Self Employed Mortgages

3 August 2021 by Terry Hudson

mortgage application loan agreement and house key P5ATR99

SELF-EMPLOYED HIGH STREET LENDERS tend not to offer mortgages to the self-employed, contractors and freelancers without considerable paperwork and delay, so finding the right mortgage lender for your circumstances can be daunting. There are around 4.8 million self-employed people in the UK, many of whom mistakenly think their irregular income or lack of three years’ worth of accounts means they automatically don’t meet the requirements for a mortgage.

But this is not the case. If you’ve been put off from applying, it might be time to reconsider.


Self-employed buyers (including sole traders, contractors, partners and directors of limited companies) have access to the same range of mortgages that any other buyer has. If your finances are in good order and you can prove you have a regular income, self-employment is unlikely to cause your application to be rejected. You’ll simply need to provide different documentation, and perhaps more evidence of your income, than a buyer who’s in regular employment.


Mortgage providers will ask you for evidence of your income for the last two to three years, as they would ask any other applicant. How you do this depends on how you are currently self-employed.

Sole traders (self-employed individuals) will be assessed based on their income tax self-assessments.

Partners (people who are in business with others) will be assessed based on their share of the profits of the business.

Directors (people who have formed limited companies) will be assessed based on their salary and dividends paid out by the company.


You’ll need to supply the same documentation as anyone else as part of your application (e.g. proof of identity and address), as well as some additional documents. Exactly what you’ll need to supply depends on your mortgage provider and your self-employment status, but you might be asked for any of the following:

SA302 forms: these are provided by HM Revenue & Customs and show your earnings in previous years based on your income tax self-assessment.

Payslips and P60s: if you pay yourself a salary through your limited company, or are employed through an umbrella company, you’ll be asked for these as evidence.

Limited company accounts: directors will usually be asked to show their limited company accounts for the last two years.

Contracts: you might be asked to show documents proving your ongoing working relationship with clients and the agreed rates of pay.

Bank statements: if you have a separate business bank account, be prepared to show historic statements for this,

About Terry Hudson

Development LendingOffers more than 31 years’ experience in a client-facing role in the commercial funding sector specialising in multiple-unit residential development