Self-employed mortgage advice

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. Others use an average of your income from the past two or three years.

Lenders 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.

How do I get the right mortgage deal if I'm self-employed?

Lenders offer the same rates for both the employed and self-employed. Our mortgage advisors analyse all the products that are available to find the best deal for you. This involves reviewing initial and ongoing rates, lender fees, and other hidden costs or benefits linked to the mortgage offer.

I have previously been declined a mortgage - can I still get one?

Being declined a mortgage by your bank is not an indication that you cannot get a mortgage. Every bank, building society and lending institution has its own criteria on which they lend on. They even assess a potential mortgage applicant’s credit score on their own internal scoring system.

If your bank declined your mortgage, consult a mortgage broker for assistance.

Can I get a mortgage using retained profits?

Using retained business profits for a mortgage can be challenging. Most lenders calculate affordability based on salary and dividends.
Specialist lenders may consider retained profits, potentially increasing borrowing capacity.

Can I use dividend income to get a mortgage?

Using dividend income for a mortgage is common. Most lenders combine salary and dividends. Complexities arise if drawings exceed company profit.

Self-employed mortgages using last year’s accounts

Lenders differ in using self-employment income for mortgages. Traditionally, three years of net profit averages were common. Yet, some now consider recent higher profits if they’re sustainable.

Can I get a self-employed mortgage with one year’s accounts?

Obtaining a self-employed mortgage with only one year of accounts is feasible. Previously, lenders typically required two to three years, but now one year suffices.

Lenders assessing self-employed mortgage criteria will look at the overall profile of the business accounts.

Getting a mortgage with 1one years’ worth of accounts

Getting a mortgage with two years’ accounts

Some lenders may now consider an application if you have two years’ trading accounts and the associated tax calculations. Typically, lenders use the average of your two years’ net profit for mortgage calculations. Where there is a greater deposit or equity value, lenders are likely to be more accommodating.