Answers · UK 2025/26
How do mortgage lenders calculate self-employed income?
Most UK lenders use 2-3 years' SA302 / Tax Year Overview from HMRC, averaging net profit (sole trader) or salary + dividends (limited company). Some lenders accept 1 year. Specialist lenders consider day rate × 5 × 46 weeks for contractors.
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UK mortgage assessment of self-employed income 2025/26. Sole traders: most high-street lenders need 2-3 years SA302 + Tax Year Overview, averaging net profit. Some (Halifax, Nationwide) accept 1 year. Limited company directors: most use salary + dividends declared (NOT retained profits). Specialists (Kensington, Aldermore) use share of operating profit — better if retaining earnings. Contractors: specialist lenders (Halifax, NatWest, Clydesdale) use day rate × 5 × 46 weeks = annualised income. Maximum borrowing: 4-4.5× income typical, up to 5.5× for high earners. Tips: maintain consistent or rising profit; use specialist broker; plan 12 months ahead — switching sole trader to Ltd resets clock at most lenders.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.