UK Mortgages for Freelancers and Self-employed Business people

Detailed advice for freelancers and self-employed business owners looking for great mortgage products - but without the affordability benefits of permanent contracted PAYE employment.

About your mortgage

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

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

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

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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.

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

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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.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

UK Mortgages for Freelancers and Self-employed Business people

The freelance and self-employed sectors have grown substantially in the past few years, with around 15% of people working for themselves.

With all the benefits this brings, one of the downsides is that many mortgage lenders have different policies for considering self-employed applicants.

One of the most significant issues is that freelancers have variable income and little reliance on a regular salary, making the affordability calculation a bit more complicated.

However, there are many mortgage products out there, and lenders are increasingly happy to cater to self-employed applicants. For information about the most competitive rates on the market, contact Revolution Brokers on 0330 304 3040, or send us a message to info@revolutionbrokers.co.uk.

How Can I Get a Mortgage as a Freelancer?

You can definitely get a mortgage, but an independent broker is almost certainly your best bet. Unlike mortgages for employed people, you won't find comparison tables or indicative rates since this depends very much on your work and the lender you apply to.

Revolution Brokers is a whole-of-market, wholly independent team working with lenders throughout the UK.

Get in touch if you are struggling to find a mortgage as a freelancer or want to ensure you're not paying over the odds.

Why is it Difficult to Get a Mortgage If I Am Self-Employed?

The key is in the lender criteria, as many will want to see a three-year history of accounts and tax returns and require a sizable deposit.

  • Lenders prefer PAYE employment with fixed, stable income. Freelancers tend to have variable income, which makes this more complex.
  • Income can change significantly depending on whether you are filing self-employed tax returns or have this deducted at source.
  • Most brokers do not have expertise in freelancer mortgages. Therefore, they can't direct your application to the right lender and won't be able to create your application to ensure it is approved.

As self-employment specialists, the Revolution team can help you navigate the mortgage market and find niche lenders with freelance mortgages experience.

Do I Need a Minimum Amount of Work Experience to Get a Freelancer Mortgage?

You don't, although most generic lenders will need to see three years worth of accounts.

Other more niche mortgage providers are happy with one or two years of trading history, and some will accept as little as six months worth of records.

The rules are relatively similar regardless of whether you work as a sole trader, are a director or a limited business, or are a partnership member.

However, the calculations can vary, considering different parts of your income stream.

  • Sole traders are usually assessed on their net profit.
  • Limited company directors are usually assessed on their salary and dividends or the company's net profits
  • The lender will usually ask for sets of accounts, preferably prepared by an accredited accountant, or for copies of your tax returns.

Can I Get a Self-Employed Mortgage on a Fixed-Term Contract?

If you have a fixed-term contract with over six months remaining or that has already been renewed at least once, you are more likely to be approved for a mortgage.

Lenders will also consider:

  • How long you have been in your profession.
  • How much you earn per year.
  • How stable your income is, and how much it varies by.

How Much Can I Borrow on a Freelancer Mortgage?

Lenders will usually analyse your income to calculate a maximum they will lend.

  • Sole traders are assessed on their net profits, usually averaged over the last three years. Some will use just the profit from the previous year if your trade has increased.
  • Limited company directors are usually assessed on their salary and dividends to arrive at a mortgage maximum. Other lenders will include your share of profits retained in the business.
  • Contractors are assessed on their day rate. The day rate is multiplied by five days per week and around 46 to 48 weeks per year to arrive at an estimate of your average annual income.
  • Employed workers are assessed on their salary, plus additional income, with bonuses and commissions being included often at a fixed percentage of the average value.

Once your annual income has been established, the lender will apply their affordability policy to decide on the maximum they can lend.

Most lenders will offer up to around 4.5 or five times your annual income. For example, the below table shows how much you could borrow, on a £46,000 average yearly pay, depending on the multiplier the lender uses.

Multiplication factor

Maximum mortgage

Four x annual income

£184,000

Five x annual income

£230,000

Six x annual income

£276,000

Can I Get a Buy to Let Mortgage as a Freelancer?

You can, and you'll usually need to earn a minimum amount. This is £15,000 a year for some lenders, and others might have a cap of £25,000 or above.

The critical assessment criteria are the anticipated rental income rather than your income. Provided the property will generate sufficient rent to comfortably cover the mortgage payments, you will usually find a competitive mortgage.

Is It Possible to Get a Freelancer Mortgage with Bad Credit?

A lot depends on what sort of bad credit issues you have had, when they occurred, and whether you have since repaid the debt.

Any adverse credit issues in the last six years will show on your credit file, and lenders will overlook most minor matters but might reject applicants with serious credit arrears.

There are specialist bad credit lenders who can offer freelancer mortgages in most scenarios, so get in touch if you're concerned about mortgage eligibility owing to credit problems.

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

In most cases, yes, although some lenders will disregard the self-employed applicant's income for their affordability calculations.

Lenders experienced in freelancer lending will be more flexible and will include both incomes in their assessment.

Expert Advice on UK Freelance Mortgages

As an independent and whole-of-market mortgage broker, the Revolution Brokers team works with thousands of self-employed business people and freelancers who have struggled to find competitive mortgage lending through high street mortgage providers.

Give us a call on 0330 304 3040 or drop a message to info@revolutionbrokers.co.uk to find the best deals currently on the market, whatever your line of work.

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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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