Is it easy for the self-employed to get a mortgage?

There is a myth that finding mortgages for the self-employed is virtually impossible. According to a recent survey, almost 70% of people who work for themselves believe they’re unlikely to secure a mortgage.

But that isn’t the case. There are mortgages for the self-employed, they can just take a little longer to organise if your financial affairs aren’t in order.

Why? Well, it can be harder to prove earnings when you’re self-employed. That’s because monthly income often varies. And it can take longer to get all the necessary paperwork together that proves what you earn.

If you are self-employed, lenders must be happy that you’re earning enough. And they have to be confident that you can sustain your earnings to afford a mortgage.

Someone who has been self-employed for a number of years will find it easy to find a mortgage. That’s because you have years of data that proves you’ve had a sustained income.

If you are self-employed, you’re not alone. Latest statistics show that while those in self-employment has fallen over the years, almost 4.4 million worked for themselves in the first quarter of 2025.

So, if you are looking for a mortgage and self-employed, here’s all you need to know.

Prove your income

The longer you’ve been self-employed it is usually easier to secure a mortgage. You will have more choice of lenders if you have two years of accounts, although three are better.

Most lenders insist your accounts are prepared by a chartered or certified accountant.

Lenders also ask to see the income you’ve reported to HMRC and what tax you’ve paid. You will need your SA302 form or a tax year overviews. 

Both are available from HMRC and you can access them yourself if you are registered on the HMRC Gateway. If you aren’t, your accountant can access them. Some accountants may charge to do this.

What if I haven’t been self-employed for long?

If you haven’t been employed long enough to have two years of accounts, don’t worry. It may be more difficult but, again, it’s not impossible.

We have access to over 100 lenders, so can probably find one that will be suitable for your needs. These deals are often unavailable to you via high street lenders or comparison sites.

As with any mortgage application, make sure you have done your homework regarding credit. It doesn’t matter if you are employed or self-employed, a poor credit history will impact your mortgage application.

If you have a good credit history then it will make it easy to secure a mortgage at a good rate. But if you haven’t, then we may need a specialist lender to help. Or you may pay a higher rate of interest.

That’s why you need a mortgage broker like The Mortgage Dog. We know what will be required so we’ll make sure everything is in order before we approach any lender. Because if you start searching for too many mortgage products, it could have a negative impact on your credit score.

Will I pay higher interest rates?

Being self-employed doesn’t mean you are automatically charged more interest.

Like all financial services, it depends on your individual situation. As we have seen with credit history, the interest rate often depends on other factors. That includes the equity you have in your property and if you’re buying a new property, what deposit you have.

Your status

How you run your business is an important factor when applying for mortgages. Are you a sole trader, a contractor, partner or company director?

Lenders view you as self-employed if you own more than 20% to 25% of a business that you earn your main income from.

• Sole traders are often assessed differently depending on how their income has changed in recent years. If it is increasing, lenders usually take the average income from the past two or three years. If it has fallen, they are likely to use the latest and lowest figure.

• Contractors who earn a day rate usually multiply the rate by the number of working days in the year. They will also look for at least a year’s contract history. And you may also be asked for evidence of upcoming contracts.

• Limited company directors might be assessed using two methods. The first calculates their income based on salary and dividends. The second way is to assess the director’s salary in addition to retained profit in the company.

Dos and don’ts

If you’re self-employed you need to put a few things in order before applying for a mortgage:

• Do keep your records and accounts up to date.

• Do enlist a certified or chartered accountant who will prepare your accounts and tax return.

• Do speak to a mortgage broker about your options.

• Don’t assume you won’t be able to get a good mortgage deal.

• Don’t minimise your income for tax purposes. It may sound inviting but it can affect your chances of a mortgage.

What should I do next?

If you’re in the North East, then speak to The Mortgage Dog! We have lots of experience in dealing with the self-employed. Contact our friendly, helpful team today.

Your home may be repossessed if you do not keep up repayments on your mortgage