Getting a mortgage when self employed

Self-employed mortgage guide by Furness Building Society

How to get a mortgage when self-employed

Firstly, let us start by reassuring you that getting a mortgage when you’re self-employed is possible. In fact, it’s becoming more common.

In recent years, the desire to change from working for someone else to becoming the captain of your own ship has increased. There are millions of self-employed workers in the UK*, across all manner of industry, and it’s a trend that’s growing.

There are clear benefits so it’s easy to see why. Greater flexibility, control over your own professional destiny plus the potential financial reward.  These are all aspects that have seen many take the leap to become freelancers or business owners.

*Office for National Statistics

An example of a self-employed career: A barber cutting a young male’s hair.

However, there are also some risks. You become reliant on yourself for your monthly or weekly income and your earnings may not always be consistent. For this reason, being self-employed can make getting a mortgage more difficult, but not impossible.

At Furness, we pride ourselves on our flexible lending criteria and our commitment to making the process as painless as possible - to suit your personal or professional circumstances. In this guide, you'll find answers to some of the questions you may have about getting a mortgage when you’re self-employed.



Mortgages for the self-employed

What is a self-employed mortgage?

In truth, there is no such thing as a self-employed mortgage*. When you're self-employed and applying for a mortgage, you’ll be applying for the same mortgages as those who earn a living working for someone else.

What will prove different is the assessment process. If you’re self-employed, passing a lender’s affordability tests can prove more difficult and more complex. This is because there’s no employer to vouch for your income, which dictates your ability to repay the mortgage.

Self-cert mortgages (or self-certified, self-certification) used to enable those who were classed as self-employed to borrow money on a property without proof of income - but they’re a thing of the past.

The self-employed mortgage process was modified in 2014 and lenders will now demand other methods and financial documentation as proof of income so it’s important to ensure you know what to expect. There may be a few more hurdles to jump but if you’re prepared, there’s no need to let that put you off.


What's classed as self-employed for a mortgage?

Can I get a mortgage with retained business profits?

Self-employed mortgage requirements

What evidence is needed for a self-employed mortgage?

Before you start the application process, take the time to dig out and collate the documentation you’ll likely be asked to show. For self-employed mortgages, evidence typically includes:

  • A full SA302 form from the previous 2 / 3 years (or a tax overview from HMRC).
  • Certified business accounts from the previous 2 years+.
  • Documentation for dividend payments and/or any retained profits within the business.
  • Documentation for any upcoming contracts, if applicable.

How many years of accounts do you need for a self-employed mortgage?

Self-employed mortgage advice

With a self employed mortgage, how much can I borrow?

There isn't really a rule on how much you can borrow with a self-employed mortgage.  As with any mortgage, the amount you can borrow will ultimately come down to the size of your deposit and your current income. A strong credit score will also see you on your way.

How can I boost my chances of getting a mortgage when self-employed?

Next steps

Hopefully you’ve found our guide to getting a mortgage when self-employed useful. If you have any questions, please get in touch with our mortgage team to discuss your plans.You can do this by either visiting us in branch or giving us a call on 0800 834 312.