Remortgage for self-employed borrowers

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Remortgage for self-employed borrowers

Navigating the world of remortgaging can be a complex endeavour, particularly for self-employed borrowers in the UK. Unlike traditional employees, self-employed individuals face unique challenges due to the variability and complexity of their income streams. Whether you’re a freelancer, contractor, or small business owner, understanding the nuances of remortgaging is crucial to securing the best possible deal.

This comprehensive guide will explore the essential aspects of remortgaging for self-employed borrowers, including how to assess your income, the benefits and drawbacks, available options, and practical steps to maximise your chances of approval. By equipping yourself with the right knowledge and strategies, you can navigate the remortgage process with confidence and potentially unlock significant financial benefits.

Is remortgaging as self-employed in the UK more difficult than for employed borrowers?

Remortgaging as a self-employed individual in the UK can indeed be more challenging compared to employed borrowers. The primary reason is the perceived risk lenders associate with self-employed income, which can be more variable and harder to verify. Here are some specific factors that contribute to these challenges:

Income verification

For employed borrowers, proving income is relatively straightforward with regular payslips and P60 forms. In contrast, self-employed individuals must provide more extensive documentation to verify their income.

Consistent income

Lenders prefer a steady and predictable income stream, which can be more challenging for self-employed borrowers. Income from self-employment can fluctuate due to seasonal trends, market conditions, or varying client demands. Demonstrating a consistent and reliable income over several years is crucial to mitigate lender concerns.

Documentation requirements

Self-employed borrowers face more stringent documentation requirements compared to employed borrowers. Along with the usual proofs of identity and address, self-employed individuals must provide detailed financial records. This can be time-consuming and requires meticulous record-keeping.


While both self-employed and employed borrowers need to maintain a good credit score, self-employed individuals might face higher scrutiny. Any financial inconsistencies or past credit issues can raise red flags for lenders. Improving and maintaining a strong credit score is essential for a smoother remortgage process.

Specialist lenders

Given the complexities, some mainstream lenders might be hesitant to approve remortgages for self-employed individuals. However, there are specialist lenders who understand the unique financial circumstances of self-employed borrowers. These lenders may offer more flexible terms but often at higher interest rates.

Market perception

The mortgage market often perceives self-employed borrowers as higher risk due to the variability in income. This perception can lead to more cautious lending practices, including higher interest rates and more stringent lending criteria.

Overcoming the challenges

Despite these challenges, self-employed borrowers can successfully remortgage by taking proactive steps:

Prepare thoroughly: Gather all necessary financial documentation well in advance. Accurate and comprehensive records can make a significant difference.

Maintain a good credit score: Ensure your credit report is accurate and address any issues that might negatively impact your score.

Consult with a broker: A mortgage broker who specialises in self-employed clients can provide valuable guidance and help you find lenders that are more likely to approve your remortgage application.

Demonstrate financial stability: Show lenders that your business is stable and has a consistent income stream. Providing future projections and business plans can also help.

Reduce debts: Lowering your existing debts can improve your debt-to-income ratio, making you a more attractive candidate to lenders.

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What’s the process for remortgaging my house in the UK if I’m self-employed?

Remortgaging your house as a self-employed individual in the UK involves several steps, each requiring thorough preparation and documentation. Here’s a detailed guide to help you navigate the process:

Assess our financial situation

Before you begin the remortgage process, take a close look at your financial situation. This involves:

  • Reviewing your income and expenses
  • Checking your credit score and addressing any issues
  • Ensuring your business accounts and personal finances are in good order

Gather required Documentation

Self-employed borrowers need to provide more extensive documentation compared to employed individuals. Key documents include:

Two to three years of certified accounts: These should be prepared by a qualified accountant.

SA302 forms and tax year overviews from HMRC: These documents provide a record of your declared income and tax paid.

Bank statements: Typically, lenders will ask for the last six months of both personal and business bank statements.

Proof of identity and address: Valid ID and utility bills or bank statements showing your current address.

