Let’s clear something up right from the start: yes, you can get a mortgage if you’re self-employed in Ireland. It’s not some myth reserved for accountants and unicorns. Getting a mortgage when you are self-employed is absolutely possible, and thousands of self-employed people, from freelancers and contractors to business owners, successfully get on the property ladder every year. The key? Preparation, correct documents, and the right support.
While the mortgage process might have a few more hoops for you than for PAYE applicants, those hoops aren’t insurmountable. With the right planning (see our mortgage ready guide for buyers), you can show lenders that your income is stable and be in pole position to get that mortgage approved.
Mortgage Rules: Loan-to-Income and Deposits
Whether you’re a freelance graphic designer, a plumber, or running your own tech startup business, the Central Bank of Ireland’s mortgage rules apply to everyone. If you’re self-employed and getting a mortgage, you’ll need to meet the same core requirements as PAYE workers:
- Loan-to-Income (LTI): You can typically borrow up to 4 times your gross annual income. This is the same rule that applies to PAYE applicants.
- Deposit Requirements:
- First-time buyers need a 10% deposit
- Second-time buyers need 20%
Self-employed applicants aren’t treated differently here, but you do need to prove your income clearly and consistently.
How Lenders Assess Self-employed Income
So, how do self-employed get a mortgage approved? This is where things get a bit more nuanced. Lenders want to see stability and sustainability and want reassurance that your income is steady and dependable. To do that, they usually assess your income based on:
- The average of your last two years’ income (some may require three)
- For sole traders and contractors, they look at your net profit
- For company directors, lenders typically assess your director’s salary and drawings, but retained company profits can be included in some cases (more on that later)
The key to getting a mortgage being self-employed is presenting a well-documented picture of your finances. Our planning documentation for mortgage approval can guide you through exactly what you’ll need.
Documents You’ll Need for Approval
When applying for a self-employed mortgage, one of the most important steps is preparing the right documents. Lenders need to see a clear and consistent record of your income. In addition to standard documents like photo ID, proof of address, and personal bank statements, self-employed applicants must provide extra paperwork:
- 6 months of business bank statements
- Revenue Form 11 – last 2 years; some lenders require 3.
(this is a copy of your revenue submitted tax return) - Chapter 4 Self-Assessments – last 2 years; some lenders require 3.
(this is your confirmation from revenue to confirm income and the tax paid/due) - Accounts: (last 2 years; some lenders require 3)
- Sole traders/partnerships: profit & loss accounts
- Limited companies: full company accounts
- Letter from your accountant confirming tax affairs are fully up to date
Clean, compliant, and complete paperwork makes all the difference. If Revenue is happy, your lender probably will be too.
Step-by-Step Application Process
Getting a mortgage when you are self-employed doesn’t have to be overwhelming. Don’t worry, you don’t have to walk this road alone. Here’s how the process usually works when you apply with the support of a Mortgage Broker:
- Speak with a mortgage broker who will provide advice on first steps.
- Prepare your documents with our expert help, of course! To avoid missing anything.
- Apply for Approval in Principle (AIP) underwritten approval. Avoid quick online AIPs which are not underwritten. You want an approval you can rely on.
- Go Sale Agreed on a property within your budget.
- Valuation and legal checks begin – the bank will assess the property, and your solicitor will review contracts.
- Drawdown – mortgage funds are released, and you get your keys!
Whether you’re self-employed or a freelancer getting a mortgage for the first time, having a broker on your side can make the journey smoother and give you peace of mind. We make the process manageable, transparent, and a whole lot less stressful.
Tips to Boost Your Approval Chances
Want to give yourself the best shot at mortgage approval when self-employed? Here are practical ways to boost your approval chances:
- Save a bigger deposit than the minimum 10% deposit to strengthen your application.
- Reduce outstanding debts such as car loans or credit card balances. (If you need a new car, wait until after your Home Purchase is completed)
- Keep your bank accounts clean – no bounced payments or excessive gambling transactions.
