At Oak Mortgages, we help sole traders, directors, and business owners secure mortgages every day, even when income is complex.
The key isn’t whether you’re self-employed…
It’s how your income is assessed.
And that’s where expert advice makes all the difference.
What Is a Self-Employed Mortgage?
There’s no specific product called a “self-employed mortgage.”
You’ll access the same mortgage deals as everyone else, but lenders will assess your income differently depending on your business structure.
How Lenders Assess Self-Employed Income (This Is Where It Matters Most)
This is one of the most important parts of your application and where many people go wrong.
Different lenders assess income in different ways
For Sole Traders
Most lenders will use:
- Net profit (after expenses)
- Usually averaged over 1–2 years but some will accept the latest years and we even have a lender that would consider 6 months with an accountants projection, however you will need a large deposit for this option.
- CIS workers – depending on if you or the company pay your tax the lender may treat you as employed.
For Limited Company Directors
This is where things get more flexible and more powerful
At Oak Mortgages, we work with lenders who can assess your income using:
Salary + Dividends (most common approach)
Salary + Share of Net Profit (pre and post task lenders differ on this)
Some lenders will also consider an accountants projections for the upcoming accountants year.
This can significantly increase how much you can borrow.
Why This Makes a Big Difference
Many business owners minimise dividends for tax efficiency.
So if a lender only looks at:
Salary + dividends → your income may look lower
But some lenders will consider:
Salary + net profit
This can unlock much higher borrowing potential
Example
- Salary: £12,000
- Dividends: £20,000
- Net profit: £80,000
Some lender’s view: £32,000 income
other lender’s view: £92,000 income
That’s a huge difference in borrowing power.
Who Counts as Self-Employed?
Most lenders class you as self-employed if you:
- Own 25% or more of a business
- Earn your main income from it
This includes:
- Sole traders
- Freelancers
- Contractors
- Limited company directors
- Business partners
Can You Get a Mortgage as a Sole Trader?
Yes and we help clients do this every day.
The key factors lenders look at:
- Income consistency
- Business performance
- Credit profile
- Deposit size
How Much Can You Borrow?
Most lenders offer:
Around 4x – 6x your usable income
But here’s the key
The way your income is calculated directly impacts your borrowing.
That’s why using a broker like Oak Mortgages can make such a big difference, we structure your case to maximise affordability.
How Many Years of Accounts Do You Need?
Standard:
- 2 years of accounts or SA302s
But we can help with:
✔ 1 year of accounts
✔ Newly self-employed cases
✔ Strong industry track record
Why Being Self-Employed Can Be More Challenging
- Income can fluctuate
- Less historical data
- Some lenders are more cautious
But the biggest issue we see is simply choosing the wrong lender.
How to Improve Your Chances
- Keep Your Accounts Consistent
- Work With a Good Accountant
- Manage Your Credit Profile
- Keep Bank Statements Clean
- Build a Strong Deposit
What Documents Will You Need?
- SA302s & Tax Year Overviews
- Business accounts
- Bank statements
- ID & proof of address
- Deposit evidence
Can You Get a Mortgage with 1 Year Self-Employed?
Yes depending on:
- Previous employment history and Industry experience – although not always needed.
- Strength of first year
Contractors & CIS Workers
Some lenders will assess:
Day rate × working days × selected number of weeks, generally 48 but can differ from lender to lender.
Other will take your latest 3 months payslips if you receive these and the company pay your tax and national insurance.
This can often increase borrowing compared to traditional methods.
How Oak Mortgages Can Help
At Oak Mortgages, we specialise in:
✔ Sole traders
✔ Limited company directors
✔ Contractors & CIS
✔ Complex income structures
✔ Credit blips
We focus on:
- Maximising your income correctly
- Matching you to the right lender
- Getting your mortgage approved smoothly
Ready to See What You Could Borrow?
If you’re self-employed and looking to:
- Buy your first home
- Move house
- Remortgage
- Release equity
Get in touch with Oak Mortgages today for your free, no obligation consultation.
