Self-Employed Mortgages

Not necessarily. Many lenders understand that incorporating is a natural step for a growing business. If your line of work remains the same and you hold a majority share in the new company, several lenders will treat your trading history as continuous. You will typically need to provide your previous Sole Trader accounts alongside your new Limited Company records to prove the business is sustainable, but you often won't need to wait for two full years of new company accounts.

If your profits are declining, lenders will take a more cautious approach to ensure the loan is affordable. Instead of calculating your maximum borrowing based on an average of your last 2-3 years, they will almost always base their offer on the latest, lower figure. If the drop in profit is significant, the lender may also request a brief explanation or a projection from your accountant to confirm that the business remains viable.

Yes, this is a specific advantage for Limited Company directors. While high-street lenders typically calculate affordability using only your salary plus dividends, specialist lenders can look at your share of the company's net profit (before dividends are distributed). If you choose to leave earnings in the business for tax efficiency, finding a lender who accepts retained profits can significantly increase your maximum borrowing amount compared to using salary and dividends alone.