Agreement in Principle Self-Employed

Podcast approved by The Openwork Partnership on 12/06/2025

Can you get an Agreement in Principle if you’re self-employed?

Yes, you can get an Agreement in Principle (AIP) if you’re self-employed. An AIP provides a preliminary indication of how much you could borrow, based on your income and other factors – without affecting your credit score.

Of course, it’s not a guarantee of a mortgage, but it helps you to understand your borrowing capacity and budget accordingly.

Is it harder to get an Agreement in Principle if I’m self-employed?

No, it’s no more difficult for self-employed individuals compared to those with salaried income. The process is generally the same, but self-employed applicants may just need to provide additional documentation to prove their income and assess affordability.

How is self-employed variable income assessed for an Agreement in Principle? Can I use more than one source of income when I apply for an AIP?

For an AIP, self-employed variable income is typically assessed by average net profits, which, just to remind you, is income minus expenses over the last two to three years.

We do have some lenders that go a bit further and will accept just one year’s tax return and tax year overview. Multiple income sources can be included, such as bonuses, commissions, overtime, freelance work or investment income – if supported by documentation, of course.

How is affordability calculated for an Agreement in Principle for self-employed borrowers?

It’s pretty much the same as for salaried applicants, but affordability is primarily assessed by looking at the borrower’s average annual income, typically over the last two or three years.

Lenders then typically use an income multiple of four, 4.5 or sometimes as much as 5.5 times your average earnings. Some could go higher, but it depends on the specific circumstances and the lender’s criteria.

What information do self-employed borrowers need to provide when applying for an Agreement in Principle?

You typically need to provide evidence of your income over the past two years, including certified accounts, SA302 forms and a tax year overview. Lenders will need documents demonstrating your ability to afford the mortgage, such as bank statements, and also proof of deposit.

How reliable is an Agreement in Principle? How long is an Agreement in Principle valid if I’m self-employed and my income changes?

An Agreement in Principle for a mortgage is not a guarantee for the full mortgage offer, but it’s a strong indicator how much you are able to borrow.

It typically lasts between 30 and 90 days, or sometimes 180 days – it really depends on the lender. If you’re self-employed, a change in income during an AIP validity period could affect its accuracy and may require you to reapply.