Self-employed mortgage calculator

How much can I borrow if I'm self-employed?

Self-employed borrowers are often assessed using income multiples, but the income figure used can vary by lender.

A sole trader or partner may be assessed using profit evidenced by accounts or tax calculations, with corresponding tax year overviews where requested. An overview supports the calculation; it doesn’t provide the same income breakdown. A limited company director may be assessed using salary and dividends or salary plus their share of company net profit, depending on the lender. Eligible contractors may be assessed using contract or day-rate evidence.

Our borrowing guide explains what affects your borrowing amount beyond the income figure.

This means two lenders can look at the same borrower and calculate different borrowing amounts.

As a rough guide, many lenders may use income multiples around 4 to 4.5 times eligible income, although this depends on affordability, deposit size, credit history, debts, dependants and wider circumstances. Some borrowers may be able to access higher multiples, while others may be offered less.

How this self-employed mortgage calculator works

The calculator estimates your borrowing range using your selected employment type, income, deposit, credit commitments, estimated interest rate and mortgage term.

Monthly credit commitments are modelled using a simplified affordability adjustment before the borrowing estimates are calculated. Real lenders use their own affordability models, so the impact of debts and other commitments can differ.

Depending on the employment type selected, the calculator uses:

• Sole trader / partnership: the average of your latest and previous year net profit, or your latest year only if you select that option
• Limited company director: salary plus dividends. If you choose to include your share of company profit, a separate alternative estimate is shown using salary plus your shareholding percentage of the latest year company net profit. Dividends are excluded from that alternative to avoid counting the same profit twice.
• Contractor: day rate multiplied by days per week and weeks per year, less any annual expenses or deductions you enter

The result shows:

• Estimated usable income
• Conservative borrowing estimate
• Typical borrowing estimate
• Higher borrowing estimate
• Estimated monthly repayment
• Required loan amount
• Estimated loan-to-value

These figures are not a mortgage offer or decision in principle. They are designed to help you understand a possible borrowing range before speaking to a broker or lender.

Why self-employed mortgage affordability can vary

Self-employed mortgage affordability can vary because lenders do not all assess income in the same way.

One lender may average your last two years of income, while another may use your latest year only. Some lenders are more comfortable with limited company directors, contractors or applicants with only one full year of accounts.

Your result can also be affected by:

• Deposit size
• Loan-to-value
• Credit commitments
• Credit history
• Number of dependants
• Trading history
• Type of income evidence available
• Whether income is rising, falling or inconsistent

This is why a self-employed borrower may be declined by one lender but accepted by another.

What documents self-employed borrowers may need

The documents you need can depend on your business structure and the lender's criteria.

Depending on your business structure and lender, you may be asked for some of the following documents. Not every applicant needs every item.

• SA302s
• Tax year overviews
• Business accounts
• Personal and business bank statements
• Accountant details
• Contracts, if you are a contractor
• Company accounts, if you are a limited company director
• Proof of deposit
• ID and address documents

For more detail, read our guide on the documents you'll need for a self-employed mortgage.