A mortgage for self-employed workers is a home loan specifically designed for individuals who work for themselves and who generate income through their own business or freelance work.
It takes into account the unique financial circumstances of self-employed individuals. It is often used by:
Lenders usually assess your income based on the average of your earnings over the past two to three years.
They may also consider other factors, such as:
Each lender will have their own unique set of criteria, however.
Type of Mortgage |
Description |
Fixed Rate Mortgage |
With a fixed rate mortgage, the interest rate remains unchanged for a predetermined period, typically 2 to 10 years, regardless of the base rate.
|
Tracker Mortgage |
A tracker mortgage is tied to the Bank of England’s base rate or another specified interest rate.
|
Remortgage |
A remortgage involves switching your existing mortgage to a new lender or renegotiating the terms with your current lender.
|
Offset Mortgage |
An offset mortgage allows you to link your savings or current account to your mortgage.
|
Buy-to-Let Mortgage |
Buy-to-Let Mortgages allow you to get a mortgage on a house you want to rent out.
|
At Deedle, we understand the challenges that come with purchasing a property, especially when you are self-employed. That’s why we provide unlimited support to guide you through the process. Our dedicated mortgage advisors will assist you every step of the way, handling paperwork, communicating with lenders, and ensuring a seamless experience.
Regardless of your credit history, self-employment status, or retirement age, our team of experts is here to help you find the perfect mortgage. With our extensive industry knowledge, we search through thousands of mortgage deals to find the one that precisely suits your circumstances and preferences. Start your journey with Deedle today.
The cost of a self-employed mortgage can vary depending on several factors, including the lender, interest rate, loan amount, deposit amount, and term of the mortgage.
However, as a representative example, we can imagine a property worth £250,000. If you had a 20% deposit (£50,000) then the loan amount would be £200,000 before interest. Imagining a 6% interest rate (which is common in most banks as of July 2023) and a 25 year term, you would pay £1,279.27 per month.
Some lenders may require a minimum trading history of one to two years, whereas others may consider applicants with as little as six months of self-employment. It entirely depends.
It is even possible to get approved for a self-employed mortgage if you have recently started your business. However, lenders typically prefer self-employed applicants with a longer trading history to assess their income stability.
Working with a mortgage broker can help you find lenders who are more open to borrowers with a shorter trading history. Apply for free with Deedle and we can match you with a lender and provide you with a fast quote.
Yes, although it may be a little bit more challenging. Changing your business structure, such as going from being a sole trader to a limited company, may affect your ability to get a self-employed mortgage.
Lenders typically prefer applicants with a consistent trading history in the current business structure. This is to show lenders that you are a reliable person to lend to, and that you will be able to meet your monthly repayments.
However, some lenders may consider your previous business history and take into account the reasons for the change. This is especially true if your business has seen a recent amount of rapid growth.
Yes! If you have a second job, whether self-employed or employed, lenders may consider the income from both sources when assessing your mortgage application.
The lender will need to ensure that your income is stable, consistent, and meets their affordability criteria. Documentation and proof of income from both jobs will definitely be required.
In fact, having multiple sources of income can even help your application. It means you are a more reliable borrower, as you have more money coming in and therefore more ability to pay off a big loan such as a mortgage.
Not specifically, no. The government offers various schemes and initiatives to support homeownership, but they are not specifically tailored for self-employed individuals.
People who are employed traditionally or self-employed can all benefit from:
Yes but having variable income can make it more challenging to qualify for a mortgage.
Some lenders specialise in catering to self-employed individuals with irregular income streams. They may consider factors such as your average income over a longer period, savings, and the stability of your business.
Yes! While having bad credit can make it more difficult to secure a mortgage, it is not impossible for self-employed individuals.
Specialist lenders exist who cater to individuals with adverse credit histories. Deedle does not discriminate, so we can match you with a lender no matter what your credit history may be.
The deposit requirements for a self-employed mortgage are generally the same as for regular mortgages. It depends on the loan-to-value of your mortgage and the overall cost of your property. This can be:
Yes, self-employed individuals can remortgage their homes. When remortgaging, you typically just go through the same application process as when applying for a new mortgage.
