The average maximum mortgage size for independent applicants was £ 221,000 last month, down more than 5% since June and the lowest level since February.
While the lowest average loan amount available to the self-employed fell to £ 90,452 last month, plunging almost 17% since June and the lowest level since November last year.
The index adds that fewer self-employment cases were considered affordable by lenders, with 67% of applications from this category of workers passing this test, the lowest level since February.
There are 4.4 million self-employed people in the UK, according to the latest data from the Office for National Statistics released in May.
Overall, in July, 72% of mortgage applications were deemed affordable, which is the lowest level since June 2020, according to the index.
The average maximum loan fell from £ 243,250 in June to £ 243,055 in July, while the average minimum loan fell by 3%.
The data used by the index is taken from real cases processed by the Mortgage Broker Tools advisor research platform, which collects accessibility results from over 60 lenders and search criteria from over 100.
Tanya Toumadj, Managing Director of Mortgage Broker Tools, said: “It is clear that self-employed workers continue to struggle to demonstrate the affordability they need from some lenders, with both the average size of loans available and the percentage of affordable cases falling to their lowest level in months.
Likewise, while the average size of available loans has remained relatively stable across the market as a whole, the number of lenders who find applications affordable has also fallen to its lowest level since last summer.
“So how do we interpret these results?
“First, it’s important to recognize that more often than not there is at least one affordability option to meet a client’s requirements, whether or not they are self-employed.
“However, we are seeing a growing discrepancy in how lenders calculate the different elements of affordability and this is leading to more dissemination of the results.
“It is therefore more important than ever that brokers conduct comprehensive and accurate research into affordability and criteria before starting an application. This can mean the difference between a successful mortgage application or one that falls at the first hurdle. “