Self-employed mortgage

Compare mortgage rates for self-employed people with Mojo Mortgages[1]

Can self-employed people get a mortgage?

If you're self-employed or own a small business, getting on the property ladder and finding the right mortgage can prove challenging.

Before lenders consider offering anyone a mortgage, they need proof that payments are affordable - and not just affordable now, but in the future, too.

Self-employed people tend to have fluctuating incomes, so lenders often regard them as complicated and more of a risk.

That’s why the chances of getting accepted for a mortgage are generally lower for the self-employed than for people in PAYE employment.

But there are plenty of mortgage providers - even high street banks - that will consider applications from the self-employed. So don’t be put off.

You’ll just need to go to a few extra lengths to provide evidence to your mortgage lender that you can keep up monthly repayments.

For example, people in employment are usually only asked for their most recent one to three payslips as proof of income.

But if you’re self-employed you’re required to provide evidence of at least two years of self-employed income accounts. In some cases, lenders may ask for three years.

If you have this proof, a good credit rating, and your finances are well-organised and healthy, then you're likely to have access to exactly the same selection of mortgages as anyone else.

However, if you don't have the necessary evidence, you may find your mortgage options are more limited.

What do lenders class as self employed?

Lenders consider you to be self employed if you have more than a 20% share of the business that is your main source of income.

You may be a sole trader, in a partnership or a director in a limited company.

Freelancers hired to work for different companies and independent contractors are also classed as self-employed.

self-employed mortgage

How much can I borrow?

Your mortgage lender will consider your income, your regular financial outgoings, your credit history plus the size of your deposit to come up with a figure on how much you can borrow.

To get an estimate of how much you may be able to borrow and your repayments, try our mortgage calculator.

Self-employed mortgage requirements

To be considered for a mortgage, you’ll need to have been trading for three years and able to show proof of your income for the past two complete tax years. Some lenders will ask to see three years of accounts.

There are some specialist lenders who take on applicants who cannot provide this evidence and have been self-employed for only a short time.

If that's the case for you, you'll probably be asked to show evidence of future contracts and commissions to convince your lender you’ll be able to afford repayments. But your choice of mortgages may be limited.

How to apply for a self-employed mortgage

You’ll need to provide a few documents to your lender to prove you can manage repayments. These can include:

Proof of your identity

  • Passport and/or driving licence
  • Council tax bill and/or recent utility bills

Proof of your income

  • An SA302 form from HMRC for the past two or three trading years to show your tax calculation. You can access the forms by logging on to your HMRC online self-assessment account or you can call HMRC. But it can take up to two weeks to receive copies by post
  • A set of accounts certified by your accountant if you have one
  • Proof of future contracts, commissions and projects
  • Evidence of upcoming dividend payments if you are a company director

Proof of your expenditure

  • Bank statements from the last three months

Providing all the necessary paperwork can be complicated. This is where enlisting the help of a specialist broker like Mojo Mortgages[1] can be useful.

How to improve your chances of being accepted for a mortgage

As a self-employed borrower, the buck stops with you to prove you can afford the monthly mortgage repayments.

There are a few things you can do before applying to give yourself the best chance:

1. Watch your spending

Lenders can ask to see bank statements and will ask you about your spending habits.

This doesn't mean you'll be judged harshly for eating out or having a gym membership. But a lender needs to be confident you can afford to repay the mortgage every month with enough disposable income left over to pay other outgoings.

If you already pay rent or a mortgage, this goes some way to proving to your lender that you can afford a mortgage, but being self-employed means your income could be considered riskier.

2. Improve your credit rating

Pay off any credit cards and phone bills as soon as they're due to avoid getting a late payment recorded on your credit history.

Get on the electoral register and make sure all your finances are registered to one address, and read our other tips on how to improve a credit score.

3. Save for a larger deposit

It may seem unfair, but you may need to save a larger deposit if you're self-employed – ideally 20% or even more. This will help give you access to a wider range of deals.

The fact that the larger a deposit you have the more likely you are to be approved applies to everyone, but especially to the self-employed.

4. Keep records

As mentioned, you'll probably need at least two years' worth of accounts before you apply – so make sure you get your book-keeping in order if you're planning a mortgage application.

5. Speak to an adviser

Documents required for a self-employed mortgage are a bit more complicated, so you might find it helpful to use a mortgage adviser. They'll give you more information about your mortgage options, and can help you with your application.[1]

Mortgage calculators

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[1]For online mortgage comparison and advice introduces customers to Mojo Mortgages which is authorised and regulated by the Financial Conduct Authority. Mojo Mortgages is a trading name of Life’s Great Limited.’s relationship with Life’s Great Limited is limited to that of a business partnership, no common ownership or control exists between us. Please note, we cannot be held responsible for the content of external websites and by using the links stated to access these separate websites you will be subject to the terms of use applying to those sites.