Self-Employed Mortgage 2 Years Accounts

Do mortgage lenders accept self-employed applicants with only two years of accounts?

Yes, and actually for most lenders, that’s the minimum that they require. Two years’ worth of accounts is the ideal situation.

As a mortgage broker, when we’re talking to self-employed customers who have submitted two years’ accounts, our eyes light up – it means that we’re not restricted on which lenders we can go to.

Is two years of self-employed income enough for most lenders? Will I need two full trading years or is part of a year acceptable?

Two years is absolutely enough. But you can usually still proceed if you haven’t yet got two years. For instance, if you’ve been trading for two years, but you haven’t fully submitted the second year, you can still move forward.

It is possible to still get a mortgage, we’ll just be more limited on which lender we can go to.

Are there mortgage lenders who will accept less than two years of accounts?

Yes. As of today in July 2025, Halifax will actually take one year’s worth of accounts plus a prediction for your second year. That’s subject to change – like anything in the mortgage industry, things can change at a drop of a hat.

But as it stands at the moment, as long as you’ve got three months’ business bank statements to support the prediction for your second year, you could proceed with just one year’s accounts.

Are specialist lenders a better option with only two years of accounts?

Not really. I wouldn’t normally consider a customer with only two years’ accounts to be in need of a specialist lender. We would still be looking at the big high street banks in this situation.

What if my second year shows lower profits than the first? Should my income be increasing or is fluctuating income acceptable?

That’s a great question, actually, because certain banks look at it in different ways. Some banks are more generous than others, and if the first year is higher than the second year, they use an average over the two.

However, most banks err on the side of caution, and if the second year is lower than the first, they only take the second year’s income into consideration. They’ll assume the second year’s income will be the norm from that point on. That’s how they assess the affordability.

Can I include other income sources like rental income and investments? Will I be assessed on net profit, gross income or dividends?

Yes, you might have income from possibly multiple sources and we can actually use this.

The way we would assess affordability on this basis is to use the SA302, which is the tax overview and calculation. On the calculation, there’s a section stating ‘total income received,’ which brings in rental income, investments and any earnings from a current company. That’s the figure that a bank will use in assessing the income.

When it comes to assessment on net profit, gross income or dividends, that will depend on whether we’re dealing with a sole trader or limited company. It will also depend on what works out better for the customer.

If we’re dealing with a limited company director, for instance, it may be better to just use the tax calculation for their income. We can back that up with the company accounts or possibly investment accounts to explain where the money comes from.

If we’re dealing with a sole trader, we’re only going to use the tax calculation to confirm the income they’ve received. If the bank requires additional information, like company accounts or evidence of sold investments, we’ll just tackle that as it comes in.

Do I need an accountant to prepare or certify my accounts?

If you’re a limited company, yes, you do. You would need an accountant to certify your accounts. If you’re a sole trader, you don’t. You can actually just do it yourself.

I would always recommend getting an accountant anyway, just to avoid any mistakes and any potential pitfalls in the future.

What documents do I need to apply for a mortgage with two years of self-employed accounts? Are personal and business bank statements required?

For sole traders and limited companies it’s very much the same. We’re going to need two years worth of SA302s, which are your tax overviews and calculations, along with your SA100s, which is your tax return, or your full company accounts.

We also need three months’ of your business bank statements, just to show the lender that you’re still operating. We also need three months’ personal bank statements. That will be the same, whether you’re a limited company director or sole trader.

Preparation is key, because there are more documents required for the self-employed – being on top of that early on saves time further down the line.

How much deposit do I need if I only have two years of accounts?

Being self-employed is not going to hinder you at all. You can proceed with a 90% or 95% mortgage. What’s more important is the type of property you’re buying. Are you buying a new built flat or a pre-existing house? That’s where the Loan to Value fluctuations can happen.

Can I still get a high Loan to Value (LTV) mortgage?

Yes, you can. There are no restrictions for the self-employed with lenders. If I had a customer with a 5% deposit who was a self-employed plumber we could still find a lender that would work well for them – whether they are a sole trader or limited company director.

Will my credit score impact my eligibility more because I’m self-employed?

It wouldn’t impact it more. The banks don’t seek a better credit score from you because you’re self-employed. They’re going to treat you the same as a normal employee.

The only difference is they’re going to need a few more documents to assess your affordability. They make those judgments from what they see over your latest two years income – or possibly one year’s.

Is it better to go through a mortgage broker if I’m self-employed?

Absolutely. I would always recommend using a mortgage broker when you are self-employed. It can be difficult to understand the difference between an SA100 and an SA302 when lenders request these. In short, SA100 is your tax return or your company accounts and your SA302 is your personal tax calculations and overviews.

Finding these and knowing what to look for can be tricky. Using a mortgage broker just makes it easier to assess everything. Also, if you’re happy to introduce us to your accountant, we can work on it together and just keep you CC’d in. That makes life just a lot easier for everyone.

One other thing that often gets overlooked with the self-employed is protecting yourself with life insurance, income protection, and critical illness cover. Limited company directors actually get a perk here as they could take life insurance through the company.

That allows you to pay the premiums before tax and national insurance and is more efficient. Strictly speaking, when it comes to anything tax-related, you should always speak to a tax advisor. But it’s certainly worth looking into for limited company directors.

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

For specialist tax advice, please refer to an accountant or tax specialist.