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25th July 2025. Helping those that are self-employed: some brief highlights about what you need to know.

Getting a Mortgage When You're Self-Employed in Waterlooville, Portsmouth & Surrounding Areas

If you're self-employed in Waterlooville, Portsmouth, or anywhere across Hampshire, getting a mortgage can feel frustrating especially if your accountant has done a great job of keeping your declared income low for tax purposes.

But here's the reality: while minimising tax might feel smart now, it could be seriously damaging your mortgage affordability in the future.

At Astute Mortgages, we specialise in helping self-employed people just like you navigate this tricky balance.

Why Your Self-Assessment Tax Return Matters So Much

When applying for a mortgage as a sole trader, limited company director, contractor, or freelancer, the key document lenders assess is your SA302 (your self-assessment tax calculation). This shows how much income you've officially declared to HMRC.

If you've kept your income low to reduce tax, you're also telling lenders you have less money to repay a mortgage. That directly affects how much you can borrow.

What Lenders Look At for Self-Employed Applicants

Lenders usually assess your income using one or more of the following:

• Sole Traders: Net profit after expenses (from SA302 and Tax Year Overviews)
• Limited Company Directors:
  1. Salary + Dividends, or
  2. In some cases: retained profit (only with select lenders)

Contractors: Daily or hourly rate x days worked (based on contract terms)

They often want to see:

• Two years of accounts or SA302s
• Occasionally, just one year with a strong track record or same-industry experience

How Declared Income Affects Affordability

Let's say your business earns £60,000 a year, but your declared income after expenses is £18,000.

A lender won't see the £60k. They'll assess affordability on the £18k.

At current rates, this could mean:

• Declared income £18,000 = Mortgage offer ~£80,000
• Declared income £35,000 = Mortgage offer ~£175,000

That's a massive difference.

How Many Years Do You Really Need?

Most lenders want two full years of self-employed accounts or tax returns.

However, some lenders accept just one year — ideal if you're newly self-employed but have a great first year and solid industry background.

This is where using a specialist broker really helps: we know which lenders to approach depending on your history.

Top Tips to Get Mortgage-Ready as Self-Employed

• Talk to your accountant before year-end to balance tax savings vs affordability
• Avoid over-inflating business expenses if you're planning to buy soon
• Keep personal and business finances separate
• Pay yourself consistently (especially if a Ltd Co director)
• Keep your credit score clean
• Work with a broker who truly understands self-employed lending

Why Work with Astute Mortgages?

We're based in Waterlooville and work with self-employed clients across Portsmouth and Hampshire every day. We understand the local market and the complexity of your income.

With access to independent lenders, we can match you with banks and building societies who:

• Accept one year's accounts
• Consider retained profits
• Understand contractors and freelancers
• Are self-employed specialist lenders

Book Your Free Self-Employed Mortgage Review

Whether you're a plumber in Portsmouth, a photographer in Petersfield, or a business owner in Havant, we can help.

Contact us today to book a no-obligation chat.

Let's make your income work for you and not against you.

Your home may be repossessed if you do not keep up repayments on your mortgage.