Freelance finance downsides

6th Sep, 2024

An incomplete list of freelance finance gotchas I’ve experienced in relation to parental leave and mortgage applications.

Obvious disclaimer: these all things I’ve heard about or directly experienced. Your mileage may vary.

Parental leave

Mortgage calculations

When it comes to mortgage applications and the borrowing limits, self-employed people are penalised for income variability on all fronts.

For instance, if your income:

Self-employed people lose in both situations. You could have many years of stable income, reduce income in one year, then find your mortgage options are significantly limited.

PAYE

Many people who work for themselves take some on PAYE work, either out of choice or because the employer refuses to work with people on a self-employed basis.

Self-employed people often find themselves on a zero-hours contract with fluctuating PAYE income. For mortgage applications, this can be risky for lots of reasons: