How Long Do You Need To Be Self-Employed For a Mortgage?

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If you’re self-employed and thinking about buying a home, you might be wondering: how long do you need to be self-employed for a mortgage? It’s a fair question, especially since lenders often see self-employed people as a bigger risk compared to those on a regular salary. But don’t worry — getting a mortgage when you work for yourself is very possible. Let’s break it down.

Table of Contents hide

1 The Typical Requirement: Two Years

2 Can You Get a Mortgage With Just One Year?

3 What About Newly Switched Self-Employed People?

4 How Can You Strengthen Your Application?

5 FAQs

6 Continue Reading

The Typical Requirement: Two Years

Most UK mortgage lenders want to see at least two years’ worth of self-employed accounts or tax returns. This helps them check that your income is stable and reliable. They’ll usually look at your average earnings over those two years to decide how much they’re willing to lend you.

If you’re a sole trader, they’ll look at your net profit. If you run a limited company, they’ll often look at your salary plus dividends — though some lenders may also consider retained profits.

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Can You Get a Mortgage With Just One Year?

Yes, it’s possible, but it’s harder. Some specialist lenders or brokers might accept just one year of accounts if you have a strong income, a good credit history, and a healthy deposit. But be aware — your mortgage options will be more limited, and you may need to pay a higher interest rate.

If you’ve only recently gone self-employed, you’ll probably need to wait until you’ve got at least a full tax year under your belt. Without any trading history, lenders won’t have enough to assess your earnings.

How Long Do You Need To Be Self-Employed For a Mortgage?

What About Newly Switched Self-Employed People?

Let’s say you were in the same line of work before but recently became self-employed — for example, you were an employed plumber but now run your own plumbing business. Some lenders might look kindly on this because you have a proven track record in the same field, even if you haven’t been self-employed for long.

Still, it depends on the lender. Speaking to a mortgage broker can help you find the right fit.

How Can You Strengthen Your Application?

Here are a few tips to improve your chances of getting a mortgage when you’re self-employed:

Keep good records: Up-to-date accounts, tax returns, and bank statements will make things smoother.
Hire an accountant: Many lenders prefer accounts prepared by a certified or chartered accountant.
Save for a bigger deposit: The more you can put down, the less risky you’ll seem to lenders.
Check your credit score: Make sure there are no nasty surprises on your credit file.
Reduce debts: Paying down loans or credit cards can improve your affordability.

FAQs

Can I get a mortgage if my self-employed income has recently increased?

Yes, but most lenders will still look at your average income over the past two years, not just the recent jump. They want to see consistency, so even if you had a great year, it might not carry full weight if the year before was much lower.

Do lenders treat sole traders and limited company directors differently?

They can, yes. Sole traders are assessed on net profit, while limited company directors are usually assessed on salary plus dividends. Some lenders might also consider retained profits if you don’t take all the money out of the business, but not all will.

What paperwork do self-employed applicants need for a mortgage?

You’ll generally need SA302 forms, tax year overviews, company accounts, and recent bank statements. If you use an accountant, you might also need an accountant’s reference. Having everything ready can speed up the process.

Can I use future contracts or upcoming work to prove income?

Usually, no—lenders prefer to see completed income, not just promises of future earnings. However, if you have long-term contracts in place (common for contractors), some specialist lenders might take them into account.

Does switching from sole trader to limited company reset the clock?

Not necessarily. If you’re doing the same work but just changed your business structure, some lenders may view it as a continuation of your self-employment. But others might treat it as starting fresh, so it’s worth checking in advance.

Will my partner’s income help if they’re employed?

 Yes! If you’re applying for a joint mortgage, your partner’s steady employed income can strengthen the application, balance the risk, and potentially increase how much you can borrow — even if you’re newly self-employed.

Do self-employed mortgages take longer to process?

They can, because lenders often request more paperwork and may ask additional questions to understand your income. It’s a good idea to allow extra time and work with a broker who knows how to handle self-employed cases.