Edinburgh · Scotland · UK-wide
There is no such thing as a self-employed mortgage product. You apply for the same mortgages as everyone else — the difference is entirely in how a lender calculates your income, and lenders differ enormously. A sole trader is usually assessed on net profit, a company director on salary plus dividends, though a growing number of lenders will use salary plus retained profit instead, which can double the figure. A day-rate contractor can often be assessed on the day rate times five times 46 weeks rather than on accounts at all. Prime Mortgages knows which lender does which, and that knowledge is usually worth far more than the rate difference.
The right-hand column is not a trick. These are mainstream lenders applying their published criteria — they simply are not the lender whose branch you happen to bank with.
| Your situation | Common approach | The better approach |
|---|---|---|
| Sole trader / partnership | Average of last two years' net profit | Latest year only, if it is the higher |
| Company director | Salary plus dividends drawn | Salary plus share of retained net profit |
| Day-rate contractor | Two years' accounts | Day rate × 5 × 46 weeks, from the contract |
| Recently self-employed | Declined under two years | Several lenders accept one full year |
| Multiple income sources | Main income only | Lenders that aggregate employed, self-employed and rental income |
Take a company director paying themselves £12,570 in salary and £30,000 in dividends, leaving £60,000 of net profit in the company for tax efficiency.
A lender using salary plus dividends sees £42,570 and will offer roughly £191,000 at 4.5 times income. A lender using salary plus share of net profit sees £72,570 and will offer roughly £326,000 on the same multiple.
Same person, same accounts, same year — a difference of £135,000 in borrowing based purely on which lender's calculator is used. This example is illustrative; your actual figures depend on your accounts and the lender's assessment.
No fee for the initial conversation, and no obligation. We usually reply the same working day.
Common questions
Yes. Several mainstream lenders will consider one full year of self-employed accounts, usually with an accountant's reference and sometimes a projection for the current year. You may need a slightly larger deposit, but you will not automatically be pushed to a specialist rate.
Most use salary plus dividends actually drawn. A meaningful minority use salary plus your share of the company's retained net profit, which is usually much higher if you leave profit in the business for tax efficiency. Which lender you apply to can change your borrowing by six figures on identical accounts.
The same multiples as anyone else — typically 4 to 4.5 times income, with some lenders going to 5 or 5.5 times for higher earners. The entire difficulty is agreeing what your income is, not the multiple applied to it.
Yes. A number of lenders assess contractors on the contract itself, calculating annualised income as day rate × 5 days × 46 weeks. Many will accept as little as six to twelve months of contracting history, and some accept a first contract if you have relevant employed experience in the same field.
No, though it opens up more of the market. One full year of accounts is workable with several lenders. Under one year is very difficult on a residential mortgage, though there are options if you previously worked in the same field as an employee.
It can, considerably, if you apply to a lender that only counts salary and dividends drawn. It matters much less with a lender that uses retained profit. This is worth planning a year or two ahead of a purchase — speak to us before your accountant finalises the year end.
A twenty-minute conversation will tell you what you can realistically borrow, what it will cost and whether it is worth doing. It is free, and we will tell you honestly if the answer is no.