If you’re self-employed and planning to apply for a mortgage, it’s a good idea to crunch the essential numbers first, and for that, a regular old mortgage calculator isn’t going to cut it.
As someone who trades in a specific way, you will need a specialist self-employed mortgage calculator, and fortunately for you, we have built one that is tailored to your needs.
Select your trading style on our calculator tool at the top of this page to work out your mortgage affordability.
Why this tool is different to a regular mortgage calculator
The mortgage calculator you will find on this page is specifically designed to meet the needs of self-employed individuals. As mortgage affordability is calculated differently for people who trade this way, a bespoke tool is needed to get an idea of how much they can borrow.
While a regular mortgage affordability calculator will simply multiply your annual income by anywhere between 4 and 6 to estimate your maximum borrowing, this tool uses specific calculations for each of the main self-employed trading styles: sole trader, partnership, company director and contractor to return more accurate results.
How our self-employed mortgage calculator works
Our self-employed mortgage calculator lets you choose your trading style from a preset list and returns tailored affordability results based on the way you earn your money.
Here is how it works for each of the available trading styles:
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Sole trader: Set the number of years you have been trading for and your latest year’s profits and our calculator will tell you how much you can potentially borrow.
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Partnership: Set the number of years you have been trading for, your latest year’s profits and your shareholding percentage and our calculator will do the rest.
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Company director: Set the number of years you have been trading for and either your latest year’s salary and dividends drawn or your retained profits for the last 12 months and our self-employed mortgage calculator will do the rest.
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Contractor: Enter your day rate and the number of days per week you work and our calculator will provide bespoke affordability calculations for contractors.
Once you have entered your income details, our calculator will work out an average of your earnings over the trading period specified and return results for each of the main income multiples that UK mortgage lenders use, which range between 4.5 and 6 times salary.
Most mortgage lenders will simply multiply your average income over the last 2-3 years by 4.5 to work out your borrowing limit, but a few lenders might offer between 5 and 6 times that figure, if you have a particularly strong application.
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Example calculations
The tables in this section show example calculations for each of the four self-employed trading styles to give you an at-a-glance estimate of how much you could borrow.
Sole trader
The table below shows typical mortgage calculations for a sole trader based on income amounts ranging between £30k and £75k per year.
|
Net Profit (Annual) |
Income Multiple |
Borrowing Potential (Max) |
Est. Monthly Repayments* |
|
£30,000 |
4.5x |
£135,000 |
£713 |
|
£45,000 |
4.5x |
£202,500 |
£1,069 |
|
£60,000 |
4.5x |
£270,000 |
£1,425 |
|
£75,000 |
4.5x |
£337,500 |
£1,782 |
Partner
The calculations below were drawn up based on example net profit income and a lender using the standard 4.5 times annual salary income multiple.
|
Share of Profits (Annual) |
Income Multiple |
Borrowing Potential (Max) |
Est. Monthly Repayments* |
|
£40,000 |
4.5x |
£180,000 |
£950 |
|
£55,000 |
4.5x |
£247,500 |
£1,306 |
|
£70,000 |
4.5x |
£315,000 |
£1,663 |
|
£85,000 |
4.5x |
£382,500 |
£2,019 |
Company director
These example calculations are for a company director based on the salary they have drawn plus dividends and an income multiple of 4.5 times annual salary.
|
Salary + Dividends (Annual) |
Income Multiple |
Borrowing Potential (Max) |
Est. Monthly Repayments* |
|
£50,000 |
4.5x |
£225,000 |
£1,188 |
|
£75,000 |
4.5x |
£337,500 |
£1,782 |
|
£100,000 |
4.5x |
£450,000 |
£2,375 |
|
£125,000 |
4.5x |
£562,500 |
£2,969 |
Contractor
This table shows example calculations for a contractor working a five-day week for 48 weeks of the year, based on the standard 4.5 times income multiple.
|
Daily Rate |
Annualised Income |
Borrowing Potential (4.5x) |
Est. Monthly Repayments* |
|
£350 |
£84,000 |
£378,000 |
£1,995 |
|
£500 |
£120,000 |
£540,000 |
£2,851 |
|
£650 |
£156,000 |
£702,000 |
£3,706 |
|
£800 |
£192,000 |
£864,000 |
£4,561 |
Note on Repayment Calculations: These estimates are based on a 25-year term at a 4% interest rate (standard market average used in the reference articles). Actual rates and borrowing limits depend on credit score, deposit size, and specific lender criteria.
Benefits of this calculator
The main benefit of using this calculator is that it is specifically tailored to self-employed mortgage applicants, while regular mortgage calculators are not. If you were to use a standard affordability tool, the results would not be specific to the way you trade.
Self-employed mortgage calculators like this one are a great starting point on your mortgage journey, giving you a good idea of the amount you can borrow and the overall cost.
This will help you plan ahead and give you an idea of what to expect when a lender reviews your borrowing capacity, but keep in mind that no calculator is 100% accurate.
Although our calculator provides more tailored figures for sole traders, partners, company directors and contractors than regular mortgage calculators, these figures are not bespoke to you as an individual and may differ from the calculations your lender arrives at.
This is why it’s a good idea to speak to a broker who specialises in self-employed mortgages before you apply for one - they can draw up calculations that are bespoke to you and advise you on all of the available options based on those numbers.
Why choose Money Helpdesk for your mortgage needs?
Aside from providing you with bespoke calculations and expert advice about how to act on them, our mortgage brokers are whole-of-market and specialise in helping self-employed people achieve their finance goals.
Here are just some of the reasons why self-employed mortgage applicants choose us:
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Exclusive rates and deals are available
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Our mortgage brokers have access to the entire market
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We are five-star rated on leading review websites
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You can secure an agreement in principle in minutes
Ready to take advantage of a free, no-obligation chat with a mortgage broker who specialises in self-employed borrowers? Get started here.
FAQs
The calculator allows you to specify the number of years you have been trading. It then works out an average of your earnings over that period to provide a more accurate estimate of what a lender might offer you.
Most mortgage lenders will need at least 2 years’ accounts to calculate your affordability, but a minority will be happy to proceed with your application with 12 months’ trading history.