Self-employed mortgages

Most lenders will want to see at least two years of self-employment history. This gives them enough data to assess whether your income is consistent and sustainable enough to support mortgage repayments.
If you've only been self-employed for one year, your options are more limited but not necessarily zero. Some specialist lenders will consider applications with one year's accounts, especially if your income is strong and your deposit is large. A broker can help identify who these lenders are.

An SA302 is HMRC's official tax calculation for a given tax year. It shows your total taxable income and is produced when you file a Self Assessment return. It's the most commonly requested document for self-employed mortgage applications.

You can download your SA302 from your HMRC online account. Most lenders will also want a tax year overview from the same place. Your accountant can help you obtain these if you're unsure.

It can make the application process more complex, but it doesn't reduce your chances if your finances are in order. The key factors are the same as for any applicant: income stability, credit history, deposit size, and affordability.

Where self-employed applicants can struggle is if their declared income is low due to tax planning, if they have less than two years of accounts, or if their income varies significantly from year to year. Addressing these factors before applying will improve your position.

Yes. Directors who own 20% or more of their company are considered self-employed for mortgage purposes. Lenders will look at salary and dividends combined over the last two years.

One common issue for directors is that profit retained inside the company is generally not counted as personal income by lenders, even though it's technically yours. Some lenders are more flexible on this than others. A broker can identify which lenders take a broader view.

Variable income is common for self-employed people, and most lenders have policies to deal with it. Some will average the last two years. Others will use the lower figure to be cautious. If your income has increased, some lenders will place more weight on the most recent year.

The key is being transparent about your income pattern when you speak to a lender or broker. Trying to hide a dip or unexplained variation rarely works and can complicate your application further down the line.

Yes. You can apply for a joint mortgage even if one applicant is employed and one is self-employed. Both incomes will be assessed separately, and both applicants will share responsibility for the repayments.

The self-employed applicant will need to provide their usual income documents alongside the employed applicant's payslips and P60.

You don't have to use a broker, but for self-employed applicants, it's often worth it. Mortgage criteria for self-employed borrowers varies significantly between lenders, and a broker who knows the market can match you to the most suitable lender for your situation and avoid unnecessary credit checks.

If your income is straightforward and you have two clean years of accounts, applying directly to a lender is perfectly viable. If your income is complex, variable, or you've had credit issues, a specialist broker is likely to save you time and improve your outcome.

Yes, many lenders will consider day-rate income for contractors. The typical calculation is your daily rate multiplied by working days in a year (usually based on 46 or 48 weeks).

You'll generally need to provide your current contract, evidence of previous contracts, and ideally two years of continuous contracting history. Lenders will want to understand any gaps between contracts, so be prepared to explain those.

Yes, in most cases. When your current deal ends and you remortgage with a new lender, they will reassess your income based on your current situation. If you now meet the self-employed criteria, which usually means at least two years of accounts, remortgaging should be possible.

If you've only recently gone self-employed, you may find it harder to remortgage competitively until you have more trading history.

However, your current lender will usually offer you the option to switch to a new deal, which may involve fewer income checks. This can be a simpler way to secure a new rate while you build up your track record.”

Yes, it can. Lenders calculate affordability based on your declared taxable income, which is the figure on your SA302. If you've legitimately reduced your taxable profit through allowable expenses, that lower figure is what lenders work from. The trade-off between paying less tax now and borrowing more on a mortgage later is something worth discussing with your accountant before you apply.

Most mainstream lenders won't consider you with less than two years' trading history. However, some specialist lenders will look at one year of accounts if your income is strong and your deposit is substantial. An experienced mortgage broker can identify which lenders are open to this and on what terms.

Generally not. Lenders need evidence of income you've already earned and reported to HMRC. Projections or forecasts are rarely accepted as a primary income document. The exception is contractors who can sometimes reference a current signed contract alongside their accounts, but this varies by lender.

Yes, it does. Lenders typically want accounts prepared by a member of a recognised professional body, such as ACCA (Association of Chartered Certified Accountants) or ICAEW (Institute of Chartered Accountants in England and Wales). Accounts prepared by an unqualified bookkeeper or self-prepared carry less weight and may not be accepted by some lenders.

Some people have a mix of employed income from one source and self-employed income from another. Most lenders will consider both, but they'll assess each income stream separately and may apply different levels of confidence to each. Make sure you have documentation for both sources.

Seasonal income, where earnings are high in certain months and low in others, is assessed over the full tax year. Lenders look at the annual total rather than individual months. The two-year average approach still applies, so two years of strong annual totals will generally work in your favour.

This combination makes a mainstream mortgage application harder, but specialist lenders like us here a Nottingham Building Society do exist who cater to complex cases. The size of your deposit and how old any credit issues are will both influence your options. The more recent the issue, the harder it is. Being honest with a broker about your full situation, including any credit history, will lead to better advice than holding back information.

Yes. There's no rule that prevents self-employed people from accessing first-time buyer mortgage products. Any government-backed schemes in place at the time of your application will also typically be available to you, subject to the usual eligibility criteria.

The process for verifying your income is the same regardless of the mortgage type you choose. Whether you're applying for a fixed rate, tracker, repayment, or interest-only mortgage, you'll need the same income documentation. The choice of mortgage type is separate from how your self-employed income is assessed.