Securing a mortgage has never been a one-size-fits-all process. In 2025, the divide between how lenders view self-employed borrowers and limited company directors has become sharper, with new regulations, evolving underwriting practices, and shifting market conditions all shaping outcomes.

If you run your own business, whether as a sole trader, freelancer, or company director, understanding how lenders approach your income is crucial. The difference could mean access to more favourable rates, higher borrowing potential, or even the ability to proceed with your property plans at all.

In this article, we’ll explore the key differences between mortgages for the self-employed and for limited company directors in 2025, the common hurdles each group faces, and how you can position yourself to get the best possible result.

The Current Lending Landscape in 2025

The UK property finance market has adapted significantly to ongoing economic uncertainty. Inflationary pressures and the Bank of England’s cautious approach to interest rates have tightened affordability checks. As we explored in our article How Mortgage Underwriting Has Changed in 2025, lenders are scrutinising applications more carefully than ever, particularly when it comes to non-standard income sources.

For employees with regular payslips, this poses fewer issues. But for business owners and freelancers, the challenge lies in proving consistent, reliable income.

Self-Employed Borrowers: Challenges and Opportunities

Self-employed applicants—including sole traders, freelancers, and partners—often encounter stricter requirements because their income can appear more volatile. Most lenders typically ask for two to three years of tax calculations (SA302s) and HMRC overviews, although some specialist lenders may consider one year of accounts.

The biggest challenge is smoothing out fluctuations in income. A single bad year can pull down your average, limiting what you can borrow. This is particularly difficult for industries prone to variable earnings, such as creative freelancing or consultancy work.

Another hurdle is how expenses are treated. While maximising expenses can reduce your tax bill, it can also significantly lower your “declared” income in the eyes of a lender. For instance, if you deduct travel, equipment, or home office costs, you may appear less profitable, reducing your mortgage affordability.

For more on this issue, see our blog on Mortgages for Self-Employed Borrowers in 2025.

Limited Company Directors: A Different Set of Rules

Directors of limited companies face their own set of challenges. Instead of looking solely at personal income, lenders may consider a combination of salary, dividends, and sometimes retained profits within the business.

For directors who keep profits in the company for tax efficiency, this can work in their favour. Certain specialist lenders will allow affordability to be calculated using net profit before tax, not just what has been drawn as salary and dividends. This can significantly boost borrowing capacity.

However, not all lenders are as accommodating. High-street banks often stick rigidly to salary plus dividends, which can disadvantage directors with low personal drawings. This is where specialist and private lenders can make a real difference. For a deeper dive into these lender differences, our guide on High Net Worth Mortgages in 2025 explores how private banks approach more complex income structures.

Comparing the Two: Key Differences

The crucial distinction lies in documentation and income recognition:

• Self-Employed (Sole Trader/Freelancer): Lenders mainly assess net profit after expenses as shown on tax returns.

• Ltd Company Director: Some lenders consider retained profits and net business income, alongside salary and dividends.

For many directors, this means better access to higher borrowing limits—if they use the right lender. For the self-employed, the focus is instead on maintaining consistent, verifiable profits and minimising fluctuations.

Where Each Group Struggles in 2025

Self-Employed:

• Income volatility is magnified under tighter underwriting.
• Reliance on SA302s and overviews can penalise those with aggressive expense strategies.
• Specialist lenders can help, but rates are often less competitive.

Company Directors:

• Borrowing power may be restricted if relying solely on salary + dividends.
• Lenders vary widely in how they treat retained profits.
• Complex company structures (e.g., holding companies, SPVs) add another layer of scrutiny.

If you’re unsure how lenders will view your situation, our blog on LTV, LTC, and GDV explains how these core calculations affect borrowing strategies across different structures.

Strategies to Improve Your Mortgage Options

Regardless of whether you’re self-employed or a director, preparation is key:

• Organise your accounts: Up-to-date, professionally prepared accounts signal stability.
• Work with a specialist accountant: Align tax efficiency with mortgage planning.
• Choose lenders carefully: High street banks may not offer the flexibility you need. Whole-of-market brokers can open doors to lenders who assess income more favourably.

We’ve seen similar principles apply in Debt Consolidation with Property Finance, where tailoring lender selection makes all the difference.

How Willow Can Help

At Willow Private Finance, we work with both self-employed professionals and limited company directors daily. Our whole-of-market approach means we aren’t tied to one lender’s criteria. Instead, we look across the spectrum—from specialist providers to private banks—to identify solutions that reflect your real financial capacity, not just what’s on paper.

Whether you’re a freelancer with variable earnings or a director retaining profits in your business, we can design a strategy that maximises your borrowing power and aligns with your long-term property and financial goals.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We’ll help you find the smartest way forward—whatever rates do next.