Having these documents organised and ready will streamline the application process.

Research lenders and compare deals

Not all lenders have the same criteria or offer the same rates for self-employed borrowers. It’s crucial to:

  • Use online comparison tools to explore different lenders and their offers
  • Consider consulting a mortgage broker, especially one experienced with self-employed clients, to help identify the best deals and navigate lender requirements

Get an Agreement in Principle (AIP)

An Agreement in Principle (AIP) is a preliminary decision from a lender indicating how much they might be willing to lend you based on your financial situation. To obtain an AIP:

  • Provide basic information about your income, expenses, and the property
  • Submit initial documents for a soft credit check

An AIP can give you a clearer idea of your borrowing capacity and make you a more attractive applicant when negotiating with lenders.

Submit a full mortgage application

Once you have an AIP and have selected a suitable remortgage deal, it’s time to submit a full mortgage application. This involves:


  • Completing the lender’s application form
  • Submitting all required documentation
  • Providing detailed information about your business and income

Property valuation

The lender will arrange for a valuation of your property to determine its current market value. This is a crucial step as it affects the amount you can borrow and the loan-to-value (LTV) ratio.

Underwriting process

During underwriting, the lender will:

  • Review your application and documentation in detail
  • Assess your creditworthiness and financial stability
  • Evaluate the property valuation report

This stage can take a few days to several weeks, depending on the complexity of your case and the lender’s criteria.

Mortgage offer

If your application is successful, you’ll receive a formal mortgage offer from the lender. This document outlines the terms and conditions of the remortgage, including the interest rate, repayment schedule, and any fees.

Once you accept the mortgage offer, the legal work begins. This includes:

Instructing a solicitor or conveyancer to handle the legal aspects of the remortgage

The solicitor will review the mortgage offer, check the property’s title, and manage the transfer of funds

After all legal checks are complete and any existing mortgage is paid off, the remortgage process is finalised. You’ll start making payments according to the new mortgage terms.

Tips for a smooth remortgage process

Maintain clear records: Keep your financial records updated and easily accessible.

Plan ahead: Start the process early to ensure you have ample time to gather documents and address any issues.

Consult professionals: A mortgage broker and solicitor can provide valuable guidance and support.

How long does it typically take to remortgage as a self-employed person?

The remortgage process for a self-employed individual in the UK can vary in length depending on several factors, such as the complexity of your financial situation, the efficiency of your lender, and how well-prepared you are with the necessary documentation. On average, the process can take anywhere from 4 to 8 weeks. Here’s a breakdown of the stages involved and the time they typically take:

Preparation (1-2 Weeks)

  • Gathering documentation: Collecting all the necessary financial documents, such as two to three years of certified accounts, SA302 forms, tax year overviews, and bank statements.
  • Credit check and financial review: Reviewing your credit score and addressing any issues that might impact your application.

Research and Application (1-2 Weeks)

  • Researching lenders: Comparing different lenders and their remortgage deals tailored for self-employed borrowers.
  • Consulting a broker: If using a mortgage broker, this step can help you find the best deals and prepare your application more efficiently.
  • Submitting an Agreement in Principle (AIP) application: Getting an initial decision from a lender, which can take a few days.

Full Application and Underwriting (2-4 Weeks)

  • Submitting a full application: Once you have an AIP, you can submit your full remortgage application along with all required documentation.
  • Underwriting process: The lender will thoroughly review your application, financial documents, and credit history. This stage typically takes the longest, as lenders need to ensure they have all the necessary information and verify your financial stability.

Property valuation (1-2 Weeks)

  • Valuation appointment: The lender will arrange for a valuation of your property to determine its current market value.
  • Valuation report: Waiting for the valuation report can take up to a week or more, depending on the availability of surveyors and the complexity of the valuation.

