How to Get a Mortgage When You’re Self-Employed
Being your own boss is great - freedom, flexibility, no one telling you what to do. But when it comes to mortgages, being self-employed can feel like stepping into a minefield. Banks like steady paychecks, and your income can look… unpredictable. Don’t worry - we’ve got you. Here’s your full, step-by-step guide to getting a mortgage as a self-employed borrower.
1. How Lenders View Self-Employed Income
When you’re self-employed, lenders need proof that you can reliably make monthly payments. Here’s what they typically look at:
Income consistency: Most lenders want to see 2–3 years of earnings, either through SA302 tax returns, tax year overviews, or audited accounts if you’re limited.
Profit trends: A steady or growing income is ideal. Lenders are cautious about big swings or sudden drops.
Business type matters: Freelancers, sole traders, and limited company directors are all treated differently. For example, limited company directors may need to provide dividends plus salary details, while sole traders rely on profit after expenses.
Example: Sarah, a freelance graphic designer in Heswall, had a 10% deposit and three years of consistent accounts. A mainstream lender approved her mortgage quickly because the accounts clearly showed her income was stable.
2. Deposits and Affordability
Deposit size: Self-employed borrowers usually need 5–20%, same as employed buyers, but larger deposits can improve your chances if income fluctuates.
Affordability check: Lenders assess your monthly expenses, existing debts, and credit score, just like for employed applicants.
Tip: Keep business and personal expenses separate. Mixing them can make your outgoings look higher than they are.
Local insight: Buyers in West Kirby or Birkenhead often find that increasing a deposit by just 5% opens up better mortgage rates and more lender options.
3. Essential Documentation
Having everything ready is key. Most self-employed mortgage applications require:
SA302 (tax calculation summary) forms from HMRC for the last 2–3 years
Tax year overviews
Business accounts (if applicable)
Bank statements showing income deposits
Tip: Lenders want to see the story behind your numbers. Any irregular payments should be explained (e.g., client payment cycles, project-based earnings).
Here’s your full, step-by-step guide to getting a mortgage as a self-employed borrower.
4. Interest Rates and Mortgage Deals
Self-employed borrowers can still get great rates. A few points to consider:
Some lenders charge slightly higher rates due to perceived risk - but competitive fixed-rate and tracker mortgages are widely available.
Larger deposits or clear, consistent income can qualify you for better rates.
Working with a broker familiar with self-employed mortgages is often the fastest route to the right deal.
5. Tips to Boost Approval Chances
Keep your finances clean: Separate business and personal accounts.
Document everything: Consistent records of income and tax payments help.
Avoid unexplained withdrawals: Large, irregular payments can worry lenders.
Use an experienced broker: They know which lenders prefer self-employed applicants and can save weeks of paperwork.
Example: Tom, a contractor in Wallasey, used a broker who matched him with a lender that specifically favoured contractors with variable income. He got approved with a 15% deposit and a competitive fixed rate.
6. Extra Considerations for Wirral Buyers
Government schemes: First-time buyers in Wirral towns like Heswall or West Kirby can explore Help to Buy or shared ownership schemes to reduce deposit requirements.
Local knowledge matters: Wirral-based brokers understand which lenders are flexible with self-employed applicants and can guide you through local solicitor and surveyor options.
Lender-specific affordability boosters: some lenders offer special affordability boosts for customers who meet set criteria which can enable you to boast your borrowing by up to 20%. These have recently been rolled-out to self-employed applicants too.
7. Common FAQs
Q: Can I get a mortgage if I’ve only been self-employed for one year?
A: It’s harder, but some lenders consider 12 months of consistent income, especially if you have a strong deposit and healthy savings.
Q: Do limited company directors have it harder?
A: Slightly. Lenders often ask for salary plus dividends. Properly documented accounts are key.
Q: Will my credit score affect approval?
A: Yes - just like any borrower. Keeping on top of personal and business credit helps.
Q: What if my income fluctuates month-to-month?
A: Lenders focus on annual income over 2–3 years, so short-term swings are usually fine. Clear documentation is essential.
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Bottom line: Being self-employed doesn’t have to block your path to buying a home. With good records, a realistic deposit, and the right broker, you can secure a mortgage and get moving on your dream home.
Mortgages, simplified.