Mortgages for the Self-Employed
Self-employed mortgages are designed for individuals who run their own business or work independently. This broad category includes Sole Traders, Partnerships, Limited Company Directors, and many types of Contractors. While the application process can be more detailed, having the right specialist guidance ensures that your full income—including dividends and retained profits—is accurately represented to the right lenders.
Expert Mortgage Solutions for the Self-Employed
Securing the best mortgage as a self-employed professional requires the expertise of a Specialist Whole-of-Market Broker. If your financial situation is complex, we ensure your income is presented accurately to the right lenders.
Many Limited Company Directors and Sole Traders are unaware that, depending on their industry, they can often be assessed similarly to contractors or fixed-term employees. Our specialists analyze your accounts to identify lenders who will maximize your borrowing capacity based on your unique business structure.
When Does a Lender Classify You as Self-Employed?
In the mortgage industry, you are typically classified as self-employed if you own more than a 25% share in a business. However, every lender has different thresholds—some may classify you as such with a smaller share, while others require more.
While obtaining a mortgage as a self-employed applicant can be more complex, it is far from impossible. Some lenders are significantly more “self-employed friendly” than others. Even if you don’t meet the criteria of one bank, our access to the entire UK market means we can find alternative lenders who understand your business model and offer the affordability you need.
Challenges for Self-Employed Applicants
Many self-employed individuals struggle to get a mortgage when going direct to high-street banks. At Reliance Mortgage, our specialist advisors help you navigate common hurdles such as:
Short Trading History: Having less than 2 years of accounts.
Fluctuating Income: Lenders averaging the last 3 years or using the latest (lower) figures.
Declining Profits: A recent dip in net profit or a one-off loss.
Tax Efficiency: Applicants who keep their declared income low for tax purposes.
If any of these apply to you, don’t worry—there are specialist lenders who understand these scenarios, and we can help you find them.
What Evidence Will You Need?
To assess your affordability, most lenders typically require 2 years of trading history and the following documents:
HMRC SA302 / Tax Calculations: Usually for the last 1 to 3 years.
Tax Year Overviews: Corresponding to your tax calculations.
Bank Statements: Showing both business and personal income/outgoings.
Limited Company Accounts: Full sets of accounts (if applicable).
Accountant’s Certificate: Occasionally, a professional projection or reference may be requested.
Calculating Your Borrowing Power
How much you can borrow depends on how a lender assesses your income. Different lenders use different methods:
Net Profit: Your business earnings after expenses but before tax.
Salary & Dividends: The actual drawings you take from your Limited Company.
Salary & Retained Profit: Your salary plus the profit left within the company (ideal for Directors).
Contractor Day Rates: If you are paid a day rate, we use a specific formula:
(Day Rate × 5 Days) × 46 Weeks = Your Annual Assessable Income.
Once your income is determined, you can typically borrow between 4.5 to 5.5 times that amount, depending on the lender’s criteria.
Expert Whole-of-Market Mortgage Brokers
Get in touch for a free, no-obligation consultation with one of our expert whole-of-market mortgage brokers. Simply select your specific requirements from the drop-down menu so we can match you with the perfect specialist advisor for your needs. One of our advisors will be in touch within one working day—though, in most cases, you can expect a response much sooner.
