Since the Great Resignation, freelancing and small businesses have grown across the UK. More people than ever now rely on self-employment, but does that stop you getting a mortgage?
The good news is that self-employed mortgages exist, but you’ll need to provide more proof of income and stability than an employee.
Let’s break down exactly what lenders look for and how you can improve your chances.
What is a self-employed mortgage?
There isn’t a separate mortgage product for the self-employed. You apply for the same products as everyone else.
What’s different is how your income is assessed.
Since self-certification mortgages were banned in 2014, you’ll need to provide solid evidence of earnings, usually for at least two years.
Who counts as self-employed?
Lenders group applicants into three main categories:
- Sole traders / partnerships – your net profit is used as income.
- Limited company directors – income is usually your salary plus dividends, though some lenders will also consider retained profits.
- Contractors / freelancers – lenders may average your last 12–24 months’ contracts or treat you like a PAYE employee if you have long-term agreements.
How much history do you need?
- Most lenders want two full years of accounts or SA302 tax returns plus HMRC tax year overviews.
- Some specialist lenders may accept just one year of accounts, particularly if you’re in a professional role or have guaranteed contracts.
- If you’re newly self-employed, your options are limited until you have a track record, although a large deposit and strong credit history can help.
What documents will you need?
Expect to provide:
- Proof of ID and address (passport, driving licence, utility bills)
- 2–3 years of SA302s and tax year overviews (downloadable from HMRC)
- Certified accounts prepared by a qualified accountant
- Business and personal bank statements (last 3–6 months)
- Proof of deposit (savings statements, gift letters, or sale proceeds)
See my guide to checking your credit report to make sure your file is clean before applying.
Employed vs. Self-employed mortgage applications
| Factor | Employed applicants | Self-employed applicants |
|---|---|---|
| Proof of income | 3–6 months’ payslips, P60 | 2–3 years’ SA302s and tax year overviews, certified accounts, business bank statements |
| Income assessment | Gross annual salary (fixed) | Sole traders: net profit; Company directors: salary + dividends (sometimes retained profits); Contractors: contract income averaged/annualised |
| Deposit requirements | 5% minimum (some lenders prefer 10%) | 5% under Mortgage Guarantee Scheme, but many lenders prefer 10–15% (lower risk with higher deposit) |
| Trading history needed | Not applicable | Typically 2 years, though some lenders accept 1 year with strong evidence |
| Borrowing multiples | Usually 4–4.5× salary | 4–4.5× averaged self-employed income (can be higher for professionals) |
| Interest rates | Standard market rates if creditworthy | Usually standard rates if income stable; higher rates possible if limited history or specialist lender used |
| Other requirements | Standard credit checks, proof of ID and address | Same as employed, plus evidence of ongoing contracts/future income if newly self-employed |
Key takeaways
- The products are the same. What differs is how income is assessed.
- Self-employed applicants need more documentation to prove income stability.
- A larger deposit (10–15%) can smooth the process and reduce lender risk.
- Specialist lenders may be more flexible but sometimes charge higher rates.
How do lenders assess affordability?
The affordability test is the same for everyone. Can you comfortably afford repayments?
For the self-employed, lenders calculate this using:
- Sole traders: Average net profit from tax returns.
- Limited company directors: Salary + dividends (sometimes retained profits too).
- Contractors: Average contract income, often annualised based on day rate × working days.
They’ll also look at:
- Monthly outgoings (debts, childcare, living costs)
- Your credit score
- Deposit size and Loan-to-Value (LTV) ratio
Most lenders will offer 4–4.5× annual income, though professionals with stable contracts may access higher multiples.
Do self-employed people pay higher interest?
Not automatically. If your accounts are in order and you can prove stable income, you’ll usually qualify for the same rates as employed applicants.
Higher rates typically apply only when:
- You can’t provide the standard documents
- You’re applying with very limited trading history
How to improve your chances in 2025
- Improve your credit score: Pay all bills on time and reduce outstanding debts.
- Save for a bigger deposit: A 15–20% deposit reassures lenders and gives you access to better rates.
- Hire an accountant: Certified accounts carry more weight than DIY tax returns.
- Keep tax up to date: Download SA302s and overviews from HMRC.
- Get a mortgage in principle: Test your eligibility without affecting your credit file.
- Use a broker: Mortgage brokers specialising in self-employed clients can access deals you won’t find directly.
Market changes in 2025
- The Mortgage Guarantee Scheme continues helping buyers with just a 5% deposit access mainstream mortgages. Self-employed applicants are eligible if they meet affordability tests.
- The FCA is reviewing mortgage rules to make lending criteria fairer for freelancers and contractors, which could widen options in future.
- Lenders are increasingly open to one year of accounts, especially for professionals in stable industries.
Final thoughts
So, can you get a mortgage if you’re self-employed in 2025? Absolutely, but preparation is everything.
With clean accounts, a decent deposit, and the right broker, you should have access to the same mortgage products as anyone else.
The key is to plan ahead. Keep your finances transparent, build up your credit score, and gather all the documents lenders will expect.
That way, when you’re ready to buy, your self-employed status won’t hold you back.
Self-employed mortgage FAQs
How many years of accounts do I need for a mortgage if I’m self-employed?
Most lenders want two years of accounts or SA302s. Some may accept just one year if you’re in a strong financial position, but choice will be limited and rates may be higher.
What’s the minimum deposit for a self-employed mortgage?
In theory, 5% under the Mortgage Guarantee Scheme. In practice, many lenders ask for 10–15%, especially if you only have one year of accounts. The bigger the deposit, the better your rates.
Can retained profits in my company be used for affordability?
Some lenders will consider retained profits for limited company directors, but many stick to salary + dividends. A broker can direct you to lenders who take a more flexible view.
Is it harder to get a mortgage if I’ve recently gone self-employed?
Yes. With less than a year’s trading history, options are extremely limited. Lenders want proof your income is sustainable. A large deposit and excellent credit may help, but most applicants will need to wait until they have at least one year of filed accounts.
Do self-employed applicants need a higher credit score than employed ones?
Not officially, but in practice, lenders scrutinise self-employed applications more closely. A strong credit score makes approval far easier. If your score is weak, work on improving it before applying.