Mortgage offer (1-2 Weeks)

  • Issuing the mortgage offer: If everything is in order, the lender will issue a formal mortgage offer outlining the terms and conditions. This can take about a week after the valuation report is received.
  • Reviewing and accepting the offer: You’ll need to review the offer with your solicitor or conveyancer and formally accept it.

Instructing a solicitor/conveyancer: Legal professionals will handle the transfer of funds and ensure all legal requirements are met.

Completion of legal work: This includes paying off any existing mortgage and transferring the new funds. This stage can be expedited if there are no complications, but typically takes a couple of weeks.

Summary timeline

  • Preparation: 1-2 weeks
  • Research and application: 1-2 weeks
  • Full Application and underwriting: 2-4 weeks
  • Property valuation: 1-2 weeks
  • Mortgage offer: 1-2 weeks
  • Legal work and completion: 2-3 weeks

Are there any additional fees involved in remortgaging as self-employed?

When remortgaging as a self-employed individual in the UK, several fees may apply. These fees can vary depending on the lender, the complexity of your financial situation, and the specific remortgage deal you choose. Understanding these potential costs can help you budget more effectively and avoid surprises during the remortgage process. Here are the common fees you might encounter:

Arrangement fees

  • Lender Arrangement Fee: Also known as a product fee or booking fee, this is charged by the lender for setting up the new mortgage. It can range from £500 to £2,000, depending on the lender and the product.
  • Broker Fee: If you use a mortgage broker to help find and secure your remortgage deal, they may charge a fee. This can be a fixed amount or a percentage of the loan amount, typically between £300 and £1,000.

Valuation fees

  • Property valuation fee: Lenders require a valuation of your property to determine its current market value. This fee can range from £150 to £1,500, depending on the value of your property and the type of valuation required (e.g., basic valuation or a more detailed survey).
  • Solicitor/Conveyancer fees: You’ll need to instruct a solicitor or conveyancer to handle the legal aspects of the remortgage. Fees can range from £500 to £1,500, depending on the complexity of the transaction.
  • Disbursements: These are additional costs that your solicitor may incur on your behalf, such as land registry fees, local authority searches, and bankruptcy searches. Disbursements can add an extra £50 to £300 to your legal bill.

Early repayment charges

  • Early repayment charges (ERC): If you are remortgaging before the end of your current mortgage deal, your existing lender may charge an ERC. This fee can be substantial, often ranging from 1% to 5% of the outstanding mortgage balance.

Exit fees

  • Mortgage Exit Administration Fee (MEAF): Also known as a discharge fee or deeds release fee, this is charged by your current lender for closing your existing mortgage account. The fee typically ranges from £50 to £300.

Additional costs

Higher lending charge: If you are borrowing a high percentage of the property’s value, some lenders may charge a higher lending charge (HLC) to cover the increased risk. This fee is usually applicable for loans with a loan-to-value (LTV) ratio above 80-85%.

Insurance costs: You may need to update your buildings and contents insurance policies to reflect the new lender’s requirements. This can involve additional premiums or administrative fees.

Tips to minimise fees

Shop around: Compare fees from different lenders and brokers to find the most cost-effective options.

Negotiate: Some fees, such as broker fees, may be negotiable. It’s worth asking if there are any discounts or fee waivers available.

Consider fee-free deals: Some lenders offer remortgage deals with no arrangement fees or cover legal and valuation costs. These deals may have higher interest rates, so compare the overall cost carefully.

Check for incentives: Look for remortgage deals that include incentives such as cashback, free valuations, or free legal work.

How much can I borrow on a remortgage if I’m self-employed?

The amount you can borrow on a remortgage as a self-employed individual in the UK depends on several factors, including your income, credit history, the value of your property, and the lender’s specific criteria. Here’s a detailed breakdown of the key factors that determine your borrowing capacity:

Income assessment

Lenders assess your income to determine how much you can afford to borrow. As a self-employed borrower, you need to provide:

  • Two to three years of certified accounts: These should be prepared by a qualified accountant to show consistent income.
  • SA302 forms and tax year overviews from HMRC: These documents provide a record of your declared income and tax paid.
  • Bank statements: Typically, lenders will ask for the last six months of both personal and business bank statements to verify income deposits.

