Self-Employed Mortgage First-Time Buyer
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Self-Employed Mortgage First-Time Buyer (Part 1)
Can you get a mortgage if you are a self-employed first-time buyer?
Yes, you can.
How does getting a mortgage as someone who is self-employed and a first-time buyer work? Is it difficult?
I wouldn’t say it’s difficult to get a mortgage as a self-employed first-time buyer. However, it can require a little bit more planning and strategy than for someone who is employed. My suggestion is to be prepared and ready for the mortgage before you look for a property.
I’d recommend seeking independent advice, even if you aren’t quite ready yet or don’t have a full year’s accounts yet.
How many years do you have to be self-employed to get a mortgage as a first-time buyer?
The majority of lenders require two years’ accounts; however, some will accept one year, including some lenders from the high street.
What types of mortgages are available for first-time buyers who are self-employed?
There’s no difference between a first-time buyer who’s employed and a first-time buyer who’s self-employed in terms of mortgages available – they’re the same products.
It’s possible to get a mortgage with a small deposit, and it’s possible to borrow up to six times your joint income, or possibly even higher. Being self-employed and a first-time buyer is nothing to fear.
It’s just best to get going and planning as soon as you’re even considering a potential purchase.
How much deposit will I need for a mortgage if I’m a first-time buyer and self-employed?
Most lenders require a minimum of 5% deposit. You might even be able to put down a minimum of £5,000 with one lender, as we speak today in December 2025.
But there is always more flexibility in the criteria if you can achieve a larger deposit. A milestone both for products and flexible criteria is 15%.
How much can I borrow for a mortgage if I’m self-employed and a first-time buyer?
It varies for each individual’s circumstances. Every lender has to carry out an affordability assessment, and deposit amounts can influence the criteria and also the maximum borrowing.
Some lenders will consider up to six times joint income, which is pretty generous.
How is a mortgage calculated for a self-employed first-time buyer in the UK?
If you’re a sole trader, lenders will use net profit before tax. If you’re an owner or partial owner of a limited company, most lenders use your salary from the business plus the dividend income.
Some, however, will use the net profit of the business plus the director’s salary. Being independent, we can pick and choose the criteria that suit the individual circumstance best.
That’s where specialist knowledge helps.
What documents do I need to apply for a mortgage as a self-employed first-time buyer? How do I prove my income?
As a sole trader, the most common ask from a lender is the latest two years’ tax returns, although some will accept one year’s tax return if two years aren’t available.
For a limited company owner, we often select the lender based on the documents requested. Some lenders will go for an accountant’s certificate, others will want to see the accounts, while others will ask for tax returns instead.
There’s a bit of flexibility there, but they will always ask for proof of income.
How do lenders calculate my income as a self-employed first-time buyer?
Most lenders work off a two-year average, not the latest year’s figures, unless the latest year’s figures have dropped.
We have access to many lenders that just work off the latest year’s figures or accounts for first-time buyers, if that’s what’s required to achieve your objectives.
How can I improve my chances of getting a mortgage as a self-employed first-time buyer?
Seek advice early. Your circumstances may require some planning to achieve your objectives. Maybe you need to do your latest year’s accounts if the accounting period’s already passed.
We could talk about what your figures need to be to achieve your plans – so you can focus on revenues for the current trading year.
Personally, I love working with self-employed clients and helping them plan to achieve their goal of home ownership. Of course, some people are ready to go from the off, but it’s common to put a plan in place for a self-employed client. They may not be moving till next year, and we’re happy to put that plan in place.
How do I apply for a mortgage as a self-employed first-time buyer, and how can a mortgage broker help?
A good mortgage broker will take care of everything, including applying for the mortgage.
The first step is to simply chat with us about your objectives and circumstances. We then research the market for the right solution. We’re happy to help, and it’s normal for us to provide the confidence someone needs to be able to buy their first home. We guide you all the way through to getting your door keys.
Key Takeaways:
- Self-employed first-time buyers can get a mortgage, but it requires more planning and strategy than for employed buyers. It is highly recommended to seek independent advice early, even if you are not yet ready or do not have a full year’s accounts.
- The majority of lenders require two years’ self-employed accounts; however, some, including those from the high street, will accept just one year.
- Most lenders require a minimum of a 5% deposit. A 15% deposit is considered a significant milestone for accessing better products and more flexible lending criteria. Borrowing can be up to six times your joint income.
