What is a Self-Employed Mortgage?

Being self-employed can make it hard to get a mortgage. Here at Finance Advice Centre, we are whole of market advisors. This means we have access to all lenders to get you the best deal no matter what your situation.

What about the length of accounts?

We have the options available to gain a mortgage for you with less than 1 year’s accounts. This is possible if you are in a profession such as a doctor, solicitor, dentist, architect, or vet to name a few.

What counts as being self-employed?

You will be viewed as self-employed by lenders if you own more than 20-25% of a business from which you earn your main income. For example, you could be a sole trader, a contractor, or a company director.

How do you get a self-employed mortgage?

In theory when you are self-employed and looking for a mortgage you will have the same options as anyone else and you will need to pass the lender’s affordability tests like every other borrower. However, without an employer to vouch for your wage self-employed people need to provide much more evidence of their income than other borrowers.

What do you need to provide for a self-employed mortgage?

As proof of your income when you apply for a mortgage typically you will need to provide: Two or more years certified accounts (as previously mentioned we work with lenders who will accept your application with less than this but in general this is the standard) SA302 forms or a tax year overview from HMRC for the past two or three years

What are self-certification mortgages, and can you still get one?

Self-certification or self-cert mortgages were designed specifically for self-employed people and allowed them to self-certify how much they earnt within any given year and no need to provide any evidence.

Do self-employed workers pay higher mortgage rates?

Self-employed mortgages aren’t necessarily more expensive, as long as you can provide enough suitable information about your income you can qualify for the same mortgage deal as someone with a similar salary in a permanent, full-time job. The mortgage rate you receive is more likely to depend on how much deposit you have saved to put down and your credit rating.

How can you boost your chances of getting a self-employed mortgage?

As with any mortgage applications there are steps you can take to improve your chances of being accepted. These include: Save as much as you can for a deposit Check your credit rating and do what you can improve if it’s too low Correct any mistakes on your credit report

How can you find the best self-employed mortgage deals?

The best way to find a competitive mortgage is by shopping around as much as possible and comparing deals from different lenders. Remember when you are comparing deals to factor in the cost of any fees as you could find it is cheaper to go for a mortgage with a higher interest rate but a lower fee.

How does the set-up of your business affect your mortgage chances?

The structure of your business can influence how lenders view your income when you are applying for a mortgage. See how lenders view each of the three main business structures below.

How much can you borrow for a self-employed mortgage?

Each lender has different criteria and policy on how much they will lend to a borrower. In this case it doesn’t really matter whether you are employed or self-employed, as long as you meet the criteria set out by the lender you can typically borrow up to 4.5 times your annual income.

Is it more difficult to get a self-employed mortgage as a contractor?

Applying for a mortgage as a contractor can be quite tricky sometimes. In part this is because lenders will have different criteria on what defines a contractor, which will in turn dictate how much mortgage you can get. Typically, you are either an employed person working on a fixed or short-term contract, or you are self-employed and work through one main company.

Expert 95% Mortgage Advice & Deals

Let us put you in touch with one of our mortgage experts who will give you impartial advice and help you find suitable 95% mortgage products for you at the lowest % rates available.

Expert service

Highly Rated

No credit search conducted

Working with leading lenders ...

We work with high street and other lenders so you’ll get access to suitable deals that you may be able to apply for.

About us

Why use us?

From the information you provide to us, our experts will search the market and find the most suitable products for you. If you are happy with the product on offer, we will handle all the necessary paperwork for you, including any relevant applications, to ensure that everything runs smoothly for you.

Quick service

From just a few minutes completing some basic information, we will quickly search for suitable financial products for you.

Expert advice

We’ve helped thousands of customers secure financial products and service so you know that you are in capable hands.

Reduced stress & time saving

Choosing the right financial product is time consuming and can be stressful, so remove much of this by putting it in the hands of one of our financial experts.

Reliable service

Whatever type of financial product or service you are looking for, our service is reliable and always matched to your own personal circumstances.

Satisfaction guaranteed

Whether you’re looking for Mortgage Advice, Loan Advice or Insurance Advice or any other financial product or service, we can help you…

“Did a great job helping us with our mortgage. I would recommend!”

Rob Searcy

See more reviews

So ... how can we help?

Buying a financial product such as a mortgage can be the biggest decision made in our lives. It is for this reason that impartial advice is critical from qualified advisors.

First Time Buyer Mortgages

Bad Credit Mortgages

Self Employed Mortgages

Remortgages

Buy-to-let mortgages

Expat Mortgages

What is a 95% Mortgage?

A 95% mortgage enables you to borrow up to 95% of the purchase price of the property you are intending to buy, with just a 5% deposit required up front. Sometimes referred to as a 95% loan-to-value (LTV) mortgage, it allows you to get ownership of a property with a much smaller lump sum required, meaning it potentially involves less time to save your deposit.

These types of high loan to value mortgages have become less commonplace during the coronavirus pandemic, as lenders started to withdraw them to minimise their risk. The number of lenders offering 95% mortgage products fell from just under 400 to single figures, but thanks to a Government scheme due to start in April 2021, the chances of securing a 95% mortgage are now much better.

Can you get a 95% mortgage?

As always, lenders will take into account a number of factors such as credit score and affordability when deciding how much they are willing to lend to you. In some cases they may only be willing to loan less than 95% LTV but this will vary from lender to lender.

