Can I get a mortgage if I am freelance?

Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.

Get In Touch

[]

1 Step 1

Home » Specialist Mortgages » Contractor Mortgages Made Simple » Can I get a mortgage if I am freelance?

Can I get a mortgage if I am freelance? (Part 1)

Adam Messer explains how the mortgage process works for freelancers.

What exactly is a freelancer? Can I get a mortgage as a freelancer?

A freelancer is just someone self-employed. You would be doing some work for various different people for a period of time, but you wouldn’t be employed by them. You would invoice your clients for your time, and they would pay you.

I did a mortgage for someone who was a sign language translator, and she referred to herself as freelance. She worked with the police and the NHS. We generally view freelancers as self-employed sole traders. You would submit your tax return at the end of the year.

So, can you get a mortgage as a freelancer? Yes. We’d follow the normal self-employed sole trader criteria. Ideally, we need two years’ worth of income records, or potentially one year.

How do I know if I’m classed as a freelancer? How long do you have to be a freelancer before getting a mortgage?

Just to clarify, mortgage lenders don’t have freelancer criteria. They just view a freelancer as self-employed. Whether you class yourself as a freelancer or not doesn’t matter from a mortgage point of view.

You’re self-employed, and so two years’ records are the key. It can be done with one year with certain lenders, but you might pay a slightly higher rate. It also depends on the credit score.

Can I get a mortgage if I’m employed with a part-time freelance income?

Yes. We would use your employment salary, just like anyone else, and then you have a secondary income from self-employment. You can get a mortgage based on that, no problem.

We’d look at the last couple of years with lenders that will take secondary employment. Some will take a hundred percent of it, while others may take less. You might be employed and then do the same job on the side as a freelancer – we can use both the employed and self-employed income at the same time.

What types of mortgages can I get if I’m a freelancer?

You can access all types of mortgages. We don’t discriminate based on your job. It just depends on how much deposit you’ve got and how much you can afford.

You can get a Buy to Let mortgage as a freelancer, or a fixed rate, a variable rate or any other type of mortgage. Lenders don’t have separate mortgages for self-employed people and the employed. If you meet the criteria, you can have anything from a lender’s range.

How much can I borrow and how much deposit do I need for a mortgage as a freelancer? Will I need a larger deposit?

How much you can borrow depends completely on your income. You could have a £1 million deposit, but the size of the mortgage is still dependent on how much you earn.

You can normally borrow around 4.5 times your income if you haven’t got many other credit commitments or children. Your outgoings can sometimes reduce the amount you can borrow, but not always.

We check case-by-case on how much you can borrow, but it’s completely reliant on how much you’ve earned. As a freelancer, we will look at your net profit each year based on your tax return. You have money coming in and expenses going out, and what you’re left with is your profit. That’s what you pay tax on, and that’s the figure we’ll use for lending purposes.

In terms of the deposit, you can get a mortgage with as little as 5% deposit these days. You don’t need a bigger deposit just because you’re self-employed or a freelancer – it’s the same for everyone.

Speak To an Expert

Our highly knowledgable advisers are ready to help and answer any questions you may have around your first time buyers mortgage.

How do lenders assess mortgages for freelancers?

You’ll need some documents ready. We’ll want to look at your last couple of years’ net profits. We can get that from your tax return as long as it’s fully completed.

The lenders are going to ask for some specific documents, including an SA302 or tax calculation. This is a one or two-page document summarising how much you’ve earned.

You might have pay from employment on that, plus profit from self-employment. You might have partnership income, or land and property income – all different types of income are on this document.

There’s also something that goes along with that called a tax overview, confirming that your tax account is up to date and that you’ve paid your tax bill. Those two documents will need to match up.

Next, we need proof of deposit if it’s a purchase, plus some ID and bank statements. They’re pretty standard for everyone.

We’re going to use that net profit figure as your income, and then we’re going to look at any outgoings you’ve got: loans, credit cards, cars, any finance or dependents, for example. If you have a partner, we can add their income into the mix as well.

We’ll key that income into various lenders’ calculators to let you know how much you can borrow.

How many months’ freelance income do I need for a mortgage?

We’re talking years, really, rather than months. We need at least 12 months’ records, as you need to do your tax return because you’re self-employed.

You won’t be able to get a mortgage as a freelancer or self-employed person until you’ve done at least one year.

As a freelancer or sole trader, you’ll do your tax return from April. You don’t have to file it until the following January, but if we want to use your income for April 2025 to April 2026, you would do your tax return as soon as we hit April 5th.

You don’t have to pay the tax yet – that can wait until January. But once you have those tax documents, we can use that income.

Perhaps you started freelancing in January, and you haven’t got a full year, but you still need to do a tax return for that period. If you do a tax return in April, it’s not going to be a full year, but we could potentially still use that.

Then next year, in April, you’ll do your tax return again. One will be bigger than the other because one’s a full year and the previous one’s not. We’ll normally average the two out. So when I say we need a year’s records, we just need a tax year with some income on it – it might not necessarily be a full year.

What happens if I have fluctuating income?

If you have fluctuating income as a freelancer or sole trader, that’s fine. Most people do. It’s unusual to have exactly the same income year on year.

Most lenders will average the latest two years, but if the income has gone down, they’ll use the latest. One or two lenders might use the latest if it’s gone up, too, but not many.

We’ve covered the main points for this episode – have you got any final thoughts?

Generally speaking, when you’re self-employed, freelance or a sole trader, you’re best off speaking to a mortgage broker. We know which lenders to go to and which figures will be best to use, so just speak to a broker.

Key Takeaways:

Mortgage lenders treat a freelancer as self-employed. Ideally, two years of income records are needed, but an application can be made with at least one year’s worth of records (a completed tax return), although this may result in a slightly higher rate.
The amount you can borrow is completely reliant on your income, specifically the net profit figure from your tax return. Lenders typically allow borrowing around 4.5 times your income.
You are not required to provide a larger deposit just because you are a freelancer; mortgages are available with as little as a 5% deposit.
If your income fluctuates, most lenders will average your latest two years of income, but if your income has decreased, they will use the latest year’s figure.
Required documents include the SA302 (tax calculation) and a tax overview confirming your tax account is up to date and paid. It is generally best for freelancers to speak to a mortgage broker.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

The information contained within this article was correct at the time of publication but is subject to change.