Self-employed mortgages. We know which lenders get it right

It's a standard mortgage for someone whose income comes from self-employment. The product itself is the same, the difference is how lenders calculate whether you can afford it. Self-employed applicants need different documentation and are assessed using different income calculations than employed borrowers.

It depends on how you're set up. Sole traders are assessed on net profit from SA302 forms, usually averaged over two to three years. Company directors are typically assessed on salary plus dividends. Contractors can often be assessed on annualised day rates, which is usually a much higher figure than salary or dividends alone.

Most lenders ask for two to three years, but some specialist lenders will consider one year of accounts, particularly for contractors with an active contract, or applicants who have previously worked in the same field as an employee. We'll tell you honestly what's available with your current trading history.

Not necessarily. With a decent deposit and clean credit, the rates available to self-employed borrowers are broadly comparable to those for employed borrowers. The issue is usually income being underassessed by the wrong lender, which pushes borrowers into a higher LTV bracket and a higher rate. The right lender, chosen correctly, avoids that.

Yes. Specialist lenders can assess your income based on your annualised day rate rather than what you've drawn as salary or dividends. This often produces a significantly better affordability result. We know which lenders use this approach.

This is one of the harder situations, but it doesn't necessarily rule out a mortgage. Some lenders will use the most recent year's figure if it shows a recovery or stabilisation. Others may average the last two years. We'll look at your specific income pattern and tell you which lenders will view it most favourably.

Yes. Lenders who understand limited company structures will assess your salary and dividends combined. Some will also factor in retained profit within the company. Getting this assessed properly, rather than having only your salary counted, can make a substantial difference to your borrowing capacity.

Your options are more limited with less than one year of trading history, but they're not zero. If you've moved from employment into the same sector, some lenders will consider a combination of your previous employed income and your current self-employed earnings. We'll tell you exactly where you stand.

Yes. The process is the same as a purchase, your new lender will assess your income using recent accounts and SA302s. If your income has grown since your original application, a remortgage can give you access to a better rate or the ability to release equity.

For sole traders: SA302 forms and tax year overviews (last 2 to 3 years) plus 3 to 6 months of bank statements. For company directors: company accounts, SA302 forms, dividend vouchers, and bank statements. For contractors: current contract, bank statements, and potentially recent invoices. We'll confirm exactly what you need at your free consultation.