How This Self-Employed Mortgage Calculator Work

Our calculator uses the information you provide about your business type and income to estimate your potential borrowing amount. 

It’s based on typical lending criteria used by many UK mortgage providers, but remember, it’s just a starting point.

The calculator considers factors like:

• Your type of self-employment (sole trader, limited company director, etc.)
• Years of trading
• Your annual income or profits

Using this data, it applies standard income multiples (usually 4-4.5 times your annual income) to give you a rough idea of what you might be able to borrow.

How To Use This Self-Employed Mortgage Calculator?

Using our Self-Employed Mortgages Calculator is as easy as pie, and you don’t even have to give any personal details. 

Here’s what you need to do:

1. Pick your type of work – whether you’re a sole trader, in a partnership, a contractor, or a director.
2. State how many years you’ve been in business.
3. Plug in your earnings for the last one, two, or three years—whatever fits your situation.

Note:

• If you’re part of a partnership, include your share of the business profits.
• If you’re a company director, choose if you want the estimate based on your salary and dividends, or on the business’s retained profits.
• If you’re a contractor, use your daily rate and how many days a week you work.

And voila! The calculator will then give you an estimate of how much you might be able to borrow for your mortgage.

📝 Things To Consider

When using our self-employed mortgage calculator, here are a few things to remember:

• Accuracy matters – The estimate you get is based on the information you provide. To get the best results, make sure your income details are correct.
• It’s just an estimate – The calculator gives you a rough idea of what you might borrow. Mortgage rates, lender policies, and your situation can change, so use the result as a guide, not a guarantee.
• Your data is safe – The calculator doesn’t save any personal or financial details, so you can use it without worrying about privacy.
• Not a formal offer – The result isn’t an official mortgage offer. You’ll need to speak to a broker or lender for a formal agreement.
• Other costs to consider – The calculator shows your potential borrowing amount and monthly payments, but don’t forget fees like stamp duty, legal fees, and arrangement fees.
• Changes in finances – The calculator doesn’t account for future changes in your income or expenses, so factor in any expected changes when thinking about your mortgage options.

Feel free to try different figures as often as you like to see various scenarios. This will help you make a better decision when choosing the right mortgage for you.

What Do Your Results Mean?

After using the calculator, you’ll see an estimate of how much you might be able to borrow. 

This figure is based on typical lending multiples of 4-4.5 times your annual income. 

For example, if your average annual income is £50,000, you might be able to borrow between £200,000 and £225,000.

Remember, this is just a starting point. Lenders will look at other factors too, like your credit score, existing debts, and regular outgoings.

For a more accurate estimate and personalised advice, it’s best to speak to a qualified mortgage broker. We can help connect you with one for free—just get in touch.

Digging Deeper: Self-Employed Mortgages Explained

What are Self-Employed Mortgages?

A self-employed mortgage isn’t a special type of mortgage—it’s the same as any other. The difference is in the application process.

If you’re employed, lenders simply look at your salary to decide how much they’ll lend. It’s straightforward. 

But if you’re self-employed, lenders want to see that you can still afford your payments, even if your income changes from month to month.

That’s why they usually ask for more proof of your income, typically over 2-3 years.

They’ll look at your:

• tax returns, 
• business accounts, or 
• other financial documents to get an idea of your average yearly income.

Once they have that figure, they’ll use it to decide how much you can borrow, just like they would for anyone else.

So, while the mortgage options are the same, you’ll just need to provide more evidence to show you’re a reliable borrower. 

Don’t worry—it’s manageable with some good planning. 🤓

How Does Being Self-Employed Affect Your Mortgage Calculation?

As discussed, when you’re self-employed, your mortgage size is often tied to the income you report on your tax returns or company accounts. 

The kind of self-employment you’re in matters too. 

For example:

• If you’re a sole trader, your mortgage will usually be based on your net profit.
• If you’re a company director, the focus shifts to your dividends and company profits.

How Lenders Determine Mortgage Amount For Self-Employed

Lenders calculate your mortgage affordability by reviewing your average annual income over the past 2-3 years. 

They will apply their standard income multiples (usually 4 to 4.5 times your annual income) to determine how much they can lend. 

Some specialist lenders may even offer up to 5 or 6 times your earnings, depending on your profession and financial situation.

How Long Should You Be Self-Employed to Get a Mortgage?

Most lenders prefer that you’ve been self-employed for at least two to three years. 

However, if you have only one year of accounts, don’t lose heart. 

Some specialist lenders might still consider your application. In this case, having a solid financial record and a bigger deposit can help improve your chances of approval.