However the chances of a 95% mortgage are generally greater with many more banks and building societies offering the loans than in recent months. The Mortgage Guarantee scheme, which is similar to the Help to Buy mortgage guarantee scheme, which closed to new applicants in 2017, should help in this respect.

What is the Mortgage Guarantee Scheme?

The government’s new scheme, announced in the March Budget, aims to encourage lenders to start offering more 95% mortgages again to assist those for whom getting a higher mortgage deposit could be problematic. Starting in April 2021, the guarantee scheme will see the government ‘guaranteeing’ 95% mortgages for buyers with deposits as small as 5%.

The means that lenders have a government guarantee that will part compensate the lender if a loanee defaults on the mortgage, or if house prices fall and the property ends up in negative equity i.e. is worth less than the outstanding mortgage. The scheme is available from April 2021, not only to first-time buyers, but also anyone looking to buy a home up to the value of £600,000. The hope is that by agreeing to cover the risks, more lenders will be willing to lend to homebuyers with a small deposit.

Our approach - and how we do it

Enquire

We love speaking with our clients. Either give us a call or fill in one of our contact forms. Remember, we love a challenge!

Discuss

One of our Advisors will then find out what you’re looking to do, discuss your options and answer any questions you may have.

Relax

Your Advisor will find the best option for you and help arrange things. You then sit back and relax while we do the rest.

Ready to assist you.

Choosing a financial product or service, such as a mortgage, remortgage, loan or insurance can be daunting and your choice is a decision you need to get right. For this reason, it is vital that you get impartial advice from competent and qualified advisors. Whether you are a first-time buyer, looking to remortgage, hoping to remortgage or even buy a property to let, needing a loan or insurance this is where our advisers excel.

Be reassured that our aim is to guarantee reliable financial advice appropriate to any individual that makes contact with us. Through our network of contacts, we have access to thousands of financial products, from mortgages to loans to insurance, so we are confident that we’ll find one to suit you.

Am I eligible for a 95% mortgage under the mortgage guarantee scheme?

There are a number of conditions for those applying for 95% under the mortgage guarantee scheme:

Open to home buyers not just first-time buyers in the UK.
You must be intending to live in property being purchased.
Second homes and buy-to-let are not part of the scheme.
Properties up to the value of £600,000 are eligible.
The mortgage must be a repayment mortgage, not an interest-only mortgage
Standard affordability checks apply, including loan-to-income test and credit score test.
The loan-to-value (LTV) will need to be between 91% and 95% of the value of the property.

How do I apply for a 95% mortgage under the government scheme?

The scheme is initially intended to run from April 2021 through to 31 December 2022, although it will be reviewed during this period. Major lenders including Barclays, HSBC, Lloyds Bank, NatWest and Santander have all committed to offering 95% deals from April 2021, and could be joined by many more other lenders.

Even if you have the 5% deposit, you will still face the same affordability checks when applying through the scheme. You must be able to prove that you can comfortably afford the mortgage repayments after your other monthly expenditure has been taken into account.

What rates will be available on 95% mortgages?

Generally the lower the deposit you are able to put up, then the less competitive rates you will be offered. That said, as potentially more lenders offer 95% mortgages there should be some competitive deals for buyers who have just a 5% deposit to put down.

When choosing a 95% mortgage, there’s the option of going for a fixed rate or variable rate mortgage. A fixed rate mortgage sets the interest rate at a fixed level for a set period of time (usually between 2-5 years) so you won’t have the worry of payments going up should interest rates rise. At the end of the term, you’ll have the option of finding another competitive deal.

A variable rate mortgage can go up and down depending on economic circumstances, usually the Bank of England base rate. With standard variable-rate (SVR) mortgages, tracker mortgages, and discount mortgages, all of which are largely related to the base rate, there is less certainty of your repayments long-term.

Under the terms of the government’s 95% mortgage scheme, lenders are obliged to offer a five-year fixed-rate mortgage as part of their range. This is intended to provide borrowers with the certainty of monthly repayments over the time period.

As a mortgage is secured against your property, it may be repossessed if you do not keep up the mortgage repayments.

See what our customers think ...

Emma Griffiths

I would highly recommend the mortgage advice service Alice Hale was amazing throughout she is a credit to your organisation and helped us secure our dream home

Emma Weaver

We had a long journey buying our first home together and recent pandemic events didn’t help matters. Every step of the way, our advisor Steve was supportive, positive and we had every confidence in him. He was able to arrange a good deal for us and we were able to move into our dream house this autumn.

Joanne Widdowson

I used George from the finance advice centre to get my mortgage, and he was nothing but amazing! Talked me through every step, always easy to get hold of ! And got me a brilliant product I would highly recommend him, just brilliant 5 stars from me

What a Fantastic Service from start to finish. Great customer support from Ben Patten & Joe Frayne, superb product knowledge and exceptionally responsive to emails/calls, we can 100% recommend the Finance Advice Centre Ltd , they got us a great deal on a mortgage with suited life insurance, especially during this very difficult Covid 19 time ……

Ian Stamp

From start to finish, Greig and Emily were very helpful with our mortgage application. The advice Greig gave us was very clear and informed. They were always available either by phone or email to answer any questions we had. The whole process was made a lot easier because of the work they did. Would thoroughly recommend

Ross Nightingale

Let us do the work of finding your mortgage

We’ll put you in touch with impartial advice from an expert mortgage advisor who will help secure you the best mortgage deals available.

Find my mortgage specialist