Can A Sole Trader Get A Mortgage?

Can a sole trader get a mortgage? Lets find out.

GREAT NEWS! You set up your own business and your enjoying life to the maximum, but now you need a mortgage. Hopefully you’ll find this helpful.

Something we get asked a lot is ‘whether I can get a mortgage if I’m self-employed’, well the simple answer is YES you can. Most lenders will state that you’ve got to have at least two or three years of full accounts when you run your own business, however, there are still options for those of you that haven’t quite got two years accounts or maybe you’ve just finished your first year. So fear not, your new mortgage deal could be closer than you think.

How is affordability worked out for Sole Traders?

So let’s explore this in more detail and start with those that have got two or three years accounts. Lenders will typically look to use an average of your net profits from the last two or three years. Normally, if you only recently started your business, your latest year’s profits might be higher than the previous year because of start-up costs and increased business revenue and sometimes this increase in profit can be quite substantial. If this is the case with your business, the good news is that some lenders in the market will use the latest year’s profits, but, if your income has decreased they would typically only use the decreased income.

REMEMBER : Your affordability is worked out using your NET profits – NOT your turnover!

So, let’s say you turned over £40,000 but you declared £20,000 of expenses such as fuel, materials, advertising and so on, then in this instance your net profits would be £20,000 and this would be the figure used for affordability. Basically, it’s quite important that when you’re looking to obtain a mortgage, your accounts look the best they can.

So what if you have less than 2 years trading accounts?

If you haven’t quite got two years accounts or you have just finished your first year, then don’t fear! There could still be options for you as a couple of lenders only require 1 year of completed accounts.

So how do you go about getting a Sole Trader mortgage?

If you’re a Sole Trader Mortgage, you will want to discuss your options with a mortgage broker first. They’ll be able to let you know what you can borrow based on your income and search the whole of the market to find you the most suitable deal.

We hope this short article gives you hope as a Sole Trader. If you’d like to discuss your options with a human being, our team of professional mortgage advisers at Robin Mortgage Design would be happy to help. Just give us a call on 0333 242 3863, alternatively, you can fill out our online enquiry form, and we’ll be in touch with you shortly.

Good Luck with your new mortgage

Written by Mark Travell, Director of Robin Mortgage Design

#SoleTraderMortgage #SoleTraders #SoleTraderMortgageBroker


Robin Mortgage Design may charge a fee for arranging your mortgage. A typical fee would be £395.00 but could be up £1,495.00 depending on your circumstances.

The information in this blog is only valid for the date it is written.