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Self-Employed Mortgages Explained

Self-employed? Your mortgage advice made simple.

Getting a mortgage when you’re self-employed can present  challenges. Although, with the right guidance and preparation you should have no issues.

Discover your borrowing power with NO credit checks, only takes a few minutes!

See what's possible
Get guided help

Self-Employed Mortgages Explained

Self-employed? Your mortgage advice made simple.

Getting a mortgage when you’re self-employed can present  challenges. Although, with the right guidance and preparation you should have no issues.

Discover your borrowing power with NO credit checks, only takes a few minutes!

See what's possible
Get guided help
Author's Avatar Author: Carl Shave CEO and co-founder

6 mins

Updated: September 11th, 2025

Contents

6 mins

Updated: September 11th, 2025

In this article

What is a self-employed mortgage? Getting a self-employed mortgage How much can I borrow if I'm self-employed? Do self-employed applicants pay higher interest rates? What can you do to improve your chances of success?

 

Self-employment often includes people like freelancers, contractors, and sole traders. It can also include limited company directors, individual partners and others earning from their own businesses, not fixed salaries.

What is a self-employed mortgage?

Technically, there’s no exclusive “self-employed mortgage” product, instead the mortgages available to you will be the same as everyone else. However, as your income is different to someone in conventional employment, the way a lender will assess it is also slightly different, making it a bit more of a complex process.

Lenders will assess your income, credit, and deposit size to help determine what type of deals you can access. If your affordability is seen as favourable, due to things like a good credit score, sizeable deposit, and evidence of consistent income, you will likely be able to access favourable products and interest rates.

However, if you are seen as a ‘riskier’ borrower by lenders, due to things like a bad credit history or smaller deposit, the interest rate you are offered may be higher.

The below highlight some of the people that will be seen as self-employed:

Getting a self-employed mortgage

When assessing your application and affordability for a mortgage, lenders usually base their calculations for mortgage decisions on historical data rather than current or projected income. This gives them more certainty, rather than solely relying on project figures.

Typically, lenders will want to see what your business has earnt over the past 2–3 years. You can show this through your SA302 tax calculation documents or your full company accounts, which must be verified by a qualified accountant. However, it certain cases it is possible to get a mortgage only using one year’s worth of accounts.

Some other things lenders can and may look at when assessing your application include:

  • Basing figures on retained profit.
  • Working with accountant’s certificates.
  • Allowing for income via umbrella companies.

You should also note that there are rules for contractors who don’t need to worry about maintaining formal accounts.

Besides from your company accounts and SSA302, everything else required by lenders is pretty much the same as any other applicant:

  • Proof of identify – driving licence or passport
  • Proof of address – utility or council tax bill dated within the past 3 months
  • Personal and business bank statements – used to help assess both income and expenditure, as well as proving your deposit

If you have any questions about any documentation you are required to provide, feel free to reach out and one of our expert advisors will be happy to help.

As a self-employed individual you won’t be required to put down a larger deposit than any other applicant. Instead, the same deposit requirements apply.

Typically, lenders like to have 5–10% of the property’s value as a minimum. However, if you want to access more favourable mortgage products then providing a higher deposit than this is recommended.

How much can I borrow if I’m self-employed?

Lenders vary considerably in how they calculate an income figure for self-employed mortgage applicants. Some may use your income from the previous year, while others use an average of your income from the past 2 or 3 years. On top of this everyone’s application is different, meaning it can be hard to give you an exact idea of what you could borrow.

However, as a guide most lenders will typically allow you to borrow between 4 and 5 times you yearly income. This is providing you demonstrate good affordability, through things like consistent income and a clean credit history.

For example, if you make £35,000 annually you could potentially borrow £175,000, as this would be 5 times your income. This could be increased if you apply with a partner, as both incomes will be considered.

Each lender will have different criteria for considering direct income, salary, limited company director dividends, and retained profits. They employ various methods for income calculation, but once they establish it, standard lender criteria determine your borrowing limit.

To get a more accurate idea of what you could borrow, why not give our free self-employed mortgage calculator a go!

Do self-employed applicants pay higher interest rates?

No, self-employed people typically do not face higher interest rates when applying for a mortgage. Instead, just like with any applicant, lenders prioritise the applicant’s ability to repay the loan, regardless of employment type. And if they deem you to be a risky borrower, they may impose certain conditions, like a higher than average interest rate.

However, assessing income for the self-employed can be more complex because of variable earnings, which could lead to you paying a higher interest rate if your income is not presented correctly. Therefore, in order to secure a competitive interest rate you should:

  • Strengthen your business case with signed contracts, verified accounts, and evidence of orders.
  • Save for a larger deposit to reduce the risk a lender is exposed to.
  • Maintain a clean credit history, checking for errors and using a credit card responsibly to build credit.

Presenting a strong application by doing your best to follow these steps, you are more likely to secure a favourable mortgage rate.

What can you do to improve your chances of success?

While this is easier said than done, providing a larger-than-average deposit can be very beneficial to your application. This is because the loan-to-value ratio of your mortgage product will be reduced, essentially meaning that a lender will be lending you a lower percentage of the property value.

This means that less of their capital will be at risk in your property, which can not only increase your chances of success, but also allow you to unlock competitive mortgage products with lower interest rates.

Your credit plays a big part in a lender’s affordability assessment, so having a good credit score when applying can help your case. A good credit score demonstrates to lenders that you are able to borrow money and repay it on time and in full.

If you have a bad credit history, you will be seen as a riskier borrower, which can lead to your application being rejected or certain requirements be put in place by your lender. Two common things that bad credit applicants may have to accept is higher interest rates or larger deposit requirements.

If you have a less-than-perfect credit history, give our guide a read as it highlights some of our top tips on how to improve your credit score.

At Just Mortgage Brokers, we secure exclusive deals through our strong lender relationships, increasing your options and chances of success.

Our specialist self-employed mortgage advisors understand the complexities of self-employment and will be able to assess your unique situation, recommend the right lender and product.

If you want to get started, reach out to organise a free initial consultation.

FREQUENTLY ASKED QUESTIONS

Using retained business profits for a mortgage can be challenging, however, it is possible to find lenders who will consider your retained profits.

Most mainstream self-employed mortgage lenders calculate affordability based on salary and dividends. Therefore, you may need to use a specialist lender who will look at your retained profits, in turn this could allow you to borrow more.

Typically, you won’t be able to get a mortgage solely based on your dividend income, as many mortgage lenders wont consider it as a stable source of income.

Instead, lenders will look at your dividend income in addition to things like your salary to give them a rounded idea of your affordability.

No, you will always need to prove your income to lenders. The process may involve verifying income with HMRC. One of the key things that lenders need to assess is a potential applicant’s affordability, as they want to know you can afford to make your monthly mortgage payments.

Yes, self-employed individuals are able to get mortgages even if they have bad credit.

However, securing a mortgage with a bad credit history can present a significant challenge depending on the severity of the credit event(s) and time that has passed since.

You’ll be please to know that we specialise in bad credit mortgages and can help you acquire a mortgage product, even with a less than perfect score.

About the author

Author's Avatar

Carl Shave: CEO and co-founder

Carl Shave has been involved in the mortgage & finance industry since leaving education and is one of the co-founders of Just Mortgage Brokers. He has written guest posts and provided journalist comments for companies such as The Times, FT Adviser, Mortgage Strategy, Mortgage Solutions and others, demonstrating his extensive industry knowledge.

Qualifications:
Certificate in Mortgage Advice and Practice (CEMAP): Year Attained: 2001

FCA Profile
Author's Avatar

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