Last reviewed on 7th July 2023 by Martin Alexander (Mortgage Advisor)
Use our self-employed mortgage calculator to check how much you can borrow for a mortgage.
How will my mortgage be calculated if I’m self-employed?
If you’re self-employed, lenders will typically use the figures you’ve submitted in your tax returns or company accounts. They’ll then base your loan amount on the income you’ve declared. Furthermore, the type of self-employment you have will also make a difference.
For instance, a sole trader is assessed differently from a company director. A sole trader will be assessed on net profit income, whereas a director will be assessed on dividends and company profits.
How many years do you have to be self-employed to get a mortgage?
Your lender will factor in your employment history, such as how long you’ve been trading. For instance, those self-employed for three years or more typically find it easier to get a mortgage. That being said, it’s possible to get a mortgage even if you’ve only been self-employed for one year. It’s crucial to have filed your latest accounts, as your lender will request this information.
How much deposit will I need for a mortgage if I’m self-employed?
Most lenders require self-employed applicants to have a 10% mortgage deposit, but it’s possible to get a mortgage even with a 5% deposit. Lenders will assess your credit file and whether the mortgage you’ve applied for is affordable. If you satisfy a lender’s requirements, you may be approved with a 5% deposit.
If you fall short of meeting a lender’s criteria, a deposit of 10-15% might be enough to get a mortgage. It’s also important to note that a mortgage with a 5% deposit typically has higher rates when compared to mortgages with higher deposits.
Self-employed mortgage guides
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.