At Diamond Property Finance, we provide assistance to a wide range of self-employed clients, including entrepreneurs, business owners, limited company directors, sole traders, partnerships, and more.

Self-employed individuals face unique challenges when it comes to securing a mortgage. Traditional lenders often require proof of regular income over a sustained period, which can be difficult for self-employed individuals to provide. However, there are lenders that offer specialist self-employed mortgages, which take into account the fluctuating nature of income for self-employed individuals. These lenders may require additional documentation, such as tax returns and business accounts, to verify income.

Self-employed mortgages can offer greater flexibility, such as interest-only payments or longer mortgage terms, which may be attractive to those who are self-employed. It’s important to work with a mortgage broker who has experience in securing self-employed mortgages to find the right product and lender for your individual circumstances.

With our specialised knowledge, we can provide unique solutions to fit your situation.

How to get a self-employed mortgage

Self-employed individuals may find obtaining a mortgage more challenging than salaried employees due to their irregular or complex income structures and lack of traditional employment history. However, with the right preparation and documentation, Diamond Property Finance can make it achievable.

Self-employed mortgage criteria differs from one lender to another. Generally speaking, individuals will need to provide two years of accounts to prove minimum income for a self-employed mortgage, and supply additional documents to support the application. Depending on what type of self-employment the borrower ‘is’, will depend upon what documentation is required.

For limited company directors, personal income and dividends will most likely be used to calculate average basic income. Although criteria varies, the following documents will be required.

  • Finalised and certified accounts for 2/3 years
  • SA302 forms/HMRC tax year overviews and calculations
  • Business bank statements
  • Projected income figures and future business plans

If the borrower owns 25% or more of a business in a partnership, the income derived from this partnership can be used in support of your self-employed mortgage application. However, if it’s less than 25%, it may not be considered as self-employed income.

The individual’s share of the net profits will used to determine basic salary. Additionally, similar evidence to Limited Company Directors will typically be required.

As a sole trader or freelancer, a self-employed mortgage application is a much simpler process. This is because the lender only considers personal income. Supporting documentation includes:

  • Certified accounts
  • SA302 tax returns/HMRC tax year overview and calculations

For contractors, lenders will calculate income in the same way as a freelancer. Alternatively, if pay is based on a day-rate, some may consider annualising this to determine a basic salary. Supporting proof of income will likely include:

  • Certified accounts
  • SA302 forms/HMRC tax year overview and calculations
  • Contracted day-rate evidence
  • Signed contracts to prove ongoing work availability

Ultimately, lenders want to see consistent self-employed income with financial stability, usually across both personal and business bank statements. Whether borrowers are entrepreneurs, directors of well-established limited companies or professionals commencing their freelance careers, at Diamond Property Finance we understand self-employed mortgage challenges and work with clients and their accountants to successfully assess mortgage eligibility.


How do self employed mortgages work?

Self-employed mortgages work by considering the unique financial situation of individuals who run their businesses or work as freelancers. Unlike standard mortgages that primarily rely on stable employment income, self-employed individuals may have irregular income streams. Lenders assess their eligibility based on factors like income stability, business performance, and creditworthiness. Documentation such as tax returns, business accounts, and bank statements is crucial to demonstrate income reliability.

How are self-employed mortgages different to standard mortgages?

Self-employed mortgages differ from standard mortgages in the evaluation of income. While employed individuals provide payslips, self-employed applicants present tax returns and business accounts to showcase their financial stability. The approval process for self-employed mortgages may be more rigorous due to variable income, requiring a longer history of financial stability and business success.

How do you get a self-employed mortgage?

To get a self-employed mortgage:

– Documentation: Prepare essential documents like tax returns, business accounts, and bank statements.

– Creditworthiness: Maintain a good credit score to enhance mortgage approval chances.

– Affordability: Demonstrate the ability to afford mortgage payments, considering variable income.

– Seek Specialist Lenders: Explore lenders experienced in catering to self-employed individuals.

– Financial Adviser: Consult a financial adviser to navigate the complexities of self-employed mortgages.

Do self-employed people have to pay higher mortgage rates?

Self-employed individuals may face slightly higher mortgage rates due to perceived higher risk. Lenders may view variable income as less stable than regular employment income. However, the extent of the difference depends on factors like creditworthiness, deposit size, and the lender’s policies. Shopping around for the best deals and improving credit scores can help mitigate higher rates.

What are the requirements for self-employed mortgage?

Requirements for a self-employed mortgage often include

Proof of Income: Tax returns, business accounts, and bank statements.

Credit History: A good credit score enhances mortgage approval.

Affordability: Demonstrating the ability to meet mortgage payments.

Deposit: A sufficient deposit can positively impact mortgage terms.

Financial Stability: Lenders may assess the stability and success of the self-employed individual’s business.