Question 1

Can I get a mortgage with 1 year self-employed accounts?

Accepted Answer

Yes. While most high street banks require 2–3 years of accounts, specialist lenders will work from 1 year of self-assessment figures. They typically use your latest year's net profit, sometimes with an accountant's projection for year two, to calculate affordability.

Question 2

Do lenders use net profit or gross income for a self-employed mortgage?

Accepted Answer

High street lenders typically use your salary plus the lower of your dividends or your net profit over a 2-year average. Specialist lenders calculate affordability using your salary plus your full share of net profit after corporation tax, which can significantly increase your assessed income.

Question 3

Can retained profits be used for a mortgage?

Accepted Answer

Yes, with specialist lenders. Retained profits — money left inside your limited company that has not been drawn as salary or dividends — can be included in your assessable income by certain specialist underwriters. This is one of the biggest advantages of working with a specialist broker over a high street bank.

Question 4

What is the maximum I can borrow as self-employed?

Accepted Answer

Specialist lenders apply income multipliers of 4.5–5× against your full assessable income including salary, dividends, and net profit share. For example, a director with £137,570 total assessable income could borrow up to £619,000 at 4.5×.

Question 5

I draw a low salary for tax reasons — will this hurt my mortgage application?

Accepted Answer

With a standard high street lender, yes. With a specialist lender, your salary is just one component. They assess your salary alongside dividends and your share of net company profits, rewarding tax-efficient structures rather than penalising them.

Self-Employed Mortgages