Lenders usually average your income over the past two to three years to account for any fluctuations. Consistent and increasing income will positively impact your borrowing capacity.

Loan-to-Value (LTV) Ratio

The Loan-to-Value (LTV) ratio is the amount you want to borrow compared to the current value of your property. For example, if your property is worth £300,000 and you want to borrow £150,000, your LTV ratio would be 50%. Most lenders prefer an LTV ratio of 75-80% or lower for self-employed borrowers, although some may offer higher LTVs under certain conditions.

Credit History

Your credit history plays a crucial role in determining how much you can borrow. A strong credit score can increase your chances of securing a higher loan amount at a competitive interest rate. Lenders will review your credit report to assess your creditworthiness and financial responsibility.

Affordability assessment

Lenders conduct an affordability assessment to ensure you can comfortably afford the remortgage repayments. This assessment includes:

  • Income: Your verified income from self-employment.
  • Expenses: Regular living expenses, existing debts, and other financial commitments.
  • Debt-to-income ratio: The ratio of your monthly debt payments to your monthly income. Lower ratios are preferable.

Business performance and stability

Lenders look at the stability and performance of your business. Factors such as how long you have been trading, the nature of your business, and its financial health will be considered. A stable and profitable business increases your borrowing potential.

Typical Borrowing Limits

While the exact amount you can borrow varies, many lenders offer self-employed borrowers up to 4-5 times their annual income. For example, if your average annual income over the past few years is £50,000, you might be able to borrow between £200,000 and £250,000. However, this is a general guideline, and individual circumstances can lead to different outcomes.

Steps to maximise your borrowing capacity

Maintain Accurate and Up-to-Date Financial Records: Ensure your accounts are prepared by a qualified accountant and that all tax documents are accurate.

Improve your credit score: Pay off existing debts, avoid missed payments, and correct any errors on your credit report.

Demonstrate business stability: Provide evidence of a stable and profitable business. Consider showing future business projections if possible.

Lower your debt-to-income ratio: Reduce existing debts to improve your affordability assessment.

Consult a mortgage broker: A broker can help you find lenders who are more flexible with self-employed borrowers and can potentially secure a higher loan amount.

What documents do I need to provide to remortgage as self-employed in the UK?

When applying for a remortgage as a self-employed individual in the UK, you’ll need to provide a comprehensive set of documents to prove your income, financial stability, and identity. Here’s a detailed list of the documents typically required:

Proof of income

  • Certified accounts: Usually, lenders require two to three years of certified accounts prepared by a qualified accountant. These accounts should show consistent income and profitability.
  • SA302 forms: These are summaries of your tax calculations provided by HMRC, showing your declared income and tax paid for each year.
  • Tax year overviews: These documents from HMRC provide a summary of the tax paid for each year and confirm the information on your SA302 forms.
  • Bank statements: Typically, lenders will ask for six months of bank statements from both your personal and business accounts to verify income deposits and overall financial health.

Proof of identity

  • Passport or driving Licence: A valid photo ID to confirm your identity.
  • Utility bills or bank statements: Recent utility bills or bank statements (usually within the last three months) showing your name and address to confirm your residence.

Proof of address

  • Utility bills: Recent utility bills such as gas, electricity, water, or telephone bills.
  • Council tax bill: Your latest council tax bill showing your address.
  • Bank or mortgage statements: Recent statements from your bank or mortgage provider, typically within the last three months.

Mortgage details

  • Current mortgage statement: A recent statement from your current mortgage provider showing the outstanding balance, current interest rate, and any early repayment charges.
  • Details of existing mortgage: Information about your current mortgage deal, including the lender’s name, mortgage account number, and terms of the mortgage.

