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Mortgages for Self-Employed Applications Using Last Year's Income

If your self-employed income has changed substantially over the last year, can you use that income as your annual average earnings to improve the maximum mortgage you qualify for?

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-06-15
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Mortgages for Self-Employed Applications Using Last Year's Income

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.

Help with Self-Employment Mortgages Using Last Year's Profits

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.

Business finance broker works with a network of forward-thinking lenders who apply flexibility to their lending policies. As such, they 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 [email protected].

AboutAbout your mortgage
Single or joint mortgage?
What’s your yearly income?

Error: Yearly income income must be between £1 and £10,000,000.

Do you receive a regular bonus?

Error: Regular bonus must be between £1 and £10,000,000.

about your mortgage

Based on your yearly income,
you may be able to borrow


Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.


Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.


Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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How Can I Get a Mortgage With 1 Year Self-Employment Income History?

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 to help you navigate the minefield of choosing the right lender and negotiating the most favourable rates.

How Many Years Trading Do I Need to Get a Self-Employment 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 consider previous years, with this bringing down the average income calculation and limiting how much you can borrow.

The Revolution Brokers 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 Self-Employed Trading?

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 Lenders Calculate an Offer For a Mortgage With 1 Year Self-Employment Income?

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

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 vary 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.

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

How Much Can I Borrow on a 1 Year Self-Employed Mortgage?

As we've discovered, getting a mortgage when self-employed requires an income assessment. Lenders will usually work out an average annual income and make an offer based on that.

In the below table, we've shown indicative examples 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 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.

Can I Get a Joint Mortgage One Self-Employed Applicant?

Suppose you're looking to buy a house with somebody else. In that case, you'll generally be able to borrow more on a mortgage because the lender will consider two incomes in their maximum lending calculations.

However, things can be a little trickier if you need a joint mortgage with one self-employed person and the other in PAYE employment.

The process works pretty much the same as for any other self-employed mortgage. The lender will usually look at:

  • An average of what you earn per year.
  • How much the other person makes through their salary.
  • Other debts and credit facilities.
  • Your ages and any property risk factors.

If you've been trading for one year or want to base your mortgage application on the profits from last year (perhaps you've seen a massive uptick in trade!), it's important to use an experienced self-employment mortgage broker to navigate the borrowing market.

While some lenders are very strict and won't lend to any self-employed mortgage applicants with under three years of filed accounts, others will help.

The key is to apply to a mortgage lender with specific experience lending to self-employed applicants willing to base their lending offer on your income from the most recent trading period.

You can apply for a mortgage with up to four people, usually as a maximum. The lender will need to run through the same income assessment and affordability calculations for each applicant.

Expert Support With 1 Year Self-Employed Mortgages

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.

We can match your application with the most appropriate self-employed mortgage providers when you have a limited trading history. Our self-employment mortgage experts can also assist if you want your mortgage limit based on your income from the previous 12 months (instead of an average over the last few years).

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

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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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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