Contractor Mortgages UK
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Yes, you can get a mortgage as a contractor, and often at the same rates as someone in a permanent job. The difference is how your income is assessed: many lenders will work from your day rate rather than from payslips or two years of accounts. This guide explains how contractor mortgages work, how much you could borrow, what lenders ask for and how to prepare before you apply.
What is a contractor mortgage?
A contractor mortgage is a mortgage for someone who works on fixed-term or short-term contracts rather than as a permanent employee. That includes day-rate contractors in IT, engineering, finance and the public sector, construction workers paid under the Construction Industry Scheme (CIS), people paid through an umbrella company and agency workers on rolling contracts.
The mortgage itself is the same product anyone else applies for. What differs is how the lender works out what you earn. Most high street lenders now consider contractors, and many will base their decision on your contract rate rather than on payslips or your accounts.
How a lender classes you matters. Whether you trade as a sole trader, through your own limited company or via an umbrella company changes which lenders suit you and what they ask to see. That is where a broker who deals with contractor cases earns their keep.
How do contractor mortgages work?
Standard mortgage underwriting is built around salaried income: payslips, a P60 and a permanent job. For a contractor that can understate what you earn, or rule you out altogether.
Contract-based underwriting fixes that. The lender takes your gross day rate, turns it into an annual figure and lends against it, in the same way it would lend against a salary. Because the calculation uses your full contract rate, it can support more borrowing than accounts that show a lower taxable profit.
Can contractors get high street rates?
Yes. Lenders including Halifax, Nationwide, Skipton, NatWest, Bank of Ireland and Accord Mortgages have contractor-friendly policies. If you meet their criteria, usually a contracting track record or a good day rate, you can be considered for the same products and rates as any other borrower. You can see current rates on our rates page.
How much can you borrow as a contractor?
The biggest advantage of a contractor mortgage is contract-based underwriting. Instead of payslips or the profit in your accounts, lenders use your gross day rate. Most use a standard formula to turn it into an annual income:
Day rate × 5 days × 46 weeks = annual income
Some lenders use 48 weeks. Forty-six is the cautious industry standard, allowing for holidays and gaps between contracts. Lenders then apply a multiple, generally around 4.5 to 5.5 times that income, to give the amount you could borrow. Where you sit in that range depends on the lender and on your existing credit commitments.
On a £400 day rate, that is £400 × 5 × 46 = £92,000 a year, so somewhere between £414,000 at 4.5 times and £506,000 at 5.5 times, before the lender looks at your deposit, your outgoings and your credit history.
Our contractor mortgage calculator gives you a quick figure. It is for guidance only: the lender’s own affordability check decides.
Not sure what your contract would get you? We can check.
We are a fee-free broker for most cases. Fees may apply on complex cases, including adverse credit, company buy-to-let, visa applicants and loans under £250,000, and will always be confirmed in writing before you commit.
Or call 020 8090 2043
What lenders ask for
- Your current contract: Your current contract, plus previous ones, so the lender can see your contracting history, the length of each contract and the rate.
- If you are paid through an umbrella company: Your last three to six months’ payslips.
- If you are a sole trader or run a limited company: SA302 tax calculations and tax year overviews. Some lenders also ask for company accounts.
- Bank statements: Your last three months’ statements, showing your contract income arriving and your regular commitments.
- Proof of ID and address: Your passport or driving licence, and a recent bill or bank statement for your address.
Lenders differ in what they ask for, and some want less than this when they are lending on your day rate. We will tell you exactly what your lender needs before anything goes in.
Day rate, CIS, umbrella or IR35: what it means for your mortgage
Day-rate contractors
If you are paid a day rate, most contractor-friendly lenders use the formula above. They will usually want to see your current contract, how long is left on it and evidence that contracts get renewed or replaced.
CIS contractors
The Construction Industry Scheme covers subcontractors in construction, where the business paying you deducts tax at source before you are paid. Some lenders treat CIS workers like employees and work from your CIS payslips or statements rather than your accounts, which can mean more borrowing than your taxable profit alone would support.
Umbrella company contractors
An umbrella company employs you and pays you through PAYE, usually when your contract falls inside IR35. Lenders generally treat umbrella income like employed income and ask for payslips, and some will still use your day rate if your contract shows it.
Inside or outside IR35
IR35 is the tax rule that decides whether a contract is treated as employment for tax purposes. Being inside IR35 does not stop you getting a mortgage. It changes how you are paid, and so which documents the lender wants to see. Outside IR35, you are usually paid through your own limited company and lenders can work from your contract rate.
Agency workers
If you work through an agency on rolling contracts, some lenders will consider you on a similar basis, using your agency contract and payslips in place of a direct contract.
