Self-employed mortgage calculator

How self-employed mortgage affordability is assessed

Lenders assess self-employed income in different ways depending on how you trade. A sole trader or partner is usually assessed on net profit from SA302s or tax year overviews. A limited company director is typically assessed on salary and dividends, although some lenders will also consider retained profit. Contractors may be assessed on their contract or day rate rather than their tax returns.

Most lenders will look at one to three years of trading history, with the more flexible options accepting a single full year of accounts.

Why self-employed borrowing can vary between lenders

Two lenders can offer very different borrowing amounts from the same income. That is because each lender uses its own income assessment method, income multiple and affordability model.

For example, one lender may average your last two years of net profit, while another may use your latest year only. A contractor lender may annualise your day rate, which can produce a significantly higher figure than using your tax return.

What documents self-employed borrowers may need

• SA302s
• Tax year overviews
• Business accounts
• Bank statements (personal and business)
• Accountant details
• Contracts, where relevant
• Company accounts, where relevant

How a broker can help

A broker can compare lenders based on how they assess your self-employed income, rather than only comparing headline rates. That can make a meaningful difference to how much you may be able to borrow and which lenders are likely to consider your application.