Table of Content
Contractor Mortgