Sole trader, company director, contractor or freelancer, being self-employed does not automatically rule you out. Lenders just assess your income differently.
Different income structures are assessed differently. Here is what tends to matter for each.
It is a common misconception that self-employed applicants struggle to get a mortgage. In reality, lenders assess self-employed income in different ways depending on how you work, and being self-employed does not automatically mean you will be offered less or refused. It does mean your application may need more supporting documentation than an employed applicant's.
Lenders typically look at your net profit over the last two to three years, usually taken from your tax calculations and tax year overviews from HMRC. A stable or growing income is generally viewed favourably, though a single strong year is sometimes enough with the right lender.
If you own 20% or more of a limited company, most lenders treat you as self-employed. Some look at your salary and dividends, while others will also consider retained profit left in the business, which can make a meaningful difference to how much you can borrow.
Contractors, particularly those paid a day rate, are sometimes assessed differently again. Some lenders will annualise your day rate rather than asking for the full trading history a sole trader or director would need to provide, which can suit contractors with a shorter self-employment history.
If your income varies from month to month or year to year, lenders will usually average it out over a set period rather than relying on your best or most recent month. Being able to explain any dips, for example a quiet year or a change in client base, helps when a lender is assessing your application.
Many self-employed applicants have more than one source of income, for example a main business alongside rental income or a smaller side venture. We look at how each income stream is documented and which lenders are comfortable combining them.
Typically this means tax calculations and tax year overviews or full accounts, business bank statements, an accountant's reference, and your personal bank statements and identification, though exactly what is needed depends on how you are structured and the lender.
We look at how your income is structured, whether as a sole trader, director, contractor or freelancer, and explain which lenders tend to assess applications like yours favourably. We will not imply every application will be accepted; eligibility always depends on your circumstances and individual lender criteria.
The questions we hear most from sole traders, directors, contractors and freelancers.
Speak to an adviserYes, being self-employed does not prevent you from getting a mortgage. Lenders assess your income differently depending on whether you are a sole trader, a company director, a contractor or a freelancer, and what you can show to support your application.
Most lenders ask for two to three years, though some will consider one year of accounts or tax calculations, particularly if your income is stable or growing. Which lenders are open to this depends on your individual circumstances.
In some cases, yes. A small number of lenders will consider one year of accounts or tax calculations, especially where the figures are strong or you have a relevant employment history in the same field. It is not guaranteed and depends on the lender's criteria.
If you own 20% or more of a limited company, you are usually treated as self-employed. Some lenders look at salary and dividends, while others also consider retained profit left in the business, which can affect how much you can borrow.
Yes. Some lenders will annualise a contractor's day rate rather than asking for the same trading history a sole trader would need to show, which can suit contractors who have not been self-employed for as long.
Lenders will usually average your income out over a set period rather than relying on your best year. Being able to explain any dips, such as a quieter year or a change in clients, can help when your application is assessed.
Typically tax calculations and tax year overviews or full accounts, business bank statements, an accountant's reference, and your personal bank statements and identification. Exactly what is needed depends on how you are structured and the lender.
Whether you are buying, moving, remortgaging or you simply want to understand your options, speak to the ICE Mortgages team. No jargon, no pressure, just a straight conversation about what is possible.