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Mortgages for Self-Employed Applications Using Last Years Income

Mortgages for Self-Employed Applications Using Last Years Income

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The number of self-employed people in the UK has rocketed, with millions choosing to start up their own businesses, work freelance, and explore new ventures in the years since the credit crunch.

With this change in the working climate, the mortgage sector has likewise had to evolve, and you can now find much more flexibility to secure mortgage lending as a self-employed person or sole trader.

In almost every sector, contractors and freelancer workers have increased; some of the most common applicants we work with are self-employed as:

  • Tradespeople or craftspeople
  • Professionals or financial services providers
  • Creative professionals

One of the most significant complications is for self-employed people who have recently started a business, with the challenge of proving affordability with only one year of trading history.

Similarly, owners of self-employed businesses that have grown significantly in the last year might find it difficult to secure lending based on that income, rather than against the average earnings over the previous three years.

Revolution Finance Brokers works with a network of forward-thinking lenders who apply flexibility to their lending policies, and as such can offer much more generous lending terms than those available through the high street.

Here we will explain some of the essential factors to applying for a self-employed mortgage after one year of trading; if you would like any more advice, support, or information, please contact our team on 0330 304 3040 or send a message to

How to secure a self-employed mortgage based on income from the last 12 months

If you are self-employed and your income has grown, you might be looking to take out a mortgage, and invest those earnings in a property.

Mortgage lenders will want to look at your trading history and use an average income calculation to decide how much they can lend you.

The best possible route is to work with an experienced self-employment broker, who can help you navigate the minefield of choosing the right lender, and negotiating the most favourable rates.

Do I need a minimum number of years trading to get a self-employed mortgage?

Most mainstream lenders look for two to three years of trading history, which they use in their average income calculations.

This process can be complicated for self-employed people whose income has grown, since most lenders will still take into account previous years, with this bringing down the average income calculation and therefore limiting how much you can borrow.

The Revolution team does work with specialist lenders who are happy to consider your more recent earnings in their primary calculations, depending on the circumstances.

How easy is it to get a mortgage after one year of being self-employed?

If you have been trading for a year, you will have a smaller number of mortgage lenders to choose between - the majority of mainstream lenders will need to see three years worth of trading. Hence this being a niche product.

The Revolution Guide to securing a mortgage after one year's trade provides more information.

How do mortgage lenders calculate self-employed income?

The most significant difference between a standard mortgage and one for a self-employed applicant is in the income calculations.

If you fall into one of the below circumstances, the income multiples that lenders use to decide the maximum they can lend are likely to be the same as for a full time employed person:

  • Self-employed for three years or more
  • Earn an established income from a sole trader business
  • Receive a limited company salary and dividends

If you have been trading for under three years, or have a complex income structure including bonuses and commissions, the calculation can be more variable depending on the lender.

Some mortgage providers might only consider part of your income declarable for the income calculations, and this can have a massive impact on the amount you can borrow.

As an illustration, here is an example of what you might be able to borrow based on your earnings history:

Trading year

Total net profit or salary income and dividends







If you approached three different lenders, all of whom offer a maximum mortgage of four times your annual salary, the way they calculate your average income will mean each lender might offer a very different value.

These examples assume that you have no other outgoings, and your net profit or salary income is your total earnings.

Mortgage provider

Earnings calculation basis

Maximum mortgage offer


Average of the last three year's income



Average of the previous two year's income



Based only on your earnings in the most recent year


This variance demonstrates why it is so crucial to work with an experienced broker, who knows how much you'd like to borrow, and how the lending calculations work with each lender.

Revolution Brokers are experts in specialist and self-employed mortgages and can negotiate the most favourable rates and terms to secure the lending you need.

Contact our team via email at or give us a call on 0330 304 3040.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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