Self-Employed Mortgage Calculator

How lenders work out self-employed income

Lenders don’t all read self-employed income the same way, and the method they use can change what you could borrow by tens of thousands of pounds. Pick how you work at the top of the calculator and it shows each method that applies to you. Most lenders lend between 4.75 and 5.5 times income, and 5 to 6 times for incomes over £100,000, depending on your loan to value, credit history and outgoings.

Sole traders, freelancers and partners

Lenders use your net profit from your tax calculations (SA302s). If your latest year is lower than the year before, they use the latest year. If it’s higher, most take the average of the two. Some lenders will use a higher latest year on its own, with an explanation of why it’s up. With only one year of figures, a limited number of lenders can still help. More on one year’s accounts.

Limited company directors

Own 20% or more of your company and lenders treat you as self-employed; under 20%, many treat you as employed. Most add your salary and dividends, averaged over two years. Others use your salary plus your share of the company’s net profit, usually after corporation tax, which can mean borrowing a lot more if you leave money in the business. More on company director mortgages.

Contractors

On a day rate, many lenders use day rate × 5 days × 46 weeks rather than your accounts, which often means borrowing far more. Paid monthly through PAYE or an umbrella company, you can be treated like an employee. More on contractor mortgages.

CIS subcontractors

Lenders can use your CIS earnings from the last 12 months, or your gross pay from the last 3 months, less anything paid for materials. They usually use all of it, without needing your tax returns. Others go by the net profit on your SA302s, like a sole trader. More on CIS mortgages.

Other income

A job alongside your business, a pension, benefits, maintenance or rental income can be added under Other income. Lenders treat each differently: some use all of it, some only part, and some don’t count certain types.

What these figures don’t include

The results are illustrations. Each lender has its own multiples and rules, and what you can borrow also depends on your outgoings, credit history, deposit and the property. For a figure based on your own circumstances, request a quote or call us on 01202 733 809.