Mortgages for the self-employed and freelancers

Imagine you run your own business. Some months sales go well, other months money is tighter. When you apply for a home loan, the bank therefore goes through your papers with extra care. They want to see whether you can repay, whether the home can be used as security, and how your finances look over time.

As a self-employed person, you often have to document your income with several years of accounts, whereas an employee can typically manage with payslips and annual tax statements. The bank knows that your income fluctuates. They do not look only at this year’s figures; they assess stability, operations and whether you keep on top of agreements, tax and debt. Documentation weighs more heavily for you.

Not to worry. Here is a guide to what banks look for in 2026, what requirements you face as a self-employed home buyer, and what options you have if the process seems overwhelming.

What the bank looks at when you apply as self-employed

When you apply for a home loan as a self-employed person, the bank asks for specific documentation so that they can assess your finances properly. They want to see annual reports or annual accounts for the last 2-3 years, with an income statement, balance sheet and notes, for both the business and any holding company. Those figures show trends, earnings, assets and debt.

Your personal finances count just as much. Have your annual tax statements, eIndkomst (the Danish income register) and preliminary tax assessment ready. Also share monthly bank statements from the last six months to a year, so the bank can see incoming payments, fixed expenses and private spending. It gives a realistic picture of cash flow.

If the accounts are not subject to mandatory audit, the bank often asks for an accountant’s statement. It acts as a seal of quality on the figures and makes it clear whether there are uncertainties or reservations. The aim is to strengthen confidence in the material you submit.

The bank wants a picture of the present, not just history. Bring your figures up to date with interim balance sheets, a trial balance and an expected full-year budget, so they can see how the business is doing right now.

Also draw up a complete overview of debt, collateral and assets, both private and business. Include credit card debt, car loans, business loans, pledges and leasing agreements. Attach documentation of savings and pension. The bank uses this information to assess your whole financial situation, both your obligations and your assets.

How the bank calculates your income from owner salary, profit and dividends

The bank assesses your income differently depending on whether you have an ApS/A/S (limited company) or a sole proprietorship. If you run a company, they look mainly at your fixed salary as owner and any dividends. The figures are adjusted for one-off items and special circumstances, so the picture of your real income is more accurate. Large one-off sales or extraordinary expenses therefore do not count in full.

If you have a sole proprietorship, the bank looks at the taxable profit before interest. They adjust for your private withdrawals, so the disposable amount reflects what you actually have for private spending. If private spending exceeds what the profit can bear, it raises doubts about whether your finances are sustainable.

The assessment is often based on an average of two to three years to create stability. The most recent year carries the most weight, especially when the industry fluctuates or results vary. In cyclical industries, the bank often adjusts expected income downwards to allow for uncertainty.

There are also technical adjustments:

1. Depreciation is partly added back into cash flow, because it affects profit but not liquidity here and now.

2. Inventory and receivables are assessed at their liquidity value, and large swings in inventory can point to cash flow problems.

3. Dividends only count as secure income if the company has historically paid them out without putting pressure on operations.

An example: the owner of an ApS (limited company) received a salary of 400.000 kr. and dividends of 100.000 kr. after a year with a single large order. The bank strips out the one-off effect and looks at the average over several years to arrive at a realistic income to lend against. Another owner with a sole proprietorship had a taxable profit of 500.000 kr., but withdrew 600.000 kr. for private use and spent a lot of cash without documentation. The bank will ask questions and will probably set the disposable income lower than the profit suggests.

Use the business tax scheme correctly and get your accountant’s statement in order

Your bank looks first at your personal liquidity. The tax advantages of the business tax scheme (virksomhedsordningen) do not impress the bank on their own if the money has not been withdrawn for private use. Profit that you save up in the business is only taxed provisionally at the business tax rate, and the rest of the tax is deferred until you withdraw the money. However, the savings do not count towards your disposable income until you actually take the money out.

If you pay for private spending through the business, the line between business and private must be razor-sharp. The bank will often want to see a detailed breakdown so that your real disposable income can be calculated correctly. Without that breakdown, the assessment of your finances becomes uncertain.

Withdrawals under the business tax scheme should look stable over time. A fixed owner salary or regular private withdrawals point to stable income, and that strengthens your borrowing options.

An accountant’s statement without reservations strengthens credibility. If the statement contains reservations or a remark about uncertainty over the business’s continued operation (going concern), the bank typically tightens its requirements or cuts the loan limit. A sharp accountant helps with both the accounts and the documentation.

Also have a budget and sensitivity analysis prepared by your accountant. Show, for example, what your finances look like if turnover falls by 20 %. This shows the bank that the business can withstand fluctuations without problems meeting the loan payments.

Here is some good advice for working with the bank and the accountant:

• Make sure there is a clear separation between private spending and business expenses in the bookkeeping

• Document all private withdrawals clearly over several years

• Get regular accountant’s statements without negative remarks

• Ask for budgets with realistic scenarios, including downturns

• Be open about any fluctuations in income, so the bank does not get surprises later

A self-employed person with an ApS has the accountant prepare a statement without remarks and a budget that shows resilience to a fall in turnover. This gives the bank figures it can trust, and makes the case easier to assess.

Checklist for your loan application, and what to do after a rejection

Being self-employed and applying for a home loan is demanding. It becomes far easier when your finances are clear-cut and simply explained. Show stability in earnings, keep private spending on track, and make it easy to see how money flows in both the business and your personal finances. That way, your chances of a yes go up.

Checklist for a strong loan application:

1. Show 6-12 months of stable cash flow from the business.

2. Put private spending on autopilot with a budget and fixed transfers to separate accounts.

3. Cut out expensive debt before applying, especially credit cards and high-interest loans.

4. Ideally have 10-15 % as your own contribution, which is more than the 5 % you need as a rule, and have all purchase costs covered.

5. Keep business and private transactions clearly separate in the accounts.

6. Have your accountant quality-assure the figures and prepare realistic budgets with scenarios.

7. Choose 2-3 banks or advisers who know your industry well, rather than sending the application out widely.

Rejections are often due to a short operating history of under two years, negative equity or heavy reliance on a few customers. Arrears, debt collection and a disposable income below the bank’s minimum also pull the assessment down.

If you are turned down, do not give up on the plan. Look for a cheaper home, or make a larger down payment. Find a co-applicant with a steady salary, or wait six months to a year while you document improvements.

Also keep the business separate from your private finances. If the business needs credit, you should take it out as a separate business credit facility, so your private finances stay clean and easy to follow.

The key is focused preparation. Gather the documents properly, have your accountant review them, and target banks that know your industry and your situation. With patience and structure, you move closer to approval. Start the work now.