Contractor mortgage options
The same products as everyone else
Whether you are an IT contractor on a day rate or a CIS contractor in construction, you have access to the same mortgage products as anyone else: fixed rates, trackers, residential and buy-to-let. The key is meeting the individual lender’s criteria when you apply.
Contractor mortgages for first-time buyers
Buying your first home is confusing enough, and being a day-rate contractor can make it feel harder. It is not. There are a few things that improve your chances: a bigger deposit if you can manage it, keeping credit commitments low and having your contract history ready before you start viewing.
Contractor buy-to-let mortgages
Buy-to-let lenders look at the expected rent first, but most still need to see your income, and a contractor can usually be assessed on the same contract basis. Some forms of buy-to-let mortgage are not regulated by the Financial Conduct Authority.
Remortgaging as a contractor
If you already own your home and your current deal is ending, or your contract income has grown since you bought, you can remortgage on a contract basis in the same way.
How a contractor mortgage application works
1. Preparation
Gather your current and previous contracts and the documents in the checklist above. We can tell you what each lender will want before you start.
2. Agreement in principle
Get an agreement in principle. This is a soft check that shows what a lender is likely to offer, and estate agents will often ask to see one.
3. Full application
Once you have found a property, your broker prepares and submits the full application to the lender.
4. Underwriting
The underwriter reviews your contract history and how likely your work is to continue before making a decision.
5. Offer
After the property has been valued, the lender issues a formal mortgage offer.
How to improve your chances as a contractor
A bigger deposit
Deposit is one of the biggest factors in any lending decision. A larger deposit improves your chances of approval and opens up more lenders and products.
Up-to-date contracts
Keep your contracts, renewals and extensions together. They show the underwriter your history, the length of each contract and what you earned from it.
Keep gaps short
Long breaks between contracts make it hard for an underwriter to see consistent income. Where you can, keep gaps to no more than six to eight weeks.
Look after your credit history
A clean credit history keeps high street lenders open to you. With a poor credit history, you may be limited to specialist lenders, which usually costs more.
Contractor mortgage questions we hear most
Can I get a mortgage as a contractor?
Yes. Most high street lenders and many building societies consider contractors, and several will lend on your day rate rather than your accounts. What matters is matching your way of working, whether day rate, CIS, umbrella or limited company, to the lender whose criteria fit it.
How do contractor mortgages work?
The lender turns your day rate into an annual income, usually day rate × 5 × 46, and lends a multiple of that figure, subject to your deposit, outgoings and credit history. Everything else about the mortgage is the same as for an employee.
How much can I borrow as a contractor?
As a rough guide, around 4.5 to 5.5 times your annual contract income, worked out from your day rate, depending on the lender and your existing credit commitments. Our contractor mortgage calculator gives you a figure in a minute; the lender’s affordability check gives the final answer.
Which lenders offer contractor mortgages?
Most high street banks will consider a contractor mortgage, though their criteria differ, and many building societies and specialist lenders do too. Halifax, Nationwide, Skipton, NatWest, Bank of Ireland and Accord Mortgages all have contractor-friendly policies. We check your contract against the criteria that apply at the time, rather than sending you to the first lender that says yes.
Can an IT contractor get a Halifax mortgage?
Halifax is one of the main high street lenders, and it considers day-rate contractors, including IT contractors, on a contract basis, subject to its criteria at the time. We can check whether your contract and day rate fit before you apply.
Can a day-rate contractor on a visa get a mortgage?
Often, yes. Lenders will look at your day rate, how long you have been in the UK, how long is left on your visa and the size of your deposit. You do not always need indefinite leave to remain. Many lenders will consider you without it if you have a 25% deposit, and some ask for less: Nationwide and HSBC can consider a 15% deposit, and Accord Mortgages and Santander a 10% deposit, subject to their criteria at the time. Visa applications are one of the cases where a fee may apply, and we would confirm that in writing before you commit.
Can a first-time buyer get a contractor mortgage?
Yes. The same lenders and the same contract-based assessment apply. A bigger deposit, low credit commitments and a tidy contract history all help, and we will guide you through each step.
Do I need a contractor mortgage broker?
No, but it helps. Lenders class contractors differently and their criteria change, so a broker who handles contractor cases can tell you which lenders are likely to consider your contract, on what basis and what they will ask for, before you apply.
Contractor mortgages with MariannaFS
We arrange mortgages for contractors regularly: IT and other day-rate contractors, CIS workers, umbrella and limited company contractors. We understand IR35, day-rate changes and company structures, and how each lender treats them.
We look at your contract history and how you are paid, work out which lenders are likely to consider you and on what basis, and manage the application from start to finish. We compare mortgages from 90+ lenders and explain our recommendation and why. We’re based in Brentford and advise contractors across London and beyond.
Read our 540 customer reviews.
Your next step
Have your current contract and your last three months’ bank statements to hand, and talk to us before you apply. We’ll explain your options, and any fees, before you commit to anything.