Business information

  • Business accounts: Detailed accounts of your business performance, preferably prepared by a qualified accountant.
  • Business bank statements: Recent statements from your business bank account to show cash flow and financial health.
  • Business plan: While not always required, providing a business plan can help demonstrate the future stability and growth prospects of your business.

Additional documentation

  • Credit report: While the lender will typically obtain your credit report, having a copy can help you understand your credit standing and address any discrepancies beforehand.
  • Debt information: Details of any other loans, credit cards, or debts you have, including repayment amounts and schedules.
  • Identification from accountant: A letter from your accountant verifying your income and financial status may be required by some lenders.

How does my trading history impact my chances of remortgaging as self-employed?

Your trading history plays a significant role in determining your eligibility and the terms you might receive when applying for a remortgage as a self-employed individual in the UK. Lenders scrutinise your trading history to assess the stability and reliability of your income, which impacts your ability to repay the loan. Here are the key aspects of your trading history that lenders evaluate:

Length of trading history

  • Minimum requirement: Most lenders require a minimum of two to three years of trading history to consider your remortgage application. This period allows lenders to see consistent income patterns and business stability.
  • Longer history benefits: A longer and more established trading history can enhance your credibility and demonstrate sustained business success, potentially leading to more favourable remortgage terms.

Consistency and stability of income

  • Income trends: Lenders look for consistent or increasing income over the years. Fluctuations in income can raise concerns about the predictability of your earnings and your ability to meet mortgage repayments.
  • Profitability: Consistently profitable business accounts indicate financial health and stability, making you a more attractive borrower.

Financial documentation

  • Certified accounts: Providing detailed, certified accounts prepared by a qualified accountant can offer a clear picture of your business performance. These accounts should show consistent revenue, manageable expenses, and healthy profits.
  • SA302 Forms and tax overviews: These documents from HMRC confirm your declared income and tax paid, which must align with your business accounts and bank statements.

Business type and industry

  • Industry stability: The nature of your business and the industry you operate in can impact your remortgage prospects. Businesses in stable and less volatile industries are viewed more favourably.
  • Self-employed sector: Certain sectors, such as freelance work or consulting, might present more challenges due to perceived income instability, whereas established trades or professional services might be seen as more reliable.

Profit margins and cash flow

  • Healthy profit margins: High profit margins and efficient cost management indicate a well-run business, boosting your remortgage application.
  • Positive cash flow: Consistent positive cash flow, evidenced by bank statements, reassures lenders of your ability to manage finances and meet mortgage payments regularly.

Growth and future prospects

  • Business growth: Evidence of business growth, such as increasing revenues and expanding operations, can positively impact your application.
  • Future projections: Providing future business plans or projections can demonstrate ongoing business viability and potential for continued income stability.

Is there a minimum trading history required to remortgage as self-employed?

When applying for a remortgage as a self-employed individual in the UK, lenders typically have specific requirements regarding the length of your trading history. The minimum trading history required can vary between lenders, but here are the general expectations:

Standard minimum requirements

Two years: Most lenders require at least two years of trading history. This duration allows them to assess the consistency and stability of your income over a reasonable period.

Three years preferred: While two years is the minimum for many lenders, some prefer a three-year trading history. This extended period provides a more comprehensive view of your business performance and financial stability.

Exceptions and flexibility

One year with strong financials: In some cases, lenders might consider applications with only one year of trading history, particularly if you have a strong financial background, substantial savings, or if your business has shown significant profitability and growth within that first year.

Professional qualifications: Certain professional fields, such as doctors, accountants, or solicitors, may benefit from more lenient trading history requirements if they have recently transitioned from employment to self-employment and can demonstrate a stable and substantial income.

Factors Influencing Lender Flexibility

Type of business and industry

Lenders might be more flexible with the required trading history if your business operates in a stable and less volatile industry. Established professions with predictable income patterns may also be viewed more favourably.

Personal financial health

A strong personal financial profile, including a high credit score, significant savings, and low debt levels, can positively influence a lender’s decision. Demonstrating robust personal finances may offset a shorter trading history.

