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Self-Employed Mortgages

Mortgages for the self-employed

Sole trader, freelancer, CIS contractor, day-rate consultant, if you earn outside a standard payslip, this is the page that should make you feel like a normal mortgage applicant again.

Initial consultations are completely free of charge. There's no obligation to proceed and our broker fee of £495 will only become payable if we proceed to a full application.

Your home may be repossessed if you do not keep up repayments on your mortgage.

In brief
  • Mortgages from 1 year of accounts (sometimes less for contractors)
  • Up to 95% loan-to-value for first-time buyers
  • Multi-year income averaging where it helps you
  • Day-rate × 5 × 46 used for CIS / umbrella contractors
  • Specialist + high-street lenders. No "sub-prime" if not needed.
The detail

How lenders actually assess self-employed income.

There are four common patterns, and matching you to the right one is half the job. The other half is presenting your accounts so the underwriter sees what they need to see.

Sole trader

SA302 line totals, the common route

Lenders generally take 'Total income received' from your last two SA302s and average them. A few will use the latest year only if it is higher and the trend is upward. The number on your SA302 is what counts, not your turnover, not your bank balance.

Ltd Co director

Salary + dividends

The default high-street approach. Whatever you actually paid yourself in salary plus declared dividends, averaged over two years. Easy if you draw the bulk of your profit. Painful if your accountant retains profit in the company for tax efficiency.

Ltd Co director

Salary plus your share of net profit

A smaller group of lenders will look at salary plus your share of the company's retained profit, rather than just what you have drawn. For directors who leave profit in the business, that can change the borrowing figure substantially. Which lenders take that view, and what they each want to see, is the part I handle.

Day-rate contractor

Day rate × 5 × 46 (or × 48)

For CIS, umbrella and limited-company contractors with a current contract, a strong specialist panel will use day rate × 5 × 46, i.e. 46 working weeks a year, as gross annual income. No accounts required. A signed contract and 6–12 months' history is usually enough.

AG
Alan's Tip
Before you move accountants or change how you take money out of your business, ask me. Decisions made for tax in March can quietly cost you a hundred grand of borrowing in October.
Documents

What you will need to send me.

The earlier we get these together, the smoother the application. Clients can usually pull this together in an afternoon.

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Sole trader / freelancer
Last 2 SA302s + tax year overviews · 3 months of business + personal bank statements · ID + proof of address.
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Ltd Co director
Last 2 years of full company accounts · last 2 SA302s · 3 months personal bank statements · accountant's certificate.
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CIS / day-rate contractor
Current signed contract · 6–12 months CIS payslips or invoices · 3 months bank statements · ID.
FAQs

Self-employed mortgage questions, answered.

The questions I get asked five times a week, written out properly so you do not have to call me to ask them.

Often, yes. Some lenders will consider a single year of accounts where the income looks sustainable and the deposit is reasonable. It is a smaller field than with two or three years, but it is far from a dead end, worth a call to see where you stand.
Ready when you are

Tell me what you do for a living. I will tell you what you can borrow.

15 minutes, no paperwork, no commitment. You will leave the call with a real number from a real lender.

Initial consultations are completely free of charge. There's no obligation to proceed and our broker fee of £495 will only become payable if we proceed to a full application.