How to Get a Mortgage When You’re Self-Employed with Just 1 Year of Accounts

Being self-employed can offer flexibility and control over your working life, but it can also make getting a mortgage feel more complicated — particularly if you only have one year of trading history. Many self-employed people assume they must wait two or three years before applying for a mortgage. While this is common lender practice, it is not always the only route.

Getting a self-employed mortgage with 1 year of accounts can be challenging, but in some circumstances it may be possible. Lender choice is usually more limited, criteria are often stricter, and preparation is essential. This guide explains how lenders typically assess self-employed applicants with one year of accounts, what documents are commonly required, and what factors can influence acceptance.

This article provides general information only and does not offer regulated mortgage advice.

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What Counts as Self-Employed for Mortgage Purposes?

For mortgage applications, you are usually classed as self-employed if you:

• Are a sole trader
• Are a partner in a partnership
• Are a company director with 20–25% or more shareholding (criteria varies by lender)

Even if you pay yourself a salary through a limited company, lenders often still treat you as self-employed.

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Why Do Most Lenders Ask for Two Years of Accounts?

Most mortgage lenders request at least two years of accounts to assess income consistency and sustainability. This helps them understand:

• Whether income is stable or growing
• How the business performs over time
• Whether income fluctuations are seasonal or ongoing

With only one year of accounts, lenders have less evidence, which increases perceived risk.

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Is It Possible to Get a Mortgage with Just 1 Year of Accounts?

In general terms, it may be possible to get a mortgage with one year of self-employed accounts, but options are usually restricted.

Some lenders may consider applications where:

• The business is newly established but profitable
• Income is strong and sustainable
• There is a relevant employment background before self-employment
• A larger deposit is available

Each lender applies its own criteria, and acceptance is never guaranteed.

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Types of Lenders That May Consider 1 Year Accounts

Specialist Mortgage Lenders

Specialist lenders are more likely to consider applications with one year of accounts. They often use manual underwriting and assess the wider picture rather than relying solely on automated income models.

Some Building Societies

Certain building societies may consider one year of accounts in specific circumstances, particularly where the applicant has a strong professional background or consistent prior earnings.

Mainstream high-street lenders typically require at least two years.

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How Income Is Assessed with One Year of Accounts

Income assessment depends on your business structure.

Sole Traders and Partnerships

Lenders usually assess:

• Net profit shown on the most recent tax year
• SA302 tax calculation and tax year overview

With one year available, lenders may use that figure alone, often applying caution.

Limited Company Directors

Lenders may assess income using:

• Salary plus dividends, or
• Share of net profit

Policies vary widely, and some lenders restrict options when only one year of trading is available.

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The Importance of Your Previous Employment

Lenders often look at what you were doing before becoming self-employed.

They may consider:

• Whether your self-employed role is in the same industry
• Whether income levels are similar or improving
• Length of experience in the profession

A strong, relevant employment background can help support an application with limited trading history.

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Deposit Expectations

Deposit size is particularly important when applying with one year of accounts.

While deposit requirements vary, lenders may expect:

• Larger deposits than standard self-employed mortgages
• Often 15%–25% or more, depending on circumstances

A larger deposit reduces lender risk and may improve access to specialist options.

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Credit History Considerations

Credit history is assessed in the same way as for employed applicants.

Lenders typically review:

• Missed or late payments
• Defaults or CCJs
• Overall credit conduct
• Recent financial behaviour

Clean and well-managed credit can help offset the risk of limited trading history.

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Bank Statements and Business Conduct

Bank statements are closely reviewed in self-employed applications.

Lenders may look for:

• Regular business income
• Clear separation of personal and business finances
• Consistent drawings or salary
• Controlled spending and limited overdraft reliance

Clear, organised statements can support confidence in the business’s stability.

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Affordability Assessments

Affordability checks still apply in full.

Lenders assess:

• Declared income
• Household expenditure
• Existing credit commitments
• Dependants and living costs
• Stress testing against higher interest rates

Lower assessed income due to one year of accounts can reduce borrowing capacity.

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Property Type and Mortgage Purpose

Lenders may also consider:

• Whether the property is standard construction
• Purchase vs remortgage
• Residential vs buy-to-let

Standard residential purchases are usually more straightforward than complex property types when accounts history is limited.

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Common Challenges with 1 Year Accounts

Applicants often face:

• Fewer lender options
• Lower maximum borrowing
• Higher interest rates
• More detailed underwriting

Understanding these challenges helps manage expectations.

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Common Misconceptions

“One Year of Accounts Means Automatic Decline”

This is not always true, but options are more limited.

“High Turnover Is All That Matters”

Lenders usually focus on net profit, not turnover.

“A Big Deposit Guarantees Approval”

Deposit size helps, but income sustainability and affordability remain key.

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Preparing Before You Apply

Self-employed applicants with one year of accounts often prepare by:

• Ensuring accounts are finalised and accurate
• Working with a qualified accountant
• Saving a larger deposit
• Keeping personal and business finances organised
• Reviewing credit reports carefully

Preparation can help reduce delays and uncertainty.

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When Waiting May Be Beneficial

Some people choose to delay applying until they have two years of accounts.

Waiting can:

• Increase lender choice
• Improve borrowing potential
• Reduce interest rates

Whether waiting is appropriate depends on individual circumstances and priorities.

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Summary

Getting a self-employed mortgage with 1 year of accounts is more challenging than with a longer trading history, but it may be possible in certain situations. Lenders focus on income sustainability, previous experience, deposit size, affordability, and overall financial conduct.

Understanding how lenders assess limited accounts and preparing carefully can help self-employed applicants approach the mortgage process with realistic expectations.

This article provides general information only. For personalised guidance, regulated mortgage advice is required.