Can I get a mortgage with
one year's accounts?

The short answer.

Most lenders want two years of self-employed figures. A smaller group will consider one full year, particularly when the rest of the picture is solid: steady income, a clean credit file, a reasonable deposit and, ideally, a track record in the same line of work before you went self-employed.

One year of accounts narrows your choice of lender. It doesn't rule you out. The work is in finding the lenders whose criteria fit your history before you apply, rather than finding out through a decline.

What counts as one year of accounts.

Lenders generally mean one complete trading year with finalised figures, not twelve months since you started. What "finalised" means depends on how you trade: for sole traders it's a submitted tax return, for limited companies it's the finished year-end accounts. Some lenders have their own requirements on top, such as accounts being prepared by a qualified accountant or filed at Companies House.

• Sole traders and partners

  One tax year's Self Assessment return, submitted to HMRC, evidenced by the SA302 and matching Tax Year Overview. If you started part-way through a tax year, that first short year may not be enough on its own for some lenders.

• Limited company directors

  One full year of finalised company accounts, usually alongside your personal tax return showing the salary and dividends you drew. Draft or management accounts are not normally accepted in place of finalised ones. Your company year-end and the tax year may not line up, so the most recent figures a lender can use depend on both.

• Contractors

  Many contractors aren't assessed on accounts at all. Some lenders work from your current contract and day rate instead, which can matter more than how many years you've traded. See less than one year below.

Who is most likely to be accepted.

With limited history, lenders are looking for evidence that your first year wasn't a one-off. You're in a stronger position if:

• You're doing the same work you did when employed

  A PAYE electrician who goes freelance, or an employed accountant who sets up their own practice, shows continuity. This is the single biggest factor for many lenders.

• Your income is steady and evidenced

  Regular income through your business bank account, repeat clients or ongoing contracts all help show the year's figures are sustainable.

• Your credit file is clean

  With less trading history to go on, lenders lean more heavily on how you've managed credit.

• You have a reasonable deposit

  A larger deposit reduces the lender's risk and can open up more options, although it won't replace the need for finalised figures.

• Your accounts are prepared by a qualified accountant

  Some lenders ask for this, or for an accountant's reference, particularly with limited history.

The trade-offs.

Being honest about the downsides saves time later:

• Fewer lenders

  A smaller pool means fewer products to choose from, so the very cheapest deal on the market may not be available to you.

• Closer scrutiny

  Expect more questions about your business, your bank statements and your plans. Having the answers ready makes a real difference.

• Possibly lower borrowing

  One year's figures give a lender less to average, and some cap the loan-to-value or the income they'll use where history is short.

• Waiting can be the better option

  If your second year is nearly finished and likely to be stronger, applying once those figures are finalised can widen your choice considerably. Sometimes the right advice is to wait a few months.

If you have less than one year.

Options narrow further, but a few routes exist:

• Contractors on a day rate

  Some lenders assess contractors on an annualised day rate, working from your current contract and recent contract history rather than accounts. The exact calculation and requirements vary by lender.

• Moving from employment into the same field

  A small number of lenders may consider applicants with limited self-employed history if there is a clear, recent track record in the same work. It's case by case.

• A joint application

  If you're buying with someone in employment, their income may carry the application while your self-employed income builds a track record.

• Genuinely new ventures

  If you've started a new type of business with no previous experience in it, most lenders will want to see at least the first full year's figures. Planning towards that date is usually the realistic route.

How to prepare.

1. Get your figures finalised.

   Sole traders: submit your tax return, then download your SA302 and Tax Year Overview from your HMRC online account. Directors: get finalised year-end accounts from your accountant, plus your personal tax return.

2. Keep business and personal money separate.

   Lenders usually ask for recent personal and business bank statements. Clear, separate accounts are much easier for them to read.

3. Avoid new credit before you apply.

   Hold off on new loans, finance agreements or credit cards in the months beforehand, and keep existing payments up to date.

4. Speak to your accountant about timing.

   How you draw income, and when your figures are finalised, can affect what lenders assess. Your accountant can advise on the tax side.

5. Get advice before you apply.

   A full application usually leaves a hard search on your credit file, and several in a short period can make later ones harder. It's worth knowing which lenders are likely to consider you before any application is made.

Common questions.

• Will I pay a higher rate with only one year's accounts?

  Not necessarily. Where a mainstream lender accepts one year's figures, the rates are often the same as for other applicants. The bigger difference is choice: fewer lenders will consider you, so there are fewer products to compare.

• Can a lender use my projected income instead?

  Most lenders work from finalised figures, not forecasts. A strong pipeline of work can support your application, but it won't usually replace a completed year with finalised figures.

• How soon after my year-end can I apply?

  Once your figures for that year are finalised. For sole traders, that means submitting your Self Assessment return so the SA302 and Tax Year Overview can be downloaded from HMRC. For limited company directors, it means your year-end accounts being finished by your accountant, alongside your personal tax return. You don't have to wait for the January deadline: you can file from 6 April, straight after the tax year ends.

• I have one year of accounts and a partner in employment. Does that help?

  Often, yes. On a joint application lenders assess both incomes, so a partner's employed income can carry much of the borrowing while your self-employed income adds to it. It can also widen the lenders available to you.

Talk through your figures →

Sources: GOV.UK: Get your SA302 tax calculation · GOV.UK: Self Assessment deadlines. Lender criteria described here are general market practice and vary between lenders.

Your home may be repossessed if you do not keep up repayments on your mortgage. This guide is general information, not personal mortgage advice. Lender criteria change and vary between lenders. For advice on your specific situation, request a free chat.