Best Self-Employed Mortgage Rates Comparison

When it comes to applying for a self-employed mortgage there are nuances in the process and it can often be thought that such applicants won’t be able to find as good an interest rate deal as those who are employed.

But that’s not necessarily true. This article breaks down what the current interest rates are for self-employed mortgage applicants, how they might be impacted if you’re working as a contractor and how to compare the best self-employed mortgage rates currently available.

The table below shows some of the best interest rate deals currently available if you’re self-employed.

The rates quoted above were correct at the time of writing (April 2023) and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time.

What interest rate would you currently expect to pay for a self-employed mortgage?

As of April 2023, the average rate sits between 4.5% and 5%, depending on your loan-to-value (LTV). As long as you have been working in this capacity for over 3 years with the paperwork to prove it, being self-employed doesn’t necessarily mean incurring a higher interest rate.

The pool of lenders, however, may be slightly smaller than if you were an employee because some view the potential instability of self-employed as risky. This may indirectly affect the rates you can get but the main influencing factors on the rate you’re offered will be your deposit and credit history.

Having a history of self-employment, the necessary paperwork, good credit and a healthy deposit will increase your chances of securing a lower rate. Should you have a low deposit, bad credit, and only 1 or 2 years of accounts, or even none at all, you should expect a higher rate and seek expert help in finding a good self-employed mortgage deal.

How a mortgage broker can help you compare the best interest rate deals

The table above is just a sample of what mortgage deals for the self-employed are currently available. There are many more out there which means undertaking a self-employed mortgage comparison alone could take a long time.

In order to save you time and the possibility of paying a higher interest rate than necessary, it’s best to work with a specialist mortgage broker who understands the self-employed mortgage market.

They’ll be able to:

• Tap into their experience of applying for self-employed mortgages on a regular basis and share which mortgage lenders they know to be offering competitive rates.
• Talk you through the current best fixed rate mortgage deals for the self-employed versus the variable rate deals and discuss with you which, as a self-employed person, might be best.
• Provide advice on how to address any issues with your application — such as having less than a 3 years’ worth of accounts or a low deposit — that could result in a higher interest rate.

If you get in touch we’ll arrange for a specialist mortgage broker we work with, who has experience in this area, to contact you straight away.

Are mortgage rates any different for contractors?

No, not really. As long as you have the right paperwork that shows a history and prospects of work and income and an adequate deposit, there’s no reason why a contractor – whether a freelancer, consultant or agency worker – couldn’t get the same rate as an employee.

Just like with self-employed mortgages though, some lenders may not offer contractor mortgages because the short-term nature of the work presents too high a risk for them. Others such as Halifax, Bluestone Mortgages and Natwest do but may have stipulations as to the type of contract work and request evidence of at least 3 years working in this capacity.

In order to find a lender that offers competitive contractor mortgage rates and is likely to say yes to your application, team up with a broker. They can save you a lengthy search by already knowing where to find the UK best contractor mortgages.

Are there any specific remortgage rate offers for the self-employed?

No, there aren’t specific remortgage deals for the self-employed but you should expect the number of lenders offering such deals to be smaller and this may mean less competitive interest rates.

To get the lowest rate possible, like in your initial application, you’ll need to submit extensive paperwork, including tax returns and SA302s, so that a lender can assess your financial situation and improving your credit history and lowering your loan to value ratio will boost your chances of securing a rate closer to the 4% mark.

Why Use Online Money Advisor?

The brokers we work with know what interest rate you should be securing as a self-employed person, can perform the mortgage comparison for you and connect you to specialist lenders you may not have heard of.

Using our free broker-matching service, you’ll be able to increase your chances of securing a mortgage rate you’re happy with and do so with the reassurance that being self-employed didn’t hinder your application.

To enjoy an initial consultation with a self-employed mortgage specialist, call 0808 189 0463 or fill out our form.