Self-Employed Income Calculator
See what income a lender will use from your last three years of accounts, and how much borrowing different averaging policies cost you.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Self-employed borrowers are assessed on an averaged figure rather than the most recent year, which penalises a growing business and protects a declining one. Two lenders looking at identical accounts can arrive at very different incomes purely because of their averaging policy.
Since the policy is a lender choice rather than a rule, knowing what each one does is worth more to a growing business than shopping on rate.
The four common policies
Averaging three years, averaging the last two, taking the lower of the latest year and the average, or using the latest year alone. Multiplying the assessed figure by the income multiple gives the borrowing, and comparing it against the latest year shows what the policy costs you.
Worked example
Incomes of 42,000, 55,000 and 68,000 average 55,000 across three years, while the latest year is 68,000. At a 4.5 multiple that is 247,500 against 306,000 — the averaging policy costs 58,500 of borrowing on identical accounts.
Which figure counts as income
For a sole trader it is usually net profit; for a company director it can be salary plus dividends, or salary plus retained profit with some lenders. That definition frequently matters more than the averaging policy, and it varies widely.
Turn a calculation into an enquiry
Buyers who run these numbers are ready to talk. Give every listing its own page with your photo, phone and WhatsApp on it — leads land straight on your phone.
Create your free property pageFrequently asked questions
How many years of accounts do lenders want?
Two or three is standard, with a small number accepting one for established professionals. Fewer years generally means a smaller lender panel and a higher rate rather than an outright refusal.
What if my latest year is lower than the previous one?
Most lenders will use the latest year, or the average if it is lower, so a declining income is assessed on the worse figure. Expect questions about the cause and evidence that it has stabilised.
Do retained company profits count?
With some lenders yes, for a director with a controlling interest, which can substantially increase assessable income where profits are left in the business. It is a specialist area worth a broker who knows which lenders allow it.