Self-Employed Mortgage 2 Years’ Accounts
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Self-Employed Mortgage 2 Years’ Accounts
Shane Reavey explains how the mortgage process works if you are self-employed with two years’ accounts.
Do mortgage lenders accept self-employed applicants with only two years of accounts?
Yes. Most lenders are happy with two years’ full trading, as that’s enough time for them to establish how the business is going and notice any trends they might want to pick up on.
Hopefully, the turnover and profit of the business are increasing – a lender then typically takes an average of the last two years’ net profit.
It may vary, but that’s why it pays to talk to us about your circumstances. We’ll be able to locate a lender that fits.
Is two years’ self-employed income enough for most lenders? Will I need two full trading years or is part of a year acceptable?
Most lenders average the last two years, so that’s typically enough. Two years’ full trading is preferable and will allow more borrowing potential, but some lenders would work on part of a year.
As a broker we would approach a suitable lender and look at the case as a whole. What would help in that scenario is a track record within the same line of employment, perhaps moving from an employed into a self-employed role.
Are there mortgage lenders who accept less than two years’ accounts? Are specialist lenders a better option with only two years of accounts?
Yes, some lenders will accept one year’s accounts. There aren’t as many, so it limits the options slightly. They will look at the profile of the case and the client’s previous employment history to establish a track record.
Most mainstream lenders will work off two years’ accounts, so you wouldn’t necessarily need to approach a specialist lender if you have two years of full trading.
Bad credit or or anything like that might mean looking at more specialist lenders, though, which is the same for the employed or self-employed.
What if my second year shows lower profits than the first? Should my income be increasing or is fluctuating income acceptable?
Fluctuation is acceptable. Lenders typically average the income over the past two years if there is an upward trend, but if there is a reduction in profits, they may then look to just use the most recent year’s figures.
They’ll also want to understand the reason for that reduction. If they’re happy with the rationale provided, they could still take an average. It could be a one-off cost for machinery or equipment. That’s going to only enhance the future performance of the business, and just means you’ve taken a hit that year.
I encourage anyone in this situation to speak to a qualified mortgage broker.
Can I include other income sources? Will I be assessed on net profit, gross income or dividends?
Broadly speaking, lenders want to know about all income received – and that helps with the overall feasibility of the case. Depending on how long you’ve been receiving that additional income, it can be good for your application.
For investments, rental incomes or dividends, lenders look at your self-assessment tax return and tax year overview, which are available from the HMRC website or through your accountant.
If you’re a limited company director, lenders may need full company accounts for the last two years, as well. Most lenders use profit after tax, but some will allow you to use gross profit before tax if you’re not drawing all the money out of the business. That can be a good way of extending the mortgage potential for a limited company director.
Speak To an Expert
Come on in and be quite forward with what you’re after – just be very honest with your mortgage broker. It’s good to make sure that we know absolutely everything about you. That way we can’t be blindsided by a lender. An open book policy is very good when coming to see your mortgage broker.
Do I need an accountant to prepare or certify my accounts?
Not if you’re self-employed as a sole trader. Lenders typically look at those two-year self-assessments, tax calculations and overviews, which are available from the HMRC website. People often complete these themselves, so there wouldn’t necessarily be a need for an accountant.
For partnerships, lenders typically look at what we’ve just mentioned as well as partnership accounts, which some lenders may want to be certified. For limited companies, they’ll look at the personal tax calculations and overviews, but they’ll also want finalised, certified accounts, which would require an accountant.
Sometimes lenders will accept an accountant’s certificate, which can make the process a little bit easier for clients.
What documents do I need to apply for a mortgage with two years of self-employed accounts? Are personal and business bank statements required?
Along with the documents we’ve just mentioned for sole traders, partners and limited company directors, lenders will also want both personal and business bank statements to see the money coming in and out. That helps them assess what to factor into the overall affordability.
Business bank statements also give them a live insight into how the business is performing at the time of application. A client may do their accounts in line with the tax year, from April to April, but they’re now doing a mortgage application in December.
Having those last three months of bank statements would reassure the lender that the business is still operating to the level previously declared.
How much deposit do I need if I only have two years of accounts?
Most lenders offer the same deposit criteria for both the employed and self-employed. Some companies limit it slightly from a risk perspective, but it should be largely the same. You don’t need to put down a bigger deposit. If the credit record stacks up, there shouldn’t be an issue.
There have been times previously in the market where lenders have requested a slightly bigger deposit from self-employed clients, but at the moment it’s the same for both the employed and self-employed, which is good news [information correct at the time of recording in August 2025].
Can I still get a high Loan to Value mortgage?
Yes. There are lenders offering a 95% Loan to Value (LTV) for the self-employed. At 90% LTV, there’s a wide range of products available.
In the past this has been restricted a little and we don’t know if that will be the case again. But at the moment, in August 2025, there are no restrictions on the self-employed. The same criteria applies to everyone.
Will my credit score impact my eligibility more because I’m self-employed?
It will have an impact, but no more than for employed clients. Lenders don’t differentiate between the employed and self-employed in terms of credit-scoring.
If someone has had a credit issue previously or they are concerned about their credit, I’d encourage them to speak to a qualified mortgage broker – we have the knowledge to review the credit file.
Is it better to go through a mortgage broker if you’re self-employed? Any final thoughts?
By speaking to a qualified mortgage broker, you’ll get expertise and advice across a huge amount of lenders – rather than just the one or two you might go to yourself.
We’ll also signpost really early about the documentation you need and how to get ready for a mortgage. Then, when you find a property you want, it’s a smooth, quick process from start to finish.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.