Head of Content
Mortgage Advisor & Director
Self-employed people usually have options when it comes to mortgages, but how difficult is it to get approved if you have only been trading for two years? The good news is that help is available for people in this situation, and in this guide, you will learn whether you have enough trading history and certified accounts to qualify for a mortgage, how to get approved, and how to secure the best deal.
Can you get a mortgage if you have been self-employed for two years?
Yes. Although the number of lenders you can approach would be greater if you had been trading for three years, there are currently around 68 lenders available for mortgage applicants who have been self-employed for two years and have accounts spanning this period of time.
Your mortgage prospects are reasonably good with two years’ accounts, assuming there are no other risk factors, but speaking to a broker is still recommended.
Why you need a mortgage broker
If you were to approach a lender at random, there’s no guarantee you won’t end up with a rejection against your name, since that lender might ask for three years’ accounts as standard.
There are brokers at Teito who specialise in self-employed applicants. They have deep working relationships with the lenders who accept two years’ trading history or less, and may be able to secure you an exclusive deal with a lower rate and more flexible terms.
Our brokers have access to the entire market, including specialist lenders for self-employed people, so their guidance can increase your chances of a positive outcome.
Lending criteria
As a self-employed professional with two years’ trading, you will not be classed as high risk because of your employment situation alone, unless any of the below applies to you:
- You made a loss in the last year
- Your accounts show declining profits
- Your earnings come from ‘non-standard’ sources, such as foreign income
Lenders will assess your income and employment during their affordability checks and work out your maximum borrowing based on an average of your earnings over the last two years.
General eligibility requirements
Lenders will also review your general eligibility, based on the factors below:
- Deposit amount: With two years’ accounts, getting a mortgage with the standard minimum deposit amount of 5-10% of the property’s value is possible
- Credit history: If you have bad credit, it is possible to get a self-employed mortgage with two years’ trading, but borrowers with severe types of adverse, such as bankruptcies or repossessions, or recent credit problems might need a specialist lender
- Age: Your age can become a risk factor if you are due to turn 75-85 during the mortgage term, but there are specialist lenders and brokers available for older borrowers
Speaking to a broker is recommended if you fall outside of any of the above criteria.
How to get a self-employed mortgage with two years’ accounts
Follow the steps below to source your own self-employed mortgage with Teito:
Proving your income: You will need accounts covering the two years you have been trading, with either SA302 forms or a tax year overview from HMRC to evidence your income. Some lenders might also want a projection for your third year of trading.
Optimising your credit reports: You can download your credit reports by accessing a free trial with Checkmyfile. Reviewing your files and reporting inaccuracies or outdated issues can boost your chances of landing a low rate.
Securing your mortgage: You can browse mortgage rates for free on Teito and speak to a broker who specialises in self-employed mortgages during the process. They can help you secure the best deal that you qualify for, and may even be able to land you an exclusive rate. Choose your preferred option below to get started:
Compare self-employed mortgage rates for FREE
Which mortgage lenders are available?
There aren’t many mortgage lenders who will decline you outright because you have less than three years’ trading history, but it isn’t unheard of. Providers including Bath Building Society and the Bank of China specify that self-employed borrowers need at least three years’ trading history.
Barclays and the Bank of Ireland, meanwhile, will ask for three years’ work history in the same line of business but base the affordability assessment on accounts spanning two years.
Lenders who will be happy with just two years’ accounts include:
- Accord Mortgages
- Buckinghamshire Building Society
- Halifax (will also accept one year’s accounts)
- HSBC
- Natwest
The lenders you will have access to based on how long you have been self-employed will be a mixture of high street providers and specialist lenders. You can compare rates and deals from these lenders and more for free on Teito - get started here.
Can you get a mortgage with less than two years’ accounts?
Yes. There are mortgage lenders who accept self-employed borrowers with just one years’ accounts, but the number of approachable providers will more than double at the two-year mark. That isn’t to say you should delay your plans, as options could be available.
The main benefit of waiting until you have two years’ trading history is that getting the best deal you qualify for could be easier, as a wider range of products and rates will be available. You may have to put down extra deposit with only one years’ accounts too, as some lenders cap the LTV.
In summary, you should speak to a broker if you have been self-employed for under two years. They can advise you on what kind of rate you could secure now versus if you were to hold off until later, and might be able to land an exclusive deal for you based on just 12 months’ accounts.
Read more on this topic in our guide to mortgages based on one year’s accounts.
Will you get a better deal if you wait until you have three years’ accounts?
Not necessarily but, at the time of writing (July 2024), you will have access to roughly 11 additional mortgage lenders with three years’ accounts to submit rather than two, and this could help your cause since it might mean a fair amount of extra rates and deals to choose from.
There is, however, no guarantee that the rates available from these extra lenders will be different to the ones you can already access, and there are other ways you can improve your chances of landing a lower rate, such as putting down extra deposit and optimising your credit files.
A mortgage broker will be best placed to advise you on how your prospects might change with three years’ trading history compared to two years’ worth.
Why choose Teito for your mortgage needs?
You can use Teito to browse rates and deals from across the entire market and access a free, no-obligation chat with a mortgage broker to make sure you choose the right one.
Here are just some of the reasons self-employed mortgage applicants choose us:
- Exclusive rates and deals are available
- Our brokers are whole-of-market and experts on self-employed mortgages
- We are five-star rated on leading review websites
- It takes minutes to secure an agreement in principle with the help of our brokers
Ready to compare rates and deals and speak to a broker who specialises in arranging mortgages for self-employed people with two years’ accounts? Get started here.
FAQs
The only difference it will make if you are applying for a mortgage based on two years' trading is the way the lender assesses your income, and what income you can declare.
Sole traders can declare net profits (if based on accounts) or their total income received (SA302s). Those in business partnerships can apply for a mortgage based on their share of the net profits (accounts) or their share of the total income received (SA302s), while company directors can use their share of the directors' salary, share of dividends, or net profit if there has been a large business expense or a sum earned that was retained in the business.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.