- Lenders calculate income differently based on the business structure: for sole traders, they use net profit before tax; for limited company owners, most use the director’s salary plus dividend income, while some use net profit plus the director’s salary. Lenders commonly work off a two-year average unless the latest year’s figures have dropped, though some will use just the latest year.
- A good mortgage broker can help improve your chances by providing early advice and planning, as well as taking care of the entire application process.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
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We will save you time by researching the market, checking that you meet the lenders criteria to find the best mortgage for your circumstance.
Self-Employed Mortgage First-Time Buyer (Part 2)
Is there any flexibility in the repayment terms for self-employed individuals who are first-time buyers?
Yes, there is. If age is on your side, you could take a mortgage term of up to 40 years to keep the monthly payments lower. Also, if you’re using a large deposit, interest-only may also be an option. There are options to jiggle around with the repayment terms.
What additional fees or costs should I be aware of if I’m a first-time buyer and self-employed?
There are plenty of costs to consider when you’re purchasing a home. They aren’t exclusively for First Time Buyers or someone that’s self-employed, but they include stamp duty, product fees with lenders, broker fees, solicitors’ fees and potentially survey costs.
There are no additional costs just for being self-employed, and as a first-time buyer, your costs are actually lower – for example, on stamp duty, there are incentives that can save you up to £5,000.
Some lenders have incentives such as £500 cashback exclusively for first-time buyers. For every first-time buyer who’s looking to purchase, we always provide all the costs involved and talk you through the home-buying process. We then provide a tailored, single-page report for your records.
Will I need a guarantor to get a mortgage because I’m self-employed?
It isn’t usually necessary, but it’s possible if required. Being self-employed and securing a mortgage seems to have the stigma of being difficult, but in my opinion, it isn’t. It just needs a little more thought and planning.
It’s best to chat with an expert very early on – to get your ducks in a row and feel confident with your purchase, even if that’s a year in advance of when you’re planning to buy, or longer.
We don’t charge any fees until a client has had an offer accepted to purchase a property, so it makes sense to start planning early.
Are there any government schemes available to help self-employed first-time buyers?
Yes. At the time of us speaking in February 2026, there are savings vehicles to help first-time buyers with a deposit.
The government boosts your savings by 25% via the Help to Buy ISA and Lifetime ISA, also known as a LISA. As an example, if you saved £4,000, a 25% boost would add £1,000 to your pot, taking it to £5,000 at the point you purchase a property.
There’s also currently a First Time Buyer stamp duty incentive that can save you up to £5,000. Options like shared ownership could also be considered.
What if I have bad credit as a self-employed first-time buyer?
Bad credit can impact your options, but being self-employed and a first-time buyer won’t have so much of an effect. With bad credit, my advice is to be transparent with your advisor, ideally providing a copy of your credit report. With a credit report, we know what we’re working with, so we can provide reliable advice.
Don’t imagine you can’t get a mortgage as a first-time buyer who is self-employed with bad credit. You just need to find out how to do this with an expert on your side. Sometimes it’s the case that you can’t buy a home right now, but you’ll be able to in a year’s time. Just go into it with a positive mindset.
I’m self-employed. Can I use profits or dividends as income for the mortgage application?
If you’re a sole trader or in a partnership, it’s going to be the profit. But if you’re an owner of a limited company, every lender will use your director’s salary, and we can choose a lender that suits your circumstances.
For some, this will be using the director’s salary together with the dividends, while for others, it’s the director’s salary with profits. A good advisor will place you with the right lender to meet your objectives and goals.
What impact does my business structure have on my mortgage application as a first-time buyer? Are there specific requirements for different business structures?
For a sole trader or partnership, lenders use the profits and will ask for at least one year’s tax return to evidence that. The documents they require are called tax calculations and tax year overviews. These follow the submission of your tax return and are available from your accountant or the HMRC gateway.
For a limited company, the documents requested differ depending on how we want to use your income. It could be an accountant’s reference, the company accounts or the tax calculations and tax year overviews.
A good advisor will ask you questions and collate the right information to find a mortgage that works for your circumstances. For example, if it’s best to work on an accountant’s reference using your director’s salary and profits, we find a lender to do that.
Can business funds be used for the down payment on a mortgage for a self-employed first-time buyer?
