Getting a Sole Trader Mortgage

In order to get a mortgage as a sole trader, you’ll have to prove your annual income and history of trading to a lender. Since self-certification mortgages are a thing of the past, regulations are now in place to make borrowers prove their income and affordability.

If you are a sole trader or a partnership, you’ll be required to have a minimum of 12 months trading history and prove this to a lender by providing your yearly tax returns or accounts, regardless of how you submit this information.

You may do your own accounts and file a self-assessment form, have a bookkeeper who provides the information for you to submit a self-assessment form, or have a qualified accountant who submits the self-assessment form for you.


How is my Affordability Worked out?


If you are a sole trader, then your affordability will be worked out from the ‘total income received’ figure on your SA302 form. If you’re using sole trader accounts, then it’s the ‘net profit’ or ‘drawings’ amount.

If you are a partnership, it’s also the ‘total income received’ figure from the SA302 form, but if you’re using the partnership accounts then it’s your own share of the ‘net profit’ or ‘drawings’ figure.

What do I need to Consider?

There are many factors to consider with a sole trader or partnership mortgage:
  • Deposit: If you fall out of standard lending criteria, for example if you only have 12 months of accounts history, then your mortgage may require a higher deposit.
  • Proof: You’ll usually be required to prove your last three years of trading history, but some lenders will consider two years or even 12 months in some circumstances.
  • Adverse credit: If you’ve got adverse credit, whether you are a sole trader or partnership, then you still will have access to mortgages with some specialist lenders who lend to borrowers with poor credit.

What Documents will Lenders ask for?


All sole traders and partnerships have the common tax year end date in line with the UK Financial Tax year (ending April 5th), and lending is almost always based on your annual accounts / tax returns filed from this date.  

Whilst it’s not imperative that you have an accountant, you may find it easier to have someone look after your business figures. If you have accounts that the lenders can use then they will, as long as they are drawn up and submitted to the HMRC by a certified accountant.  

If you don’t have a certified accountant drawing up your books, then you’ll need your self-assessment tax year overview, and SA302 documents.

Sole Trader Commercial Mortgages

Commercial mortgages are borrowings made by companies, on company property or to buy or fund a company itself.  

This may be to buy a business or rental property, but is not to be confused with buying a personal property made by someone who owns a company – this is a personal mortgage using commercial income. 


Contact The Mortgage Hut Today

For advice on getting a sole trader mortgage or a partnership mortgage, speak to one of our expert advisers who will be able to help you with the next steps.