Also, have your latest accounts ready because lenders will ask for them.

Self-Employed Mortgages Eligibility Criteria

To qualify for a self-employed mortgage, you need to:

• Provide at least 2 to 3 years of certified accounts, ideally prepared by a chartered accountant.
• Show steady or rising income over the past 2 to 3 years using your SA302 forms and tax overviews from HMRC.
• Have a deposit of 5% to 20%, depending on the lender and your circumstances.
• Keep a good credit score, as lenders will check this to see if you’re reliable.
• Separate your business and personal finances to make it easier for lenders to see your income.
• Show that your business is stable, with proof of regular contracts or ongoing work.
• Provide evidence of any extra income, such as rental income or dividends.
• Pass affordability checks that will look at your living costs, debts, and whether you can handle future rate increases.
• Use an accountant who’s certified by a recognised body like ACCA or ICAEW to prepare your accounts, as most lenders prefer this.
• If you have less than 2 years of accounts, some lenders might still consider you if you have a strong financial history, a larger deposit, or projections from a certified accountant.

How Much Deposit Do You Need as a Self-Employed Person?

The deposit you’ll need varies. 

Most lenders like to see a 10% deposit. But, some might let you slide with just a 5% down payment. 

But there’s a catch: your credit history and affordability come into play.

If you’re not hitting the mark on a lender’s requirements, aim for a 10-15% deposit. 

Keep in mind, that a mortgage with just a 5% deposit usually comes with higher interest rates compared to one with a bigger deposit.

How To Get Self-Employed Mortgages?

Getting a mortgage when you’re self-employed is all about proving you have a steady income. Here’s a quick guide:

1. Show 2 or more Years of Income Verified by an Accountant – The more years you can provide, and the higher the profits, the stronger your application will be.
2. Submit Tax Forms if Accounts Are Unavailable – Tax year overviews or SA302 forms from HMRC can serve as a substitute for official accounts.
3. Provide Proof of Ongoing and Future Work – This is particularly helpful if you’re a contractor with varying income.
4. Disclose Additional Business Profits – If you’re a company director, retained profits or dividends can improve your borrowing capacity.
5. Reveal Additional Income Sources – Rental income or other investments can bolster your application if documented properly.
6. Save a Large Deposit and Keep Good Credit – The bigger your deposit and the cleaner your credit history, the more favourable the terms you’re likely to get.
7. Prepare All Necessary Documents –  Having your documents ready can expedite the property-buying process

If this sounds like a lot, a qualified mortgage broker who specialises in self-employed mortgages can help by sorting out the paperwork and finding the right lender for you.

Do Self-Employed Mortgages Come With Higher Mortgage Rates? 

Not always. 

Rates depend on things like your credit score, how much you can put down upfront, and how stable your income is.

It’s not just about being self-employed. If you show lenders you’re a low-risk borrower, you can get the same rates as anyone else.

Can Sole Traders Secure Mortgages?

Sole traders have good mortgage options. Many lenders offer loans based on your income history, and some only require six months of trading. 

To get the best mortgage deal, consider finding a broker or lender who specialises in sole trader cases. 

They know which lenders can offer you customised mortgage plans at favourable rates, making a seemingly tough task easier.

>> More about Mortgages for Sole Traders and Partnerships.

How Do Mortgages Work for Directors?

If you’re a company director, getting a mortgage works much like it does for anyone else: you need to show you can make the repayments. 

But here’s the challenge: Some traditional lenders might see you as risky because they don’t understand your varied income. If that happens, don’t worry. 

There are specialist lenders who get it. They consider your total income, including things like dividends, to give you a fair assessment. So, even if one lender says ‘no’, don’t lose hope. With the right advice, you can find a lender that understands your situation.

>> More about Mortgages for Directors.

Can You Get a Mortgage If Self-Employed with No Accounts?

Yes, you can. Normally, lenders ask for three years of accounts. 

But what if you’re new to being your boss? Some lenders will accept alternative income proofs like bank statements. 

Your goal is to show that, even without accounts, you’re good for the loan. 

So not having accounts doesn’t have to stop you from getting into your dream home. A lender who gets your unique situation can make all the difference.

>> More about Mortgages for Without Accounts.

What About Mortgages for LLPs?

LLPs can get mortgages, but it’s a bit trickier. When you’re in an LLP, you’re seen as self-employed, which means a unique set of checks and requirements. 

You’ll need to show your income and explain how your LLP works. If you’re aiming to buy an investment property with partners, things may get even more complex. 

