avoid making multiple credit applications.
- Speak to a mortgage adviser before approaching lenders.
Taking these steps can strengthen your application and increase the range of lenders available to you.
Why Use a Mortgage Adviser?
Not all lenders assess self-employed income in the same way. Some are much more flexible than others, particularly for contractors, freelancers and limited company directors.
A mortgage adviser can:
- Search across a wide range of lenders.
- Recommend mortgage products suited to your circumstances.
- Explain the documentation you’ll need.
- Help prepare your application.
- Support you from application through to completion.
- This can save you time, reduce stress and improve your chances of securing the right mortgage.