Income evidence matters
Accounts, tax calculations, bank statements and contracts may help a lender understand the income available to support the mortgage.
Self-employed mortgages
Self-employed? The way your income is assessed can matter as much as how much you earn. Different lenders may calculate and evidence income differently, so understanding the detail is important.
Can you get a mortgage if you’re self-employed?
There is not necessarily a separate mortgage product called a self-employed mortgage. The main difference is often how a lender verifies income, decides what is sustainable and reviews trading history, business structure and recent changes.
Lenders can differ
Two lenders may assess the same business owner differently. This is why the structure of your income and the evidence available should be explained clearly.
How lenders may assess self-employed income
Sole trader mortgage
A sole trader’s assessment may consider net profit, tax calculations, tax year overviews and accounts. Lenders do not all use the same calculation.
Company director mortgage
A limited company director may be assessed using salary and dividends, share of company profit, retained profit or another method where lender criteria allow. This can produce different results between lenders.
Contractor mortgage
Contract income may be assessed using day rate, contract history, remaining term, industry experience and evidence of future work.
CIS mortgage
Construction Industry Scheme income may be assessed differently from standard PAYE. Payslips, tax documents and accounts may be relevant depending on the circumstances.
Can you get a mortgage with one year’s accounts?
Some lenders may consider a recently self-employed applicant with one year of accounts or one year’s trading evidence. This is not automatic. Previous employment in the same industry, latest accounts, tax returns, business performance, deposit, credit profile and overall affordability may all matter.
A mortgage with 1 year accounts can depend on the quality and consistency of the evidence as well as the length of trading. Do not assume that one lender’s criteria apply everywhere.
What if you have two or more years of accounts?
A longer trading history can give a lender more information about sustainable income. A lender may consider an average, the latest year or another calculation, and may ask questions if income is increasing or declining. The approach remains lender-specific.
What is an SA302 and why might a lender ask for one?
An SA302 is a tax calculation showing information submitted to HMRC for a tax year. A lender may ask for SA302s and tax year overviews as part of checking declared income, but supporting accounts, bank statements or other evidence may also be needed. Exact requirements depend on your business structure and the lender.
Can retained company profits be used for a mortgage?
A limited company director may leave profit in the business rather than withdraw it all as dividends. Some lenders may consider retained profits or company net profit under their criteria, while others may focus on salary and dividends. This difference can affect how the same business income is viewed.
Whether to withdraw or retain profit is a business and tax decision, not a mortgage recommendation. Speak to your accountant or qualified tax advisor before changing how you pay yourself.
How much could a self-employed applicant borrow?
The amount depends on assessed sustainable income, expenditure, loans and cards, deposit or equity, mortgage term, credit profile, property and lender-specific income assessment. A calculator or income multiple can be a starting point, but it cannot guarantee a borrowing figure. If you are planning a purchase, use our deposit calculator to illustrate the funds not covered by the mortgage.
Questions an advisor may ask
- How is the business structured?
- How long have you traded?
- What income was declared?
- Has income changed recently?
- What commitments and deposit do you have?
Income is only part of affordability
Regular spending, credit commitments, term and the property also affect the lender’s assessment.
What documents are needed for a self-employed mortgage?
The exact evidence required depends on your structure and lender. Potential documents include:
- Business accounts
- SA302s and tax year overviews
- Personal and business bank statements where requested
- Identification and address history
- Proof of deposit or equity
- Contracts or day-rate evidence for contractors
- Company information for directors
What if you have recently become self-employed?
If you left PAYE employment, started a company, moved into contracting or changed business structure, explain the change clearly. Experience in the same industry, available trading evidence and current business performance may be relevant to some lender assessments. Acceptance is not guaranteed.
Self-employed first-time buyers, remortgages and bad credit
Self-employed first-time buyer
If you are buying your first home, see the First-time buyer guide as well as preparing your self-employed income evidence.
Self-employed remortgage
If you became self-employed after taking your existing mortgage, the Remortgage guide explains the wider timing and cost considerations.
Self-employed with bad credit
The combination may narrow available options, but it does not by itself establish whether a mortgage is or is not possible. Discuss the combination with an advisor, as the available route depends on income evidence, credit history, deposit and lender criteria.
Self-employed Buy to Let
If you are considering property for letting, the Buy to Let page covers rental assessment and ownership questions.
Self-employed mortgage process
Identify your structure
Confirm whether you are a sole trader, director, contractor or CIS worker.
Review income evidence
Gather accounts, tax documents and supporting information.
Understand deposit or equity
Check the funds available and wider purchase costs.
Assess affordability
Include commitments, spending, term and property.
Match lender criteria
Compare how different lenders may assess income.
Obtain an AIP where appropriate
Use an indication to guide your plans.
Submit the application
Provide accurate details and requested evidence.
Underwriting and valuation
The lender checks income, property and application.
Offer and completion
Progress the legal process once the mortgage is approved.
Self-employed mortgage FAQs
Can I get a mortgage if I’m self-employed?
Yes, self-employed applicants can be considered. The key issue is often how income is verified and calculated under the lender’s criteria.
Is it harder to get a mortgage when self-employed?
It is not automatically harder, but evidence and income assessment can be more involved, especially where trading history or income has changed.
How many years of accounts do I need?
Lenders have different requirements. Some may consider shorter trading histories while others want more evidence of sustainable income.
Can I get a mortgage with one year’s accounts?
Some lenders may consider one year of accounts, subject to income, previous experience, deposit, credit profile and overall affordability. It is not automatic.
How do lenders calculate self-employed income?
Approaches vary. A lender may consider net profit, salary, dividends, company profit or other evidence depending on your business structure.
What is an SA302?
An SA302 is a tax calculation showing information submitted to HMRC for a tax year. A lender may also request tax year overviews and supporting evidence.
Do I need SA302s for a mortgage?
Not necessarily. Evidence requirements depend on your structure, lender and circumstances, and may include accounts, bank statements and other documents.
Can a company director use retained profits for a mortgage?
Some lenders may consider retained profits under their criteria, while others may use salary and dividends. The same income can therefore be assessed differently.
Can lenders use company net profit?
Some lenders may consider company net profit, subject to ownership, trading and affordability criteria. It is not a universal approach.
How are dividends treated for a mortgage?
Lenders differ. Some may use dividends alongside salary, while others may require additional company-profit evidence or use a different calculation.
Can contractors get mortgages?
Contractors can be considered. Lenders may review day rate, contract history, remaining term, industry experience and the way income is evidenced.
Can CIS workers get a mortgage?
CIS workers can be considered, but lenders may assess Construction Industry Scheme income differently and request payslips, tax documents or accounts.
Can I get a mortgage shortly after becoming self-employed?
Possibly. Previous employment in the same industry, business performance, available accounts, deposit and lender criteria may all be relevant.
Can I get a first-time-buyer mortgage when self-employed?
Yes, self-employed first-time buyers can be considered. For deposit and buying-process guidance, see the First-time buyer page.
Can I remortgage after becoming self-employed?
You may be able to. Read our remortgage guidance and discuss how the lender will assess current income and evidence.
How much could I borrow when self-employed?
The amount depends on assessed sustainable income, expenditure, commitments, deposit or equity, term, property and lender criteria. Use our borrowing calculator for an initial illustration, but there is no guaranteed salary multiple.
Ready to explore your self-employed mortgage options?
A mortgage advisor can review your business structure, income evidence, deposit and goals, then explain potentially suitable routes. Lender criteria and products can change.