Self-Employed Mortgages: How Is My Income Assessed?
Getting a mortgage when you’re self-employed can feel more complex, but with the right guidance, it doesn’t have to be. Here’s how lenders typically assess your income.
1. You’ll Need a Track Record
Most lenders want at least 2 years of self-employed income, though some will consider just 1 year with a strong profile. This applies whether you’re:
A sole trader
A limited company director
A contractor or freelancer
2. Sole Traders: Net Profit Is Key
If you’re a sole trader or in a partnership, lenders look at:
Your net profit (after expenses, before tax)
Usually the average of the last 2 years, or the latest if it’s stable or rising
3a. Limited Company Directors: Salary + Dividends
If you pay yourself a salary and dividends:
Lenders will add your salary and dividends together to calculate your income
This is usually based on your SA302s or tax calculations
Most lenders will average the last 2 years, though some use the latest if income has increased
3b. Limited Company Directors: Salary + Net Profits
Some lenders will use:
Your salary plus net profit from the company accounts
This may be profit before or after tax, depending on the lender
This can be helpful if you leave money in the business instead of drawing large dividends
4. Contractors: Day Rate Can Be Used
If you work on short-term contracts (e.g. IT, construction, consultancy):
Some lenders will assess income based on your day rate x number of working days
A history of contracting in the same field helps strengthen your case
5. Consistency and Trends Matter
Lenders like to see stable or growing income. If your income has dropped recently, you’ll need to explain why; especially if it’s a one-off.
Self-employed doesn’t mean second-best
We work with specialist lenders who understand how self-employed income works — including retained profits, contractor structures, and tax-efficient setups.
Speak to MSP today for clear, tailored advice on what you could borrow and how to get approved.