Yes, self-employed people can get a commercial mortgage in the UK, and many specialist lenders prefer self-employed applicants because they understand business income. The key is knowing which lender to approach based on how you trade and how your accountant presents your income.
Can Self-Employed People Get a Commercial Mortgage?
Self-employed borrowers, including sole traders, limited company directors, LLP partners and freelancers, can get a commercial mortgage from the majority of UK lenders. The market splits into high street banks, challenger banks and specialist lenders, each with very different approaches to underwriting self-employed income.
As an ex-Lloyds Bank and Bank of Scotland banker, I have placed hundreds of self-employed cases. Getting a mortgage when self-employed is not harder, it is just different. Lenders use net profit, salary and dividends or share of partnership profit instead of payslips.
Self-employed applicants are not penalised by good lenders. They are assessed using a different evidence base, and the right **mortgage broker** will know which lender values your income profile most generously.
When Are You Considered Self-Employed for a Mortgage?
UK **lenders** treat you as self-employed if you own 20-25% or more of the business you draw income from. The threshold varies by lender, but the principle is consistent: if you control the business, the lender treats your income as self-employed even if you pay yourself through PAYE.
You will be classed as self-employed if you are a:
- Sole trader submitting a self-assessment tax return
- Limited company director owning 20-25%+ of share capital
- LLP member or partnership partner drawing a share of partnership profit
- Contractor or freelancer invoicing through a personal service company or umbrella
- Joint venture partner taking profit share from property or trading ventures
Self-Employed Commercial Mortgage Criteria
The core lending criteria are the same whether you are employed or self-employed. What changes is how the lender evidences your income.
Standard 2026 Commercial Mortgage Terms
- Rates: 5.75% to 10.00% depending on lender tier, with base rate at 4.50%
- LTV: 60-75% standard; self-employed may face 5-10% lower max LTV at some high street lenders
- Term: 5-25 years owner-occupied; 5-30 years investment
- Repayment: capital and interest, or interest-only on investment deals
Self-Employed Specific Requirements
On top of standard checks on **affordability** and credit, **lenders will need** a clear, verifiable income picture:
- Two years of certified accounts (one year with some specialists)
- Two years of SA302s and tax year overviews from HMRC
- Business bank statements confirming trading
- An accountant's reference or projection letter for newer businesses
- Evidence of upcoming work or pipeline where trading history is short
How Lenders Calculate Self-Employed Income
This is where self-employed cases live or die. The same applicant can be offered very different loan sizes by two lenders looking at the same figures.
Income Calculation by Trading Structure
| Trading structure | What the lender uses as income | Typical lender approach |
|---|---|---|
| Sole trader | Net profit before tax from self-assessment | Latest year or 2-year average, whichever is lower |
| Limited company director (small co.) | Salary plus dividends drawn | Most high street banks use salary and dividends only |
| Limited company director (specialist view) | Salary plus share of net profit after corporation tax | Allica Bank, Aldermore and others will use retained profit |
| LLP partner | Share of partnership net profit | Latest year or 2-year average |
| Contractor (PSC) | Day rate annualised (e.g. £500 × 5 × 46 weeks) | Specialists like Atom Bank and Kent Reliance |
For **limited companies**, the salary-and-dividend approach often understates true earning power, because tax-efficient **company directors** leave significant profit inside the business. Specialist lenders such as **Aldermore**, **Shawbrook** and **Allica Bank** will add retained profit to salary, lifting assessable income by 30-50%.
Years of Accounts Required by Lender Type
| Lender tier | Examples | Years of accounts | Income calculation |
|---|---|---|---|
| High street banks | Lloyds Bank, NatWest, Barclays, HSBC | 2-3 years | Salary plus dividend only for Ltd; net profit for sole trader |
| Challenger banks | Aldermore, Shawbrook, Allica Bank, Hampshire Trust Bank, Atom Bank, Recognise Bank, Redwood Bank | 1-2 years | Salary plus dividend OR salary plus retained profit |
| Specialist lenders | Investec, Paragon Bank, Kent Reliance, InterBay Commercial, LendInvest | 1 year (latest), some accept projections | Latest year net profit or projection-based, complex structures welcomed |
Documents You Need for a Self-Employed Commercial Mortgage
Self-employed applications stand or fall on documentation. **Lenders may** decline cases purely because the income picture is hard to follow, even when the underlying numbers are strong.
Required by Trading Structure
| Document | Sole trader | Ltd Co director | LLP partner |
|---|---|---|---|
| Latest 2 years SA302s and tax year overviews | Yes | Yes | Yes |
| Last 2 years certified accounts | Yes (if available) | Yes | Yes |
| Business bank statements (3-12 months) | Yes | Yes | Yes |
| Personal bank statements (3 months) | Yes | Yes | Yes |
| Accountant reference letter | Often | Often | Often |
| Companies House confirmation statement | No | Yes | LLP equivalent |
| Partnership / shareholders agreement | No | Yes | Yes |
| Latest management accounts | If recent year-end | Yes (typically) | Yes |
| Contract evidence for upcoming work | If pipeline-based | If pipeline-based | If pipeline-based |
Additional Items the Underwriter Will Ask For
- Property details: heads of terms, sales particulars, lease (if investment)
- Asset and liability statement
- Last 3 months payslips (only if you also have PAYE income from another role)
- ID and proof of address for all directors, partners or shareholders over 20-25%
- Source of deposit evidence
How to Get a Commercial Mortgage When Self-Employed
Here is the application process I recommend to self-employed clients.
- Speak to your accountant first to confirm two years of net profit (sole trader/LLP) or salary, dividends and retained profit (Ltd Co), and decide whether to draw additional dividend before applying.