- Consider income protection insurance – not mandatory, but very reassuring to mortgage lenders.
These steps make a real difference when it comes to getting a mortgage being self-employed. We go into more detail on this over on our page about mortgages for the self-employed.
Example of Borrowing Power for Self-employed
One of the most common questions we hear is “how much can a self-employed person borrow for a mortgage?” Let’s break it down with an example.
Imagine you’re self-employed with the following net profits in your most recent 2 years:
- €76,500
- €85,500
Your average income is €81,000. (76.5k + 85.5k divided by 2)
Based on 4x LTI, your borrowing power would be around €324,000. You may be able to get more with a mortgage exception. Ask your mortgage broker.
This is the same rule that applies to PAYE applicants. However, here’s where it gets interesting: if you’re a company director and your company has retained profits and other income. Then this extra potential income could be added to your drawings, increasing your mortgage borrowing power.
For more detail, especially if you’re a first-time buyer, check out our first-time buyer mortgage details.
Special Cases and Exceptions
Self-employed life isn’t always straightforward. Lenders know this, and so do we. Ask your mortgage broker if the following applies to you:
- Just one year of trading? Some lenders may still consider you, especially if you can show a strong track record in your industry.
- Retained earnings in your company? These can help boost your borrowing power if your company could afford to pay you more.
- Fluctuating profits? A good broker will know how to present your financial history in the best possible light.
MortgageLine has access to lenders who are more flexible and understanding when it comes to self-employed mortgage applicants.
What Major Banks Usually Require from Self-employed Applicants
Whether you’re a freelancer, contractor, or company director, most major Irish lenders such as AIB, BOI, PTSB, Avant, etc. Will ask for:
- 2-3 years of Revenue Form 11s
- 2-3 years of full accounts
- Tax clearance certificate or letter from your accountant
- Business and personal bank statements
Having the correct documents ready will speed up your mortgage approval when you are self-employed. The more organised your application, the better your chances of approval.
Secure the Right Self-Employed Mortgage with MortgageLine
Getting a mortgage when you’re self-employed may feel more complicated than for PAYE workers, but with the right guidance and support, it’s very achievable. MortgageLine has decades of experience helping self-employed clients across Ireland navigate the process, whether you’re a sole trader, contractor, or freelancer.
From preparing your documents to negotiating with banks, we’re with you every step of the way. And if you’re curious about your potential monthly repayments, our handy mortgage payment calculator is a great place to start.
Contact us today for a free mortgage review call. Your future home might be closer than you think.
How MortgageLine Can Help Self-employed Applicants
Whether you’re a contractor, freelancing from your kitchen table or managing a team of twenty, we understand the unique challenges that self-employed applicants face. Our expert team knows which lenders are more flexible, how to present your income accurately, and what pitfalls to avoid. Here’s how we support you:
- We know which banks are more flexible with self-employed borrowers.
- We present your income accurately, whether you’re drawing a salary, dividends, or relying on retained profits.
- We guide you through every step, from approval in principle to drawdown.
With us, you won’t be navigating this alone. We will make sure your mortgage application is presented and managed professionally, using our expertise to give you the best foot forward.
FAQs
How long must I be self-employed for a mortgage?
Most lenders prefer at least 2 years of self-employment history, but some may consider 1 year with strong financials and industry experience.
Can freelancers or contractors qualify for a mortgage in Ireland?
Yes. Getting a mortgage as a freelancer or contractor is possible if your income is stable and well-documented. Lenders treat freelancers as self-employed applicants.
Will lenders count retained profits in my company?
Yes, if it can be shown that the company could afford to pay you more than your drawings, some lenders may factor retained profits into your mortgage calculation.
Do I need income protection to get approved?
No, it’s not a requirement. But income protection is highly recommended, especially for self-employed borrowers. It provides peace of mind and adds credibility to your application.
What if my last year’s income was lower?
Lenders average out your income over two years, so a slightly lower year isn’t necessarily a deal breaker. A broker can help present your case if there’s a good reason behind the dip.