Loan-to-value (LTV) ratio

A lower LTV ratio, meaning you have a significant amount of equity in your property, can also lead to more flexible requirements from lenders. This reduces the lender’s risk, potentially allowing them to be more lenient with trading history.

Preparing for a remortgage application

  1. Thorough documentation: Ensure you have comprehensive and accurate financial records ready to present to lenders.
  2. Seek specialist advice: Consulting with a mortgage broker who specialises in self-employed clients can help you find lenders who may offer more flexible terms.
  3. Enhance financial stability: Strengthening both your personal and business financial health can improve your chances of securing a remortgage, even with a shorter trading history.

What are the pros and cons of remortgaging as self-employed?


Lower interest rates

Potential savings: Remortgaging can allow you to take advantage of lower interest rates, reducing your monthly payments and overall interest costs.

Fixed Rates: You can switch to a fixed-rate mortgage, providing stability and predictability in your repayments.

Access to equity

Release funds: Remortgaging can enable you to release equity tied up in your property, providing funds for home improvements, business investments, or personal expenses.

Debt consolidation: You can consolidate higher-interest debts into a single, more manageable mortgage payment, potentially lowering your overall interest rates.

Flexible mortgage terms

Better terms: You may secure more favourable mortgage terms, such as reduced fees, better repayment schedules, or more flexible overpayment options.

Switch to interest-only: Depending on your financial strategy, switching to an interest-only mortgage might reduce your monthly payments.

Improved financial management

Budgeting: Lower monthly payments and better terms can improve your financial management and cash flow.

Tax efficiency: Accessing equity for business investment may offer potential tax benefits, depending on your specific circumstances.


Strict documentation requirements

Extensive paperwork: The process requires detailed and comprehensive documentation, including certified accounts and extensive financial records, which can be time-consuming to gather and prepare.

Increased scrutiny: Self-employed individuals face higher scrutiny and may need to provide more proof of income stability compared to employed borrowers.

Potential fees and costs

Arrangement fees: Remortgaging can involve various fees, such as arrangement fees, legal fees, valuation fees, and early repayment charges from your existing lender.

Additional costs: These costs can add up, making the remortgage process expensive upfront.

Variable income challenges

Income fluctuations: Self-employed income can be less predictable and more variable, which might complicate the approval process and impact the terms you receive.

Proof of stability: Demonstrating consistent and stable income over the required period is essential but can be challenging if your business experiences seasonal variations.

Risk of higher interest rates

Market conditions: If interest rates have risen since you took out your original mortgage, you might end up with a higher rate, increasing your monthly payments.

Credit score impact: Your current credit score and financial situation can significantly impact the interest rates offered, and any negative changes since your initial mortgage can result in less favourable terms.

Early repayment charges

Existing mortgage penalties: If you remortgage before the end of your current mortgage term, you might incur early repayment charges from your existing lender, which can be substantial and affect the cost-effectiveness of remortgaging.

Equity risks

Decreased property value: If your property’s value decreases, the equity available for release might be lower than expected, affecting your remortgage amount.

Increased LTV: Taking out additional equity could increase your loan-to-value (LTV) ratio, potentially leading to higher interest rates and reduced borrowing capacity.

What are the best mortgage rates for self-employed remortgages?

Finding the best mortgage rates for self-employed remortgages can be challenging due to the variability and complexity involved in verifying self-employed income. However, as of July 2024, there are competitive rates available for those who qualify. Here are some of the current offers:

Fixed-rate mortgages

Two-year fixed rates:

4.99% at 60% LTV

5.00% at 90% LTV with no product fee

Five-year fixed rates:

4.99% at 85% LTV

5.03% at 90% LTV, fixed until 2029, with an APRC of 6.19%

Ten-year fixed Rates:

5.49% at 90% LTV

Tracker rate mortgages

Two-year tracker rates:

4.99% at 60% LTV

5.00% at 90% LTV with a variable rate after the deal period

Five-year tracker rates:

5.64% at 60% LTV

6.25% at 80% LTV

Key considerations

Loan-to-value (LTV) ratio: Rates tend to be more favourable at lower LTV ratios. For instance, the rates for 60% LTV are generally lower compared to those for 90% LTV.