- Get a specialist broker review of your figures, structure and target property to identify which lender values your income most generously.
- Pull your full document pack together using the checklist above. Missing items are the biggest cause of delay.
- Submit to two or three target lenders in parallel. Controlled shopping around protects your credit score and surfaces the best terms.
- Instruct valuation and solicitor as soon as a credit-backed offer arrives.
- Complete and drawdown, typically 6-12 weeks for high street and 4-8 weeks for challengers.
Use our [commercial mortgage application process guide](/knowledge-hub/commercial-mortgage-application-process) and our [commercial mortgage calculator](/calculators/commercial-mortgage) to model **repayment** scenarios.
How Much Can You Borrow When Self-Employed?
Most commercial **lenders** size loans on the higher of debt-service coverage (rental or trading income covering the mortgage) and personal income multiples. For owner-occupied commercial property, multiples of 4-5x assessable income are common.
Worked Example: Limited Company Director
A Ltd Co director takes £12,570 salary and £30,000 dividend, with £50,000 retained net profit after corporation tax:
- High street view: assessable income = £42,570 → indicative borrowing £170,000-£213,000
- Challenger view (salary + dividend + retained profit): assessable income = £92,570 → indicative borrowing £370,000-£463,000
The right lender choice more than doubles the loan available.
Earning Requirement for a £200,000 Self-Employed Mortgage
As a rough guide, to borrow £200,000 you typically need:
- Net profit (sole trader) of around £45,000-£55,000
- Salary plus dividends of around £45,000-£55,000
- Or a property generating £18,000-£22,000 a year in net rent to cover DSCR at 125-145%
The interaction between personal **affordability** and property income is why commercial cases are not formulaic. Our [how much can I borrow guide](/knowledge-hub/how-much-borrow-commercial-mortgage) covers this in depth.
Can a Sole Trader Get a Commercial Mortgage?
Yes. Sole traders can borrow on commercial mortgages from most UK lenders. The lender will typically use your latest year of net profit from your **SA302**, or an average of the last two years. Two full **tax year** cycles is the usual minimum, though specialists like Aldermore, Shawbrook and **Recognise Bank** will consider one year with strong supporting evidence.
Joint Mortgages with a Self-Employed Applicant
A **joint mortgage** where one applicant is employed and the other self-employed is often easier than two self-employed applicants. The lender assesses the employed partner using payslips and the self-employed partner using accounts or SA302s, then combines the affordability figures.
How to Boost Your Mortgage Chances When Self-Employed
There are practical steps you can take before submitting to **improve your chances** of approval and secure a better rate.
- Maximise net profit on the latest tax return, within tax-efficient limits, because most lenders weight the most recent year heavily
- Avoid large one-off expenses in the most recent accounting year that depress profit
- Resolve any HMRC arrears before applying, lenders pull a tax check
- Hold a clean 3-6 months of personal and business bank statements
- Get an accountant's projection letter if current trading is materially better than the last filed accounts
- Reduce short-term unsecured debt before submission to improve credit score and affordability
- Build a deposit of 30%+ to access lower LTV pricing tiers
One overlooked move: ask your accountant to file your tax return early. Many self-employed **borrowers** file in January, but submitting in May means you can use stronger figures from June onwards, six months earlier than competitors.
Do Lenders Accept Dividends as Income?
Yes, every mainstream commercial lender accepts dividends. The variation is in how they treat **salary and dividends** versus retained profit. High street banks use salary plus dividend only. Challenger and specialist lenders often go further and accept salary plus share of net profit after corporation tax, which is more representative for tax-efficient directors.
Can Freelancers and Contractors Get a Commercial Mortgage?
Yes. Freelancers and contractors are well served by specialist lenders such as **Atom Bank**, **Kent Reliance** and **InterBay Commercial**, who annualise your day rate (typical formula: day rate × 5 days × 46 weeks) rather than relying solely on filed accounts. You typically need 12 months in your current contract or sector and evidence of continuous work. A **freelancer** with a £500 day rate could see income assessed at £115,000 even if filed accounts show less.
Can You Get a Buy-to-Let Mortgage if Self-Employed?
Yes, and BTL is often easier than owner-occupied commercial for self-employed people. Most BTL lending is assessed on rental coverage rather than personal income. Specialist BTL lenders including **Paragon Bank**, **Kent Reliance** and **LendInvest** have specific products for portfolio landlords trading through limited companies.
Remortgaging When Self-Employed
**Remortgage** applications follow the same income evidence rules as new commercial mortgages, with the advantage that you have a payment history on the existing facility. Most self-employed borrowers benefit from a broker-led remortgage review every 2-3 years as products come off fix.
Why It Can Feel Harder to Get a Mortgage When Self-Employed
The perception comes from more documentation, more underwriter questions, and high street algorithms tuned for PAYE income. With the right lender and a properly packaged application, self-employed approval rates are excellent. The issue is rarely the borrower, it is the lender choice.
When to Use a Self-Employed Mortgage Broker
Always. A specialist **mortgage broker** knows which of the 20+ active commercial lenders treats your income structure most generously, packages the application correctly, and negotiates pricing.
At Commercial Mortgages Broker, our team is ex-Lloyds Bank and Bank of Scotland. We know how self-employed cases are assessed inside lender credit teams. For a free review of your options, [contact us](/contact) or visit our [commercial mortgage service](/services/commercial-mortgages).
Your property may be repossessed if you do not **keep up repayments** on your mortgage. Commercial Mortgages Broker is not authorised by the Financial Conduct Authority; commercial mortgages on properties used wholly for business purposes are not regulated by the FCA.
*Written by Matt Lenzie, Founder of Commercial Mortgages Broker. Ex-Lloyds Bank & Bank of Scotland.*