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Self-employed mortgages

Find a self-employed mortgage

Our broker partner Mojo can help you find a mortgage if you're self-employed

We've partnered with Mojo Mortgages to help you compare self-employed mortgages with an expert

  • Advisers who can look at mortgage rates from across the market

  • Get an expert-recommended deal

  • They can help you apply when you're ready

What is a self-employed mortgage?

There aren't specific mortgages if you're self-employed –you apply for the same deals as everyone else. Whether that's a fixed-rate or variable-rate deal. Although there may be less lenders willing to consider self-employed applicants.

But you normally need to do a bit more to prove your income. This is because the lender wants to make sure you can afford the mortgage repayments. And they can't rely on payslips from your employer to tell them this.

Before 2014, self-employed people could apply for 'self-certification mortgages'. This meant they could declare their own income, without providing evidence, and their borrowing amount was based on that.

But following the Mortgage Market Review (MMR), lenders have become stricter and these no longer exist.

Even though you can apply for the same deals as everyone else, there may be less options available to you if you're self-employed and the application process might be trickier. So you might want to use a mortgage broker.

They can help you supply the correct documents and compare mortgages to suggest suitable deals. This reduces the risk of you being rejected.

What is classed as self employed?

Lenders typically consider you self-employed if you earn most of your income from a business where you own at least 20-25%.

If you're self employed you're normally classed as one of the following:

  • Sole trader
  • Contractor
  • Limited company director
  • Business partner in a partnership

Depending on which category you fall into, lenders might have different requirements when you apply for a mortgage.

What documents do I need when applying for a self-employed mortgage?

As with anyone applying for a mortgage, you need proof of ID and address, along with bank statements and evidence of how you funded your deposit.

But if you're self-employed you also require the following documents:

  • SA302 forms or a tax overview from the HMRC for the past couple of years
  • 2+ years of certified accounts

If you're a contractor, you might also need to show evidence of upcoming contracts.

Company directors may be required to provide proof of dividend payments or retained profits.

Business partners might need to evidence their share of profits.

Make sure to check what documents are required with your broker or in the lender's terms and conditions.

Is it harder to get a mortgage if you're self employed?

It can be, because you need to evidence a steady income to a mortgage provider.

But as long as you get your documents and finances in order, and can prove your income to a lender, you shouldn't have too many issues.

This is where a mortgage broker can help. They can look at your financial circumstances and help you apply for suitable deals. They can also explain exactly what documents are required as part of your application.

How to prepare for a self employed mortgage application

While applying for a mortgage as a self-employed person shouldn't necessarily be more difficult, you should still prepare appropriately to take the hassle out of the process.

  • Build up a deposit
  • Sort out your finances
  • Get a mortgage in principle
  • Find a property
  • Gather your documents
  • Apply for a mortgage

Build up a deposit depending on your rough property budget. You normally need at least a 5% deposit, but the larger it is, the better mortgage deals you can access.

Sort out your finances so that you can evidence your income appropriately to lenders. You might want to hire an accountant. Lenders sometimes prefer accounts provided by a certified accountant as they're more reliable.

Get a mortgage in principle which is a document that outlines how much a bank or building society is willing to lend you. Also known as an agreement or decision in principle, it isn't a guarantee they'll accept your application. But it helps with budgeting, and estate agents may ask to see it.

Find a property that you want to buy. Based on your deposit and mortgage in principle, find homes within your budget. Once you've had an offer accepted, you can apply for a mortgage.

Get your documents together so that they're ready to send when you apply for your mortgage. Deals change quickly so it's best to get these to your broker as soon as you can.

Apply for a mortgage – if you're using a broker, they normally take care of this part for you.

What our expert says

If you're self-employed, you normally need to do more to evidence your income. Ideally, you must demonstrate a steady income over the past 2 or 3 years. Many lenders now accept an HMRC SA302 form as verification of income. Our Mojo experts can help you navigate the process of applying for a mortgage when you're self-employed.

Need more help?

How much can you borrow if you're self-employed?

Lenders usually cap your borrowing amount around 4.5 times your annual income.

If you're a sole trader, they may take an average of your net profit over a period of time in order to work out this amount.

They normally look at your share of net profit or salary and dividends if you're a company director.

For contractors, they may take an average of your income over the past few years. But if your earnings have changed significantly in that time, they might look at your lowest earning year.

Can I get a joint mortgage with a self-employed worker?

Yes, you can get a joint mortgage with someone who's self employed.

But they need to evidence their income properly. The lender needs to be satisfied you can make the payments.

If they don't do this, it increases the risk of you both being rejected which can impact both your credit scores.

To limit this risk, it might be worth speaking to a broker who can advise you both on what documents you need to provide.

What if I’ve only been self employed for a short time?

Many lenders require at least 2 years of certified accounts when you apply for a mortgage as a self employed person.

But there are some providers that may be able to consider you even if you've only been employed a short amount of time. Bear in mind that you'll have access to a smaller range of deals though.

A broker can help advise you on which lenders may be more likely to consider you.

Do self employed people pay higher mortgage rates?

No, self employed people don't generally pay higher mortgage rates than others.

But if there are any complications with your application, you may find that the only deals available to you have higher rates.

This could be the case if you've only been self employed for a short amount of time or you have poor credit.

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Page last reviewed: 14 September 2023

Reviewed by: Claire Flynn


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