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Yes, it is entirely possible to get a mortgage if you are self-employed in the UK. However, the process may be slightly different compared to those who are employed by a company. Lenders have specific requirements for self-employed individuals to ensure their financial stability and ability to repay the loan.

More than a third (37 per cent) of self-employed UK renters believe they will never be able to purchase a home according to the Financial Times. However, this belief might not reflect reality. It is very possible for self-employed people to get employed for a mortgage. This article aims to explain how this works.


What Documents Will I Need To Provide As A Self-Employed Individual?


When applying for a mortgage as a self-employed person, you will typically need to provide the following documents:

  • SA302 forms or self-assessment tax returns for the past two to three years
  • Company accounts (if you are a director of a limited company)
  • Bank statements for personal and business accounts
  • Proof of identity (e.g. passport or driving licence)
  • Proof of address (e.g. utility bills or bank statements)
  • Details of any other sources of income or financial commitments


How Do Lenders Assess My Income As A Self-Employed Borrower?


Lenders typically assess your income by looking at your self-assessment tax returns or SA302 forms for the past two to three years. They will calculate an average of your annual income during that period to determine your affordability for a mortgage. 

If your income has been increasing or decreasing significantly over the years, lenders may take that into account when assessing your application.


Can I Use My Self-Employed Income If I Have Only Been Trading For A Short While?


Yes, but if you have been self-employed for a relatively short period such as less than two years, it may be more challenging to secure a mortgage. Many lenders prefer to see a track record of stable income, typically for at least two years. 

However, some lenders offer specialised products for those with shorter trading histories, and they may consider your application based on your individual circumstances. Deedle can help you find lenders like this, matching you with the best lenders to suit your unique needs. Fill in our quick form for more information.


How much deposit will I need as a self-employed borrower?


How Much Deposit Will I Need As A Self-Employed Borrower?


The deposit required for a self-employed borrower is generally the same as for employed individuals, which is a minimum of around 5% of the property’s purchase price. Providing a larger deposit can give you access to better mortgage rates. 


Will Being Self-Employed Affect The Mortgage Interest Rates I Can Get?


No, being self-employed may not directly affect the mortgage interest rates you can obtain. Lenders primarily consider factors such as your credit history, loan-to-value ratio, and affordability when determining the interest rate. 

However, if you have a complex income structure or limited trading history, it may limit the number of lenders willing to offer you competitive rates.


Can I Get A Self-Employed Mortgage If I Have Bad Credit?


Yes, but having bad credit can make it more challenging to secure a mortgage, whether you are self-employed or employed. Some specialist lenders may consider self-employed individuals with bad credit, but usually lenders will not offer you the most competitive rates in these cases.


Can I Include My Spouse’s Income In The Mortgage Application If They Are Employed?


Yes, you can typically include your spouse’s income in the mortgage application, even if they are employed and you are self-employed. Lenders often consider the combined income of both applicants to determine affordability. Including your spouse’s income can increase your chances of qualifying for a higher mortgage amount.


Are there any special mortgage options for self-employed borrowers?


Are There Any Special Mortgage Options For Self-Employed Borrowers?


Yes, some lenders offer specialised self-employed mortgages that take into account the unique circumstances of self-employment. These mortgages may have different criteria, such as requiring a smaller deposit or accepting a shorter trading history. 


How Can I Improve My Chances Of Getting A Mortgage As A Self-Employed Individual?


To improve your chances of getting a mortgage as a self-employed individual, you should…

  • Maintain accurate and up-to-date business and personal accounts, or work with an accountant
  • Keep your credit score high by paying bills on time and managing your debts responsibly
  • Save for a larger deposit, as a higher deposit can increase your chances of approval and access better rates
  • Consider consulting a mortgage broker who can help you navigate the process and find suitable lenders, such as Deedle


Can I Get A Mortgage If I’m Self-Employed With A Bad Credit Score?


Yes. It may be more challenging to secure a mortgage if you’re self-employed with a bad credit score, but it is not impossible. Your credit score is one of many things that mortgage lenders consider when calculating your likelihood to be approved.

However, keep in mind that getting a mortgage with poor credit, whether self-employed or not, means you probably will not get the most competitive rates unless you save up for a very big deposit.


Can I Get A Mortgage If I Have Recently Started My Self-Employed Business?


Yes, but getting a mortgage when you have recently started your self-employed business can be more challenging compared to those with a longer track record. Lenders typically prefer to see a history of stable income. 

Lenders will want to see that your business has the potential for success in the future, to ensure you can make your mortgage payments. Writing up a business plan can help with this.

If you have prior experience in the field in which your business operates, make sure you mention it to lenders. Showing your qualifications and industry knowledge can boost a lender’s confidence in your ability to generate income through your business.


Concluding Thoughts


Getting a mortgage when you are self-employed can be a bit more challenging than for traditional employees, but it is by no means impossible. Saving up for a big deposit, maintaining a high credit score, and keeping diligent records can help boost your chances.

Consulting with a mortgage professional can give you valuable guidance tailored to your specific situation and introduce you to exclusive deals. To get a fast, free quote, chat with one of our mortgage brokers today.