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Self-employed and company director mortgages: how lenders work out your income
Yes, you can get a mortgage if you're self-employed or a company director. Lenders offer the same range of mortgages, but they work out your income from your tax calculations or company accounts instead of payslips. How they read those figures can make a big difference to how much you can borrow.
Lender criteria vary and change often. This guide explains the usual approaches, not the rules of any one lender.
Accounts needed
Usually 2 years
Some lenders will consider one full year, assessed case by case.
Key evidence
SA302s
HMRC tax calculations with matching tax year overviews, or company accounts.
Treated as self-employed
20–25%+
The shareholding at which many lenders stop treating a director as an employee.
Rising or falling income
Lower figure
Many lenders use the latest year or the two-year average, whichever is lower.
How lenders work out self-employed income
An employee's income is easy to check: a payslip and a P60. When you work for yourself, a lender has to decide which figure represents your income, and different lenders choose different figures. That's why one lender may offer far more than another on the same accounts.
The figure they use mainly depends on how your business is set up.
| How you trade | Income lenders usually use | Main evidence |
|---|---|---|
| Sole trader | Your net profit (turnover minus business expenses) | SA302s and tax year overviews, or accounts |
| Partnership or LLP | Your share of the partnership's net profit | SA302s, tax year overviews and partnership accounts |
| Limited company director (larger shareholding) | Salary plus dividends, or with some lenders salary plus your share of the company's net profit | SA302s and tax year overviews, company accounts or an accountant's certificate |
| Director with a small shareholding | Often treated as employed, so usually your salary | Payslips and P60 |
| Contractor or CIS worker | Sometimes a day rate or contract value instead of accounts | Contracts, invoices or CIS statements |
If you work on contracts, our guide to contractor and CIS mortgages covers the day-rate route in more detail.
Company director mortgages: dividends or net profit?
This is the question that matters most for limited company directors. Many directors pay themselves a modest salary and some dividends, and leave the rest of the profit in the company. Lenders take one of two approaches.
Salary plus dividends
The most common approach
The lender adds up what you actually took out of the company, usually from your SA302s. Profit left in the business doesn't count.
Salary plus share of net profit
Offered by some lenders
The lender uses your salary plus your share of the company's profit, whether or not you drew it. Lenders that do this generally use profit after corporation tax, scaled to your shareholding. Some only offer it for larger loans or when you and your co-applicant own most of the company.
If you retain profit in your company, the net profit approach can mean a noticeably higher income figure, and so potentially a larger mortgage.
Same director, two income figures
Illustrative example: a sole shareholder with a £12,000 salary, £30,000 of dividends and £60,000 of profit after corporation tax
When is a director "self-employed" to a lender?
Lenders set a shareholding threshold. Below it, a director is usually treated like an employee and assessed on salary. At or above it, you're treated as self-employed. The threshold is often 20% or 25%, though some lenders set it higher. A lender may also treat you as self-employed if you need dividends counted, whatever your shareholding.
We are not tax advisers and this is not tax advice. Our description of corporation tax and company profits is a general summary based on the rules published at the time of writing, and we make no warranty about the tax you will pay. Speak to a qualified tax adviser or accountant about your own circumstances.
How many years' accounts do you need for a mortgage?
Most lenders want two years of self-employed income, with the latest accounts or tax calculation no more than about 18 months old. You don't always need two years, though.
- Two years or more: accepted by most mainstream lenders.
- One full year: some mainstream and specialist lenders will consider it, usually with an underwriter looking at your previous work, experience in the same field and the business's prospects.
- Less than a year: options are limited. A few lenders may look at it if you've moved from employment to self-employment in the same line of work, or taken over an existing business, but expect closer scrutiny and a smaller choice of deals.
If you're close to finishing your first or second year, waiting until your accounts are final and your tax return is filed can open up more lenders.
Documents checklist
- SA302s
- HMRC tax calculations for your last two years, printed from your HMRC account or accounting software
- Tax year overviews
- From your HMRC account, to confirm the SA302 figures and that the tax has been paid
- Company accounts
- Finalised, not draft, for limited companies and partnerships where the lender asks
- Accountant's certificate
- Some lenders accept a certificate or reference from a qualified accountant instead of SA302s
- Bank statements
- Often three months of personal and business statements
- ID and deposit
- Photo ID, proof of address and proof of where your deposit came from
Where a lender relies on your accountant, they usually expect a professionally qualified accountant, such as a member of ICAEW, ACCA or CIMA. You can print SA302s and tax year overviews 72 hours after filing your return.
Rising or falling income: average or latest year?
