Although by no means impossible, it’s fair to say that organising a mortgage when you’re self-employed can be a bit of a headache. Sharon Duckworth, director of Key Mortgage Advice, answers your questions and lays out the options available.  

How will my self-employment mortgage be calculated?

Just like with a regular mortgage, how a self-employment mortgage is calculated will depend on the lender. Some will calculate your mortgage using your previous year of trading alone, while others will set the amount you can borrow based on a number of years.

If you’re a sole trader or a partnership, lenders will take net profits as income and for limited companies they will usually look at salary and dividends. The problem faced is that some lenders find it more difficult to assess self-employed people for mortgages.

How can I improve my chances of getting a self-employment mortgage?

Most lenders will want to see your accounts or tax returns from the past two to three years, so make sure these are up-to-date. Your most recent accounts cannot be more than 18 months old and it’s a good idea to use a chartered or certified accountant.

You can also do a self-assessment to prove your income using a SA302 form, which you can get from an accountant or HMRC, and nearly all lenders will take this into account.

It goes without saying that you should ensure your credit rating is high by paying off any debts and checking you’re on the electoral register at your current address. It’s wise to keep tabs on your spending and regular outgoings too, and you’re likely to need a deposit of up to 20 per cent.

What type of mortgage am I entitled to?

Generally speaking, you have access to the same mortgage products as everyone else so long as you can put down a good deposit and prove you can make the repayments on the loan.

You should have the choice between fixed and variable rate mortgages and although specialist lenders exist, mainstream mortgage lenders lend to the self-employed too. Some lenders do ask for a larger deposit if you are self-employed but again this varies lender to lender. The best advice is to shop around for the best rate, or speak to a broker who can do this for you.

If you would like help or advice regarding commercial or residential mortgages, contact Sharon Duckworth on 01772 620 000 or email