Fees and charges: Pay attention to arrangement fees, valuation fees, and potential early repayment charges. Some deals come with no product fees, which can save you money upfront.

Fixed vs. Tracker rates: Fixed rates offer stability with predictable monthly payments, while tracker rates may be lower initially but can vary with changes in the Bank of England base rate.

Tips to Secure the Best Rates

Maintain accurate financial records: Ensure your income documentation is comprehensive and up-to-date.

Improve your credit score: A higher credit score can help you qualify for better rates.

Consider using a broker: Mortgage brokers can help you navigate the market and find the best deals tailored to self-employed borrowers.

What are some things to consider when comparing remortgage deals as self-employed?

When you’re self-employed and looking to remortgage, there are several additional factors you need to consider beyond the standard comparisons. These factors help ensure you get a deal that not only fits your current financial situation but also accommodates the unique aspects of self-employed income.

Here are some key considerations:

Income documentation requirements

  • Detail and accuracy: Ensure that you have all required documentation ready, including certified accounts, SA302 forms, and tax year overviews. Different lenders have varying documentation requirements, and being well-prepared can streamline the approval process.
  • Professional assistance: Consider working with a qualified accountant who can prepare or review your accounts to ensure they meet lender standards.

Lender flexibility

  • Experience with self-employed borrowers: Look for lenders who have a track record of working with self-employed individuals. These lenders are more likely to understand the nuances of your income and may offer more flexible terms.
  • Criteria variability: Some lenders might be more flexible regarding the length of trading history or types of acceptable income proof. Research and compare these criteria to find the best match.

Interest rate types

  • Fixed vs. variable rates: Decide whether a fixed rate (providing stability and predictable payments) or a variable rate (potentially lower but can fluctuate) is more suitable for your financial planning.
  • Initial rates vs. S=standard variable rates (SVR): Compare the initial rates and consider the SVR after the initial period ends. A significantly higher SVR can increase your monthly payments substantially.

Fees and charges

  • Upfront fees: Look at the arrangement fees, booking fees, and valuation fees associated with the remortgage. These can add up and impact the overall cost.
  • Exit fees and early repayment charges: Check for any fees related to exiting your current mortgage early or overpaying on your new mortgage. These can affect your financial flexibility.

Loan-to-Value (LTV) Ratio

  • Equity in property: The amount of equity you have in your property (LTV ratio) can significantly affect the interest rates offered. Lower LTV ratios often result in better rates.
  • Impact on approval: Higher LTV ratios might require more stringent documentation and higher interest rates. Consider how much equity you can leverage to get favourable terms.

Additional benefits and flexibility

  • Overpayment options: Check if the remortgage deal allows for overpayments without penalties, providing flexibility to pay off your mortgage faster if your income allows.
  • Payment holidays: Some lenders offer the option of payment holidays, which can be useful during periods of lower income or financial uncertainty.

Lender reputation and customer service

  • Reviews and recommendations: Research lender reviews and seek recommendations to understand their reputation, especially regarding customer service and support for self-employed borrowers.
  • Broker assistance: Using a mortgage broker who specialises in self-employed mortgages can provide access to a wider range of products and expert advice tailored to your situation.

Are there any government schemes available to help self-employed people remortgage in the UK?

Currently, there are no specific government schemes exclusively aimed at helping self-employed individuals remortgage their properties in the UK. However, some general government-backed schemes might indirectly benefit self-employed borrowers:

Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme is designed to help increase the availability of high loan-to-value (LTV) mortgages, enabling borrowers to secure a mortgage with just a 5% deposit. This scheme, which is available until 30 June 2025, can be particularly useful for self-employed individuals who might struggle to save a large deposit. By providing a government guarantee on the top portion of the mortgage, it encourages lenders to offer more 95% LTV products.

