How to get a mortgage if you’re self employed
If you run a business or work for yourself, getting a mortgage can be tricky. Here’s how to secure a mortgage when you’re self-employed in Ireland.
Why can it be difficult to get a self employed mortgage?
Because a self-employed mortgage can be a larger financial risk for a lender.
As a company owner you are more exposed to income instability. For example if your business fails, there is a recession, or you become ill and unable to work.
Whether you’re a first time buyer or switching your mortgage, there are a few extra hoops to jump through when you’re self-employed.
Be prepared to provide more information about your income, trading accounts and business performance.
Issues tend to arise around:
While this can make it harder to get the mortgage you want when you’re self employed, it’s still possible.
What counts as self employed?
Being classed as self employed for lending purposes usually includes being:
- Self employed e.g. freelance
- A sole trader
- A Director of a Company
- A Director of a Partnership
These are all roles where your income is more directly related to the performance of your business, unlike employees who have a contract that states an income.
How long do you have to wait before applying?
You’ll need to be able to show a consistent income to any potential mortgage lender. Exactly how long you’ll need to have been self employed will vary, but the absolute minimum is usually one year. Many lenders ask for at least two or three years of audited accounts.
Can you get a joint mortgage if just one person is self employed?
Yes, the same rules apply if you are borrowing with another person. Whoever is self employed will still need to be able to provide the documents the lender requests to prove their income.
The income of the person who is employed will be included in the affordability calculations as normal.
What do you need to give lenders?
The information you’ll need to supply varies depending on the mortgage lender you choose, but it usually includes:
You’ll also need to supply the usual identification documents to prove your identity during your application.
Can I self certify my accounts?
This depends on the lender. Most require a qualified accountant to certify your audited accounts.
Some lenders may allow you to self certify your accounts, if you can supply a revenue balancing statement.
If that’s the case, it’s best to check what else they need to support your application before you apply,
What documents different lenders in Ireland ask for:
| Lender | Business accounts | Bank statements | Revenue forms |
|---|---|---|---|
| AIB | 2 years, certified by accountant* | 6 months** | 2 years* |
| Bank of Ireland | 2 years, certified by accountant | 6 months | Not stated |
| EBS | 2 years, certified by accountant* | 6 months** | 2 years* |
| Finance Ireland | 2 years, certified by accountant | 3 months | 2 years* |
| Haven | 3 years, certified by accountant*** | 6 months** | 3 years |
| ICS Mortgages | 2 years, certified by accountant | 6 months | 2 years |
| PTSB | 2 years, certified by accountant | 6 months | Not stated |
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* Revenue forms or 3 years of most recent audited accounts or trading accounts (certified by your accountant) may be required in certain circumstances. ** 3 months if you are switching to AIB to topping up your AIB/EBS/Haven mortgage. *** Not required for a director/sole-trader if turnover is below 3 million.
Most lenders will also ask for confirmation of your tax position from your accountant.
How to make it easier to get a self employed mortgage
The best way to increase your chances of being approved for a mortgage is to be prepared, especially if you’re self employed.
Some of the steps you should take include:
- Preparing your documentation: Speak to your bank to request bank statements and check how long they’ll take so you’re not left waiting at the last minute.
- Getting the right accountant: An experienced accountant can make a big difference. They’ll guide you through the application and ensure you’ve got all the right documentation. Most lenders also require an accountant to certify your accounts and confirm you’re tax compliant.
- Reducing your debts: Paying off your loans and credit cards can improve your affordability in the eyes of potential lenders. This can be more important if you’re self employed as proving your income is harder.
- Opt for mortgage protection insurance: This is arguably more important if you’re self-employed. You’ll also need to consider what other insurance you need with your mortgage and how much stamp duty you’ll need to pay as well.
- Save a larger deposit: Putting down a larger mortgage deposit means you can borrow less money, be less of a risk to the lender and show them a good financial habits and saving ability.
For more tips, read our guide: How to prepare for a mortgage application.
What’s next?
Once you’ve done these steps you could then apply for a mortgage approval in principle.
This shows you’ve passed lenders initial checks and gives you a better idea of how much you can borrow when looking for a property.
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Self employed mortgage FAQs
How much can you borrow if you're self employed?
You can find out more about how much you could borrow by reading our guide: How much can I borrow?
What banks offer self employed mortgages in Ireland?
Most of the mortgage lenders in Ireland will offer mortgages to self employed borrowers, however their lending requirements will vary so always carefully check before you proceed.
You can find a full list of the latest mortgage deals here.