In this case, a broker with LLP expertise can guide you to the right mortgage option, making the application process less daunting.

>> More about Mortgages for LLP.

Can You Get a Joint Mortgage with a Self-Employed Worker?

Yes, obtaining a joint mortgage with a self-employed person is possible. 

In a joint mortgage, both names appear on the mortgage documents, and both parties are responsible for making the payments.

Both incomes, including the income of the self-employed person, are considered when assessing the ability to buy.

The self-employed individual will need to show proof of earnings and expenses, following the same process as if applying alone. It’s a straightforward way for both of you to work together towards homeownership.

Can Self-Employed People Get Buy-to-Let Mortgages?

Yes, they can. You might think being self-employed limits your choices, but it’s not so. 

Even if you make a small profit, like £200, that counts as income for some lenders. If you’ve been a landlord before, that’s a plus.

Here’s why: The rent you get usually covers the mortgage payments. 

So, lenders often focus more on the rent money than how you make your income. Plus, these types of mortgages often have low monthly payments, making it easier for you.

>> More about Buy to Let Mortgage for Self-Employed.

Can You Get a Mortgage if You’re Self-Employed with Bad Credit?

Bad credit can make getting a mortgage harder, especially if you’re self-employed. Although some lenders may see you as high-risk, others understand the challenges of self-employment and bad credit.

If you have serious credit problems like recent CCJs or bankruptcy, it’s a good idea to consult a knowledgeable mortgage broker. 

Also, you can prove your income through a self-assessment tax return. 

The SA302 form from HMRC is often accepted as proof of income, making your mortgage application stronger.

>> More about Bad Credit Mortgages when Self-Employed.

Can You Remortgage When Self-Employed?

Yes, you can. Start looking at options about three months before your current mortgage ends.   

Standard mortgage lenders often have stringent rules that could make it difficult to prove you’re a reliable borrower. 

However, there are specialist lenders who cater specifically to the self-employed. 

These lenders consider various income streams and are generally more flexible. 

Additionally, there are mortgage advisors who specialise in assisting self-employed individuals.

Being self-employed does add challenges, but specialist lenders and advisors can help. They focus on getting self-employed people the remortgage deals that work for them.

>> More about Self-Employed Remortgage.

The Bottom Line

Alright, you’ve crunched the numbers with our self-employed mortgage calculator. 

You’ve got a ballpark figure for your borrowing limit and monthly payments. 

But knowing the numbers is just the first step.

The smart thing to do now is consult a mortgage broker who specialises in helping self-employed individuals like you. 

A specialist broker doesn’t just pick any lender; they find lenders who understand the unique income flow and financial situations of self-employed people. 

This not only saves you time but could also land you a mortgage deal that better suits your needs.

And remember, while having strong accounts and credit is great, these brokers also know lenders who are flexible with requirements. 

If your self-employment is fairly new or you’ve faced credit issues in the past, the right broker can be a game-changer.

So, don’t hesitate. 

Simply, fill out this quick form to reach out. And we’ll promptly connect you with a qualified mortgage advisor who understands the ins and outs of self-employed mortgages. 

FAQs

Can I get a mortgage with just 1 year of self-employment?

Yes, you can, but it’s tougher. Most lenders like seeing 2-3 years of accounts. Yet, some are okay with just one year. You’ll have fewer options, but it’s doable.

>> More about Self-Employed Mortgages with 1-year accounts

Can I get a mortgage if I am self-employed for less than 2 years?

Sure, you can! While many lenders want three years of accounts, some are more relaxed. To avoid being turned down and hurting your credit score, talk to a broker who knows about self-employed mortgages.

>> More about Self-Employed Mortgages with 2 years of accounts

Is a mortgage possible after a SEISS grant?

Yes, but it’s tricky. Some lenders get nervous if you’ve had a SEISS grant, thinking you’re not earning enough. But the grant counts as income. Pick your lender carefully. Some are easier on SEISS grant recipients. A specialist broker can guide you.

>> More about Self-Employed Mortgages after SEISS Grant.

Can taxi drivers get a mortgage?

Absolutely! Being a taxi driver isn’t a roadblock. Many lenders will consider you if your accounts are solid. But be smart about which lender you choose. Your application needs to be spot-on to avoid rejection.

>> More about Mortgages for Taxi Drivers

Can I share a mortgage with a self-employed person?

Yes, you can. In a joint mortgage, both people’s names go on the papers and both help with the payments. The self-employed person has to show how much they earn, just like anyone else would have to. It’s a team effort to own a home.