Mortgage Options for Self-Employed Individuals in 2025: What You Need to Know

Last Updated: 08 October 2025

If you are self-employed and asking “Can I get a mortgage in the UK?” the answer is yes, but the process works differently compared to salaried applicants. Lenders want to see proof that your income is both reliable and sustainable, which usually means providing one to two years of accounts or SA302 tax returns, along with recent bank statements.

How your income is assessed often depends on how you work. Sole traders are normally judged on net profit, while limited company directors may have both salary and dividends taken into account. Some lenders will also look at retained profits, which can make a big difference. Contractors and freelancers may be able to use day rates or ongoing contracts to evidence affordability, provided they can show stability in their sector.

Challenges such as fluctuating earnings or gaps in trading history do not automatically rule you out, but they can make the process more complex. This is where specialist lenders and experienced brokers become valuable. They understand the nuances of self-employed applications and can point you towards products that fit your circumstances.

With the right preparation, getting a mortgage while self-employed in 2025 is entirely possible.

How Do Self-Employed Mortgages Work in the UK?

There’s no such thing as a separate “self-employed mortgage”, the difference lies in how your income is assessed.

Rather than using payslips and a P60, lenders will ask for:

• Your last 1-2 years of tax returns (SA302s)

• Full business accounts (signed by a qualified accountant is a bonus)

• Evidence of ongoing income or contracts (especially for contractors)

  
  

They want to see that your income is:

• Consistent

• Sustainable

• And enough to support repayments over the long term

What If I Only Have One Year of Self-Employed Income?

Many self-employed individuals wonder:

“Can I get a mortgage with 1 year of self-employed income in the UK?”

Yes, some specialist lenders will consider applicants with only 12 months of trading, especially if:

• You were previously employed in the same industry

• You have strong turnover and net profit

• Your business is clearly growing

You may need a larger deposit or accept a slightly higher interest rate, but it's absolutely possible with the right support.

What Documents Do I Need?

To boost your chances of success, gather:

• SA302 tax calculations and tax year overviews (1–2 years)

• Finalised business accounts (profit & loss)

• Recent bank statements (personal and business)

• Current contract or pipeline (for contractors)

• Accountant’s letter confirming your income stability

Having these upfront helps your mortgage broker match you with the right lender faster.

Best Mortgage Options for Self-Employed People

While many mainstream banks do offer mortgages for self-employed clients, specialist lenders often take a more flexible approach.

These lenders might:

• Accept just one year of accounts

• Use retained profits and dividends (not just salary)

• Look at day rates or contract income for IT contractors or consultants

• Accept joint applications where only one applicant is self-employed

  
  

Common Challenges (And How to Solve Them)

1. Fluctuating Income

Solution: Some lenders average your last 2 years’ income, while others look at the most recent year if income is increasing.

2. Poor Record Keeping

Solution: Work with an accountant who can prepare and certify your documents quickly and professionally.

3. Limited Company Directors

Solution: Some lenders consider both salary and dividends, while others look at net profit. Choose a lender that reflects your true income.

4. High LTV (Low Deposit)

Solution: A good broker can help you find lenders who offer 90–95% mortgages for self-employed applicants with strong affordability.

Expert Tips for Self-Employed Mortgage Applicants

• Plan ahead before applying: Start organising your accounts early. Having at least 12 months of clean, well-presented records makes a big difference.

• Work with a qualified accountant: Professionally prepared accounts carry more weight with lenders than self-assessments alone.

• Keep personal and business finances separate: Clear separation makes it easier to evidence income and strengthens your application.

• Consider timing: Apply when your income is stable or trending upward, as lenders may average your last two years.

• Use a broker who knows the market: Specialist brokers understand which lenders will accept retained profits, day rates, or just one year of trading.

  
  

Common Mistakes to Avoid

• Relying only on high street lenders: Many mainstream banks have strict criteria that exclude self-employed applicants, even with strong earnings.

• Neglecting record keeping: Missing tax overviews, incomplete accounts, or inconsistent bookkeeping can slow down or even block your application.

• Overestimating affordability: Borrowing limits are not just about turnover; lenders will look closely at profit and sustainability.

• Failing to disclose fluctuations: Gaps in trading history or income dips should be explained, not hidden. Lenders value transparency.

• Waiting until the last minute: Applying when your deal is about to expire leaves little time to prepare documents or explore specialist options.

Conclusion

Many self-employed clients worry that they’ll struggle to get a mortgage, but the reality is, there are lenders who understand your situation.

At Manor Mortgages, we’ve helped:

• First-time buyers just 12 months into freelancing

• Company directors with fluctuating income

• Contractors with day-rate based applications

• Self-employed remortgagers during economic uncertainty

"I had a fantastic experience with Manor Mortgages. As a self-employed buyer, I thought securing a mortgage would be more challenging, but Ben, Hayley, and James made the process smooth and stress-free. They were incredibly knowledgeable, supportive, and always kept me informed. I moved into my new home this weekend and I’m so pleased and grateful to the team! Highly recommend their services!" - Nadia

FAQs

1. Can I get a mortgage with only one year of self-employed accounts in the UK?

Yes, some specialist lenders may consider applicants with just 12 months of trading, especially if you were previously employed in the same industry or have strong growth. However, a larger deposit or slightly higher rate may be required.

2. Do self-employed people pay higher mortgage rates?

Not automatically. Rates are based on your overall profile, including income stability, credit history, and deposit size. Specialist products may carry higher rates, but strong applications often secure competitive deals.

3. What documents do I need for a self-employed mortgage?

Most lenders will ask for one to two years of SA302 tax returns, full business accounts, bank statements, and, for contractors, evidence of ongoing contracts. An accountant’s letter can also strengthen your case.

4. How do lenders calculate income for limited company directors?

Some lenders use only salary and dividends, while others also consider retained profits. Choosing the right lender is key to reflecting your true affordability.

5. Can contractors use day rates to get a mortgage?

Yes, many lenders accept day rates or contract values as proof of income, provided you can show continuity of work in your sector.

6. Does fluctuating income mean I will be declined?

Not necessarily. Some lenders average income across two years, while others may use the most recent year if your earnings are rising. Explaining the reasons for fluctuations helps.

7. Are joint applications easier for self-employed borrowers?

Often yes. If one applicant is salaried and the other is self-employed, the stable income can balance the risk, widening the pool of lenders willing to consider the case.

Written by Ben Stephenson, CeMAP‑qualified Mortgage Broker, and reviewed by Mortgage Experts.

Manor Mortgages is FCA authorised (496907), has business for nearly 30 years and is highly positively reviewed (4.9 rated on Google). We have helped thousands successfully secure the right mortgage. Bristol based mortgage brokers, but can assist nationwide.