Yes, they can if it is taken as dividends. Lenders for first-time buyers won’t accept directors’ loans for a deposit.
What if I’ve been previously declined for a self-employed mortgage and I’m a first-time buyer? What happens next?
I don’t like to knock our industry, but there does seem to be a massive skill shortage when it comes to self-employed clients. It’s extremely plausible that you’ve spoken to an advisor, either one with your bank or a broker, who doesn’t have the experience required or doesn’t understand how to read accounts.
This is why there’s a stigma that self-employment makes it difficult to get a mortgage. But I disagree – you just need to be talking to the right advisor who understands accounts and lenders’ criteria. My advice is to try again – we’re here to help.
How can a mortgage broker help here? Anything else to add?
An experienced advisor can make the difference between achieving your objective and failing to. It’s important to have a mortgage broker who’s experienced on your side. We’re extremely focused on a client’s objectives. After all, that’s what it’s all about.
Key Takeaways:
- Self-employed first-time buyers can potentially take a mortgage term of up to 40 years to lower monthly payments, and interest-only options may be available if a large deposit is used.
- There are no extra costs specifically for being self-employed; in fact, first-time buyers benefit from lower costs, including a stamp duty incentive that can save up to £5,000. Some lenders also offer incentives like £500 cashback exclusively for first-time buyers.
- For a sole trader or partnership, lenders use the profit. For limited company owners, lenders will use the director’s salary, which may be combined with either dividends or profits, depending on the lender chosen.
- Available government savings vehicles like the Help to Buy ISA and Lifetime ISA (LISA) boost savings by 25%. The First Time Buyer stamp duty incentive can also save up to £5,000.
- The stigma that self-employed mortgages are difficult often stems from a “skill shortage” in the industry. Planning early, even a year in advance, and working with an experienced advisor who understands accounts and lender criteria is necessary to secure a mortgage, especially when dealing with bad credit or previous declines.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
For specialist tax advice, please refer to an accountant or tax specialist.
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What you need to know…
The actual amount you can borrow will depend on your credit commitments, your regular monthly outgoings and how each lender assesses your income.
Lender’s affordability checks can differ meaning that the amount you can borrow may change from lender to lender. That’s where the expertise of our personal advisers comes in and where our independent status benefits you.
The minimum deposit required is 5% of the property purchase price. Most lenders will allow the deposit to come from a gift and some lenders will even consider this being raised via a personal loan. There are government incentives to help boost your savings if you are a first time buyer. Depending on your circumstance you may either need to have a larger deposit or will perhaps want to put a larger deposit down, due to preferable interest rates.
Because we are independent mortgage brokers we will be able to secure you the best deal for your circumstance.
An Agreement in Principle, also known as a ‘Decision in Principle’ will be provided after affordability and credit checks have been approved. An Agreement in Principle is extremely useful to increase your confidence when viewing and offering on properties. Estate Agents will typically want to see an Agreement in Principle before presenting your offer to the seller. Our personal advisers can help you with this.
It’s a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar of the property.
It’s also a good idea to take advice from your personal adviser on protecting you and your loved ones if something bad happens. For example: Life Cover, Critical Illness Cover and Income Protection.
Being accepted for a mortgage does depend on your circumstances. We are experts with all types of mortgages…. We specialise in obtaining mortgages for the self-employed, contractors, construction industry scheme (CIS) workers and those with historic adverse credit (as well as employed people of course). In all these situations we can frequently secure high street deals. Being independent and experts is a real benefit in these circumstances.
Your monthly payments will vary depending to your chosen mortgage term, choice of mortgage product, how much deposit you have and repayment type. It is best to chat with a personal independent adviser to find out exactly what interest rate and term you can secure to give an accurate monthly payment.
Most of the first time buyers we have helped secure a mortgage are paying less on their mortgage than they used to pay on rent. This does, however, depend on circumstances. The mortgage term chosen is a major factor which can be dictated by your age and intended retirement age. Of course, it is also worth noting you are paying back the mortgage and once it is repaid you won’t have any rent to pay.
There are costs associated with purchasing your first home. You will need to pay legal fees and other potential costs include a survey fee, stamp duty (which is a property land tax) and administration fees. There are First Time Buyer government incentives on savings and stamp duty that can help you with raising the monies for a deposit, costs and reducing stamp duty. Our personal advisers can give guidance within a free consultation.