Shared Ownership and First Homes Schemes

These schemes are designed to help individuals buy a portion of their home and pay rent on the remainder or purchase homes at a discount, respectively. While not directly aimed at remortgaging, they can provide alternative pathways to homeownership and might be relevant if you are considering different financing options.

For self-employed individuals, it is advisable to consult with a mortgage broker who specialises in self-employed mortgages. They can provide tailored advice and help navigate the specific challenges faced by self-employed borrowers in the remortgage market.

Should I use a mortgage broker to remortgage as self-employed in the UK?

Using a mortgage broker can be particularly advantageous for self-employed individuals seeking to remortgage in the UK. Here are several reasons why employing a mortgage broker might be beneficial:

Expertise and knowledge

Mortgage brokers have extensive knowledge of the mortgage market and understand the specific challenges faced by self-employed borrowers. They can guide you through the process, help you prepare the necessary documentation, and provide insights into which lenders are more flexible with self-employed applicants.

Access to a wider range of products

Brokers often have access to a broader range of mortgage products, including those from lenders who do not directly deal with the public. This means they can find deals that you might not be able to access on your own, potentially securing more competitive rates and terms.

Tailored advice

A mortgage broker can offer personalised advice based on your unique financial situation. They can help you understand how your income, trading history and credit score impact your remortgage options and suggest the best strategies to improve your chances of approval.

Time and effort saving

Applying for a mortgage involves a significant amount of paperwork and communication with lenders. A mortgage broker can handle much of this on your behalf, saving you time and reducing the stress associated with the remortgage process.

Negotiation power

Brokers often have established relationships with lenders and can negotiate on your behalf to secure better terms or address any issues that arise during the application process. This can be especially helpful if your financial situation is complex.

Specialist knowledge

Certain brokers specialise in dealing with self-employed clients and understand the intricacies involved, such as dealing with irregular income patterns and the need for detailed financial documentation. Their expertise can be invaluable in presenting your case effectively to lenders.

Case for using a broker

Higher approval chances: Brokers can identify lenders who are more likely to approve your application based on your self-employed status, thus increasing your chances of success.

Cost-effectiveness: While brokers charge a fee for their services, the potential savings from securing a better mortgage deal can outweigh these costs.


How does a lender assess my income for a remortgage if I'm self-employed in the UK?

Lenders typically require two to three years of certified accounts, SA302 forms, and tax year overviews from HMRC. They may also ask for recent bank statements to verify income deposits. The aim is to ensure a consistent and reliable income history to assess your ability to make mortgage repayments.

I'm a newly self-employed person in the UK. Can I still remortgage my house?

It can be challenging to remortgage if you have less than two years of trading history. However, some lenders might consider your application if you have a strong financial background, substantial savings, or if your business shows significant profitability. Consulting a mortgage broker can help find more flexible lenders.

I'm coming off a fixed-rate mortgage deal as self-employed in the UK. What are my options?

As your fixed-rate deal ends, you can switch to another fixed-rate deal, move to a variable-rate mortgage, or consider tracker mortgages. Evaluating current market rates and consulting with a mortgage broker can help you find the best option tailored to your financial situation.

I want to release equity from my property through remortgaging as self-employed in the UK. Is this possible?

Yes, it is possible to release equity from your property through remortgaging. This involves taking out a new mortgage for a larger amount than your current mortgage and using the extra funds for other financial needs. Ensure your financial records are well-prepared to facilitate the process.

I have a bad credit score as self-employed. Can I still remortgage in the UK?

It is more challenging to remortgage with a bad credit score, but it is not impossible. Some lenders specialise in bad credit mortgages, though you may face higher interest rates and stricter terms. Improving your credit score and consulting with a mortgage broker can enhance your chances of approval.

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