Many lenders use the lower of your latest year's income or the average of your last two years. Some will use the latest year alone when it's higher, and for some loans the lender's rules depend on the loan size or deposit. This simple example shows why the approach matters.
| Year 1 | Year 2 (latest) | Two-year average | Lower of latest or average | |
|---|---|---|---|---|
| Rising income | £40,000 | £50,000 | £45,000 | £45,000 |
| Falling income | £50,000 | £40,000 | £45,000 | £40,000 |
If your profits are rising, a lender that uses the latest year could let you borrow more. If they're falling, most lenders will want to understand why, and a letter from your accountant explaining a one-off dip can help.
Retained profits, one-off income and losses
- Retained profits only count with lenders that use net profit. With salary-plus-dividends lenders, they're ignored.
- One-off income, such as selling an asset, may be stripped out by the underwriter.
- A loss or a sharp fall in either of the last two years narrows your options, as some lenders won't accept it at all.
Tax planning versus borrowing power
Directors often draw a low salary and limited dividends to keep their personal tax bill down. That's a legitimate decision, but it also lowers the income that most lenders can see. If you're planning to buy or remortgage in the next year or two, talk to your accountant and a mortgage adviser together, before your accounts are drawn up, so you understand the trade-off.
We are not tax advisers and this is not tax advice. Our comments on salary, dividends and personal tax are a general summary based on the rules published at the time of writing, and we make no warranty about the tax you will pay. Speak to a qualified tax adviser or accountant about your own circumstances.
How to improve your chances
- File earlySubmit your tax return and finalise accounts promptly, so your latest year is available to lenders.
- Keep business and personal separateClean, separate bank accounts make statements easier for an underwriter to follow.
- Check your credit fileClear up errors and keep credit use steady in the months before applying.
- Match the lender to your incomeChoosing between dividend and net profit lenders, or latest year and average, is where advice helps most.
It also helps to understand what an underwriter will ask. Our article on what mortgage underwriters look for explains the checks.
Other situations for business owners
Buy-to-let through a limited company
Assessed differently
Lenders mainly look at the rent the property will earn, and usually want personal guarantees from directors. See our buy-to-let mortgage service.
Buying premises for your business
A commercial mortgage
If you want to buy the building your business trades from, that's a commercial mortgage rather than a residential one.
Complex or recent income
Specialist lenders
One year's accounts, a recent fall in profits or credit problems can still be workable with specialist lenders, often at higher rates.
Most buy-to-let mortgages for limited companies and most commercial mortgages are not regulated by the Financial Conduct Authority.
If your household relies on your business income, it's also worth thinking about how you'd keep up repayments if you couldn't work. Our income protection page explains how cover works.
Self-employed mortgage FAQs
Can I get a mortgage with one year's accounts?
Yes, with some lenders. You'll usually need a full year's trading shown on an SA302 or finalised accounts, and the lender will look closely at your experience and previous income. Choice is narrower than with two years.
What is an SA302 and do mortgage lenders need one?
An SA302 is HMRC's calculation of your income and tax for a year, based on your Self Assessment return. Most lenders ask for two years of SA302s with matching tax year overviews, although some accept an accountant's certificate instead.
Can a company director use net profit for a mortgage?
Some lenders will use your salary plus your share of the company's net profit after corporation tax. Others only count salary and dividends. Which is better depends on how much profit you leave in the company.
Are self-employed mortgage rates higher?
Not usually. If you meet a mainstream lender's criteria, you can access the same deals as employed borrowers. Rates may be higher with specialist lenders. See our latest mortgage rates update.
Do I need a specialist broker for a director mortgage?
You don't have to use one, but lenders' rules for directors differ widely, and applying to the wrong one can mean a lower offer or a decline. A broker who knows the criteria can match your accounts to the right lender first time.
How we can help
Quick Mortgages is a whole-of-market broker, not tied to any lender. We work with a panel of more than 110 lenders, including specialist lenders, and regularly help sole traders, partners and limited company directors find the lender whose income rules suit their accounts.
Our advice is fee-free, because we're paid by the lender. We're based in Birmingham and help clients across the UK with buying a home and remortgaging.
Sources
- GOV.UK, Get your SA302 tax calculation (SA302s and tax year overviews available for the last four years, 72 hours after filing)
- GOV.UK, Corporation Tax rates and reliefs
- Nationwide for Intermediaries, Self-employment income criteria (two years usual, some one-year cases, lower of latest or average, 20% shareholding)
- Virgin Money for Intermediaries, Self-employed lending criteria (share of net profit after tax plus salary for 20%+ shareholders)
- Halifax Intermediaries, lending criteria and self-employed calculation update (25% shareholding, one-year trading considered individually)
- Barclays Intermediaries, Self-employed criteria (company profit after tax for larger loans)
- Principality Building Society, Self-employed lending criteria (qualified accountant requirements)
Correct on 17 September 2026 and may change.
Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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