Self-Employed 1 Year Accounts Mortgage

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Home » Self-Employed Mortgages » Self-Employed 1 Year Accounts Mortgage

Self-Employed 1 Year Accounts Mortgage (Part 1)

Archie Thomas talks us through applying for a mortgage when you are self-employed with just one year of accounts.

What are the requirements for getting a mortgage as a self-employed individual with only one year of accounts?

The mortgage application process for self-employed individuals is similar to that for employed individuals. The difference is in the income documents required. For self-employed applicants with one year of accounts, you will need your SA302 tax calculations and the corresponding tax year overviews.

It is a little more limiting to get a mortgage with one year of accounts, but there are lenders out there that will allow it – we can definitely find a solution.

What is considered as acceptable proof of income for a self-employed mortgage applicant with one year of accounts? What documents do I need to gather?

The main proof of income is going to be your SA302 tax calculations and the corresponding tax year overviews; these enable the lender to assess your income correctly. Additionally, your bank statements for the last three months are usually needed.

Do self-employed individuals with one year of accounts have access to the same mortgage products as those with longer accounts?

Yes, most mortgage products will still be available to you if you have just one year of accounts, but you will be more limited with the number of lenders willing to lend to you.

Lenders’ criteria change constantly, and what a lender may require today may be completely different tomorrow. I can’t give you a list of products available, but we can help you find a solution and look into the products that you want.

How do lenders assess the affordability of a mortgage for self-employed individuals with one year of accounts?

Lenders use your SA302s and corresponding tax year overviews. They will take these as your proof of income and their affordability calculations will be derived from those.

What interest rates can I expect as a self-employed mortgage applicant with one year of accounts?

This is an interesting one, because interest rates really depend on your deposit. The higher your deposit is, the more preferential your rate is going to be. If you had a 10% deposit, for example, your rate will generally be higher than if you had a 20% deposit.

As said previously, we are going to be looking at a smaller handful of lenders who accept one year of accounts compared to the full open market. Therefore, the rates offered will depend on the current market position of those lenders and overall market trends. With constant market fluctuations, mortgage rates are always subject to change.

Are there any specific mortgage lenders or financial institutions that specialise in providing mortgages to self-employed individuals with one year of accounts?

There are a handful of lenders who will consider mortgage applications from individuals with only one year of accounts. However, lender criteria are constantly changing, and a lender that accepts one year of accounts today may require two years’ next week.

Halifax is one lender that will allow one year of accounts, and so is Oldamore [correct at the time of recording in August 2025].

Are there any additional criteria or considerations that self-employed individuals with one year of accounts should be aware of when applying for a mortgage?

Given the constantly changing criteria, your best course of action is to contact your mortgage broker. We can certainly assist, as we stay up to date with lender criteria and any other changes.

Whenever clients are ready, we’re happy to help with any questions.

How long does the mortgage application process usually take for self-employed individuals with one year of accounts?

We generally advise that the entire mortgage process, including the solicitor’s involvement, takes approximately three months from start to finish. However, timescales will depend upon whether you’re purchasing a new property or if you’re remortgaging.

Solicitors can impact the timescales for your remortgage. However, you can start exploring new deals up to six months prior to your current rate ending, switching over at the end of that six-month period.

Again, if you’re purchasing, you can start the process whenever you’re ready. First, we can check affordability and get you an Agreement in Principle – which is what estate agents want to see to show you can afford the property. When you’re ready we can move forward with a full mortgage application. From that point, you can expect the process to take around three months.

Is it beneficial to work with a mortgage advisor or broker when applying for a mortgage as a self-employed individual with one year of accounts?

It’s always beneficial to work with a mortgage advisor, even if you’ve got more than one year of accounts, or you’re employed. We stay up to date with lending criteria and market trends, which means we provide you with accurate and up-to-date information.

With changing criteria, it’s definitely best to contact a broker at the point of when you’re looking to apply for a mortgage.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

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Self-Employed 1 Year Accounts Mortgage (Part 2)

Archie Thomas from Rockstone Mortgage and Financial Advice continues the conversation on mortgages for the self-employed with just one year of accounts.

Can I apply for a joint mortgage with a partner who has a regular income, even if I’m self-employed with one year of accounts?

Yes, you can. There are lenders out there who will accept one year of accounts, but you will be slightly limited on which lenders you can choose from.

With regards to your partner, if they’re an employee and they’re on PAYE, using their payslips is going to be generally straightforward. If your partner has one year of accounts as well, it’s just going to be a case of us researching the lenders who are going to accept this.

