Working for yourself, owning your own business, freelancing?

There are stricter lending requirements when you are self-employed, freelancing. Self-employed applicants require at least two years of accounts signed off by a certified or chartered accountant for mortgage lenders. 

Lenders will look at a consistent or increasing profit over a number of years and this will help your application, as lenders look at average profits over a period of time to assess your risk profile. From year to year if your income varies dramatically, you might need to provide further evidence of future income, such as new clients or contracts, or be able to prove that you have a significant amount of savings.

Affordability for a self-employed mortgage

You will be required to pass an affordability assessment, so a self-employed applicant must be able to demonstrate their income.

One of the processes to assist is an SA302 form, which is the self-assessment tax form submitted to HMRC to evidence your self-employed income.

Most lenders will request a copy of accounts for your self-employed business for up to the last three years. However, some lenders will simply require a copy of your SA302 form.

How you’ll be assessed as a self-employed mortgage applicant

If you’re self-employed, your situation will generally fall into one of the three categories below. This will affect how a lender assesses you.

If you’re thinking of changing company type (for example, you’re a sole trader thinking of registering as a limited company), it’s sometimes worth waiting until after you’ve been accepted for a mortgage to do this, as company changes can have an adverse effect on your application. If you are unsure, please talk to us about this.

Sole trader

If you’re a one-man-band, you (or your accountant) will declare your income using self-assessment and have your tax calculated by HMRC. Once you’ve done this, you can ask for an SA302 form, which outlines your total income and tax paid. Lenders will then base their mortgage calculations on this information.


If you’re in business with someone else, mortgage lenders will look at your individual share of the profits.

Limited company

If you form a limited company, you’ll be keeping your business accounts separate from your personal ones. As a director, you’ll usually pay yourself a salary and dividend payments, both of which lenders will take into account when you apply for a mortgage.

If you choose to retain profits in the business rather than drawing them out, this can create difficulties, as some lenders don’t factor retained profits into their calculations.

Common problems with self-employed mortgage applications

The most common problem for self-employed people have when applying for a mortgage is they only having accounts dating back 1 year. Many lenders want to see 2-3 years of accounts and a large increase in your income can also be a problem in a mortgage application. Lenders tend to take an average from the last 2-3 years, and when there are big differences between those years then the average they take is less reliable. 

By contacting one of our mortgage brokers, we have access to lenders who will accept applications with just 1 year’s accounts, or use your latest year’s accounts for affordability purposes.

Can you get a joint mortgage if one person is self-employed?

If you are self-employed and your spouse or co-borrower is traditionally employed, most mortgage lenders will be fine with this, provided the self-employment income meets the guidelines listed above and both applicants meet loan requirements.

Getting a Mortgage When Self-Employed With Bad Credit

This can be more challenging if you have experienced credit issues in the past to secure a mortgage, but there are various mortgage options available, with products and lenders for your circumstances which we have access to and are not available on the high street.