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Author: Carl Shave-Director
Updated on November 17th, 2023

Self-Employed Mortgages

The Mortgage Centres specialise in helping self-employed mortgage applicants obtain the mortgages they need. We have access to a wide range of lenders, from high street banks to specialist lending companies. Our brokers have a wealth of knowledge of how they all make their assessments of your mortgage application.

Get in touch for a free initial, no-obligation discussion about your mortgage situation.

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What is a Self-Employed mortgage?

The term ‘Self-employed’ covers many kinds of situations, from sole traders to contractors and those in company partnerships.

Different businesses will have different ways of distributing dividends and/or profits, and not everyone easily understands scenarios like retained profits and dividends that we look at when considering your mortgage. Our specialist advisers will ensure all the income from your company is considered.

You may be relieved and surprised to know that there are no such things as specific ‘Self-employed mortgages’.

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Fill out our quick and easy Self-employed calculator below. We only require a few details to see how much you may be able to borrow.


Self-employed mortgage requirements

Lenders generally base their self-employed mortgage criteria on historical earnings, rather than the amount you are currently earning right now. They will typically consider the average of your last two or three years’ income. As shown by your SA302 self-assessment tax calculation documents, or your full verified accounts.

We have found that one size does not fit all in our dealings across the many different modes of self-employment. With some lenders being more willing or able to help than others when considering applications.

There are a variety of circumstances you can be in and still obtain a self-employed mortgage. An example is when only one year’s accounts are available. But other instances when we can be an effective mortgage broker for self-employed applicants are:

  • Calculations based on retained profit.
  • Working with accountant’s certificates.
  • Assessments made using only the latest year’s figures.
  • Understanding umbrella companies and freelancers.
  • Contractors – where no accounts are required.

Getting a mortgage when self-employed

In recent years, mortgage lenders have been obliged to apply more stringent criteria to mortgage underwriting. Most take a more cautious and risk-averse approach when assessing affordability. This process can lead to a lot of frustration if you’re self-employed and applying for a mortgage.

However, there are many specialist mortgage lenders who are willing to lend to self-employed people. These lenders have a deep understanding of the market. Enabling them to offer mortgages to a wide range of people. Even those with complex income structures.

Proof of income for a self-employed mortgage

It’s essential you have proof of income when applying for a self-employed mortgage. When your mortgage application is submitted, the lender will require proof. As it’s one of the key factors in assessing your affordability. Some lenders can even verify income with HMRC instead of asking you directly to supply it.

This move by the lenders towards verifying directly with HMRC is more of a practical move to save them time. And it saves the lender asking you for the information. But unfortunately, it does not mean they are really offering mortgages without proof of income.

Self-certified mortgages

Sadly, self-certification mortgages are no longer available in the UK. They were initially rolled out to make the process smoother for self-employed people with complex incomes. Self-certifying your income for the purposes of an affordability assessment was a big success.

After several years of operation, they discontinued self-cert mortgages. The mortgage regulator saw higher risks of defaults from those with complex incomes.

What is an SA302?

The SA302 form, provided by HMRC, confirms a self-employed mortgage applicant’s income. It details income sources, including self-employment and dividends. Lenders use it to meet FCA affordability rules. You can access up to four years’ SA302s on HMRC’s website when submitting your return online.

You will need to request original SA302s from HMRC if:

  • you do not have access to a printer.
  • you are applying to a lender who will not accept self-printed forms.
  • you submit your tax returns by post.

You can contact the self-assessment helpline on 0300 200 3310, or you can write to them.

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Can I use dividend income to get a mortgage?

If you take a regular salary plus dividends, then lenders will consider the combined amount for their mortgage calculations. However, some lenders don’t work this way, and may look at your business’s net profit instead.

Complications only arise if the combined salary and dividends drawn are greater than your business’s net profit.

The best course of action is to speak to one of our advisors who can make sure your figures are correct.

Getting a mortgage with two year’s accounts

As mentioned, most mortgage lenders are known to request accounts from at least the last three years. Although, you are now able to get an application for a mortgage considered with two years’ accounts.

The average profit is then considered across those years. Mortgage lenders are also likely to be more accommodating if you have a larger deposit or equity value.

Self-employed mortgage lenders

Self-employed mortgages come from regular lenders, but some are more open to self-employed applicants. Lenders have varying criteria, so consult a specialist adviser for tailored advice.

Self-employed mortgage broker

The Mortgage Centres has a huge level of experience in dealing with many niche areas of the mortgage market. We understand the intricacies of our self-employed clients’ lives. We know that every business will have a different trading strategy and take this into account in our assessments.

It’s very important to make a proper assessment of your circumstances. We will present your income and assets in such a way as to be most favourable to a potential mortgage lender.

Self-Employed Mortgage FAQs

  • How much can I borrow for Self-employed mortgages?
  • I've been declined by my bank, can I still get a mortgage?
  • Can I get a mortgage using retained profits?

The amount you can borrow can vary considerably depending on the lender. Each will have their own method of calculating your income. For example, some may simply use the latest year’s tax return as a guide. While others will take an average of the last two or three years’ figures.

Like with a standard mortgage, the larger your deposit and the higher your income the more you can borrow. Try our self-employed mortgage calculator to gain an indication of how much you could borrow.

Being declined by your bank certainly does not mean you cannot get a mortgage somewhere else. After all every lender calculates your credit score differently.

If you’re declined a mortgage for any reason, it’s worth speaking to a specialist mortgage broker.

Using retained profits for a mortgage can be challenging. Mainstream lenders often don’t count them as income. While they consider dividend income alongside salary, profits left in your business are usually excluded.

However, specialist lenders do consider retained profits. Our brokers can provide a detailed assessment of your options.

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