Are there any specific challenges or risks that self-employed individuals face when applying for a mortgage with one year of accounts?

There aren’t any challenges or risks per se. I think the main challenge is actually having just one year of accounts. The majority of lenders are going to prefer borrowers with between two and three years of accounts, so they can correctly assess the affordability.

Contact a mortgage broker – we can help do the research to find a lender who will accept you with one year of accounts.

What happens if my one-year accounts show low or fluctuating income? Can I still qualify for a mortgage?

It may still be possible to qualify for a mortgage. The lender will assess the total income over the year minus any costs. That’s generally an issue in the first year if you have large outgoings – especially for certain businesses. If you’re buying machinery or vehicles, for example, that’s going to deduct your affordability.

So, lenders will assess income over the whole year and they may request bank statements to prove a steady income.

What impact does credit history have on the mortgage application process for self-employed individuals with one year of accounts?

Credit history has a massive impact on affordability on any type of mortgage application.

When we complete an Agreement in Principle (AIP), which is generally the first step to see how much someone can borrow, the majority of lenders will run a soft credit search. However, some lenders will do a hard credit search – just be aware of that.

If you’ve got credit commitments in the background and you don’t disclose these to us at the offset, they will be picked up during the AIP stage, which can make it harder sometimes for us to understand the situation.

If there is credit in the background, such as car loans, property loans or second charge loans, and you’ve got credit cards as well, that can have a negative impact on the mortgage and the total amount you’ll be able to borrow.

Are there any government schemes or support available to assist self-employed individuals with one year of accounts in getting a mortgage?

There are schemes available. You could look into things like a Shared Ownership scheme, which allows you to purchase a percentage of the property, and the percentage that you don’t own, you pay rent on.

There are other options out there too – but, again, it would be best to contact us so we can look into the options and assess your circumstances, because it will be different for each person.

Are there any alternatives to traditional mortgages that may be more suitable for self-employed individuals with one year of accounts?

No, not really. I think the main point to keep in mind is that you’re going to be looking at a handful of lenders instead of the whole of the open market. Not all lenders will allow someone to take out a mortgage if they only have one year of accounts.

Lender criteria is constantly changing, so it’s best to contact us. We can look into your current options and move forward from there.

Can I use additional sources of income, such as rental income from properties or dividends, when applying for a mortgage as a self-employed individual with one year of accounts?

Yes, certainly. Dividends will be taken into account as a standard. When you have your SA302s, they will show your employment income and dividends in the relevant sections. Generally, the lender will look at employment and dividends.

Rental income can be used by lenders, but something to consider is that the whole amount will most likely not be used, as they’ll subtract the running costs of that Buy to Let. So, depending on those costs, the actual rental income lenders will consider for affordability may be lower than your total income from land and property shown in your accounts.

Is it possible to make overpayments or pay off a mortgage earlier as a self-employed individual with one year of accounts?

This will depend on the mortgage lender’s thresholds.

The vast majority of lenders will allow an overpayment of 10% per year of the outstanding balance of your mortgage. There are some lenders that will allow you to make an overpayment of 20%. But my advice is to contact the lender directly, as they’ll inform you of the exact amounts you can pay without incurring a fee.

If you do go over that 10% or 20% set by the lender, you will be charged a fee by them. So it’s definitely best to check with them before you make those overpayments.

Can I get a Buy to Let mortgage with one year’s accounts?

Absolutely – affordability for a Buy to Let mortgage is looked at completely differently than for a standard mortgage.

Some lenders will require a minimum income for a Buy to Let mortgage, and they may not accept you if you haven’t got two years of accounts. However, there are a lot of lenders in the Buy to Let market that will not look at your income at all – instead, they’ll go off the rental income alone.

Rental income is stress-tested on a percentage mark, depending on your tax bracket. For a basic rate taxpayer, the rental income from a Buy to Let will need to be 125% of the monthly mortgage payment – and for a higher rate taxpayer, it needs to be 145% of the mortgage payment.

What steps can I take as a self-employed individual to increase my chances of securing a mortgage with one year of accounts? How can a mortgage broker help here?

It’s more relevant here to talk about how a mortgage broker can help. We’ll be able to provide you with expert guidance and liaise with our contacts at certain mortgage lenders – they will be able to provide us with a strong idea as to whether the mortgage will be acceptable to themselves.

Securing a mortgage on one year of accounts is fairly straightforward, as long as we are looking at the correct lenders who allow it. If we have those conversations with them and sense-check everything, it should be pretty straightforward.

I’m happy for anybody to contact us here at Rockstone with any questions.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE REPAYMENTS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.