Self Employed Mortgages

Being self employed does not necessarily make getting a mortgage more difficult, but the way lenders assess your income can be different.

From sole traders and freelancers to contractors and limited company directors, lenders have different approaches to calculating affordability. Some may use trading profits, while others can consider salary and dividends, retained profits or contract income.

SynergiseUK introduces you to specialist mortgage brokers who understand self employed income and can assess which lenders and mortgage options may be suitable for your circumstances.

SynergiseUK is an introducer, not a mortgage broker or lender. Mortgage advice is provided by the authorised specialist you are introduced to.

If you are ready to explore your options, you can Start Your Enquiry to begin the process of speaking with a specialist.

What Is a Self Employed Mortgage?

A self employed mortgage is not usually a separate type of mortgage. It is a standard mortgage where the lender assesses income differently because the applicant does not receive a conventional employed salary.

You may be treated as self employed for mortgage purposes if you are a:

• Sole trader
• Limited company director
• Partner in a business
• Freelancer
• Contractor
• Consultant
• Small business owner

The key difference is generally how your income is evidenced and how individual lenders calculate the amount they may be prepared to lend.

How Do Lenders Assess Self Employed Income?

There is no single approach used by every mortgage lender.

Depending on how your business is structured, lenders may consider:

• SA302s or HMRC tax calculations
• Tax year overviews
• Certified or finalised business accounts
• Net profit for sole traders
• Your share of partnership profits
• Director's salary and dividends
• Salary plus a share of company profits
• Retained profits within a limited company
• Current contracts or day rates for some contractors
• Business and personal bank statements

Many lenders prefer applicants to have at least two years of trading history, although this is not universal.

If you have only recently become self employed, options may still be available. Some lenders can consider applicants with one year of accounts, subject to their individual criteria and the strength of the overall application.

Mortgages for Limited Company Directors

Limited company directors can sometimes encounter difficulties because the income shown on their personal tax return may not represent the full financial performance of their business.

For example, a director may deliberately take a relatively modest salary and dividends while retaining profits within the company.

Some lenders assess affordability primarily using salary and dividends. Others may be prepared to consider salary alongside a share of the company's retained or net profits.

The difference between these approaches can have a significant impact on borrowing potential.

A specialist broker can review how you take income from your company and identify lenders whose criteria may be better suited to your circumstances.

Mortgages for Sole Traders

If you are a sole trader, lenders will commonly look at your declared taxable profits when assessing affordability.

They may use your latest year's figures, an average over two or more years, or take a more cautious approach where profits have recently fallen.

A strong recent trading year does not automatically mean every lender will use the higher figure. This is one reason comparing lender criteria can be particularly important for self employed applicants.

Mortgages for Freelancers and Contractors

Freelancers and contractors can have income that varies considerably throughout the year.

Depending on your occupation, trading history and contractual arrangements, some lenders may assess you using conventional self employed accounts. Others may consider your current contract, day rate or annualised contract income.

This can be particularly relevant to IT contractors, consultants and professionals who operate through their own limited company.

Can I Get a Mortgage With One Year of Accounts?

Potentially.

Although a longer trading history can provide lenders with more evidence of sustainable income, having only one year's accounts does not automatically prevent you from getting a mortgage.

Some lenders may consider applicants who have been trading for around 12 months, particularly where there is evidence of relevant previous employment or experience in the same industry.

Eligibility will depend on factors including your income, deposit, credit history, existing commitments and the lender's criteria.

For more information, see our Mortgages With One Year Accounts page.

Benefits of Using a Specialist Mortgage Broker

Self employed mortgage applications can benefit from a broker who understands the different ways lenders assess business income.

A specialist may be able to:

• Review how your income is structured
• Identify lenders whose criteria fit your circumstances
• Consider lenders beyond your existing bank
• Explain what financial documents may be required
• Assess options where income has increased or fluctuated
• Consider lenders that may use retained company profits
• Help present your income and supporting documentation clearly
• Manage the mortgage application through to completion

In some cases, specialist brokers may have access to lender products or criteria not always available on the high street.

Who May Consider a Self Employed Mortgage?

Specialist mortgage support may be useful if you:

• Have recently become self employed
• Have only one year's accounts
• Are a limited company director
• Retain profits within your company
• Receive a combination of salary and dividends
• Have fluctuating annual income
• Work on fixed-term contracts
• Receive a day rate
• Have recently increased your income
• Have several different sources of income
• Are looking to buy your first home
• Want to move home
• Need to remortgage

Having a more complex income structure does not necessarily mean you cannot obtain a competitive mortgage. The important factor is finding a lender whose assessment criteria are appropriate for your circumstances.

How It Works

1. Tell Us About Your Circumstances

Provide some basic information about your employment or business structure, income and the mortgage you are looking for.

2. We Introduce You to a Specialist

SynergiseUK can introduce you to a carefully selected independent mortgage specialist with experience in self employed applications.

3. Your Mortgage Options Are Assessed

The specialist will review your circumstances, affordability and available mortgage options before providing regulated mortgage advice where appropriate.

4. Application Support

If you decide to proceed, your mortgage specialist can help with the application and supporting documentation required by the lender.

You can Start Your Enquiry at any stage to begin speaking with a specialist about your circumstances.

Why Choose SynergiseUK?

SynergiseUK is a professional referral network connecting individuals and businesses with carefully selected independent specialists throughout the UK.

For self employed mortgages, we can introduce you to mortgage professionals experienced in working with sole traders, company directors, contractors, freelancers and applicants with more complex income structures.

We do not provide mortgage advice or make lending decisions. Our role is to help you find an appropriate specialist who can assess your circumstances and discuss the available options.

Speak to a Self Employed Mortgage Specialist

If you are self employed and would like to understand what mortgage options may be available, SynergiseUK can introduce you to a specialist experienced in assessing different forms of business and self employed income.

Start Your Enquiry today with no obligation and begin the process of speaking with a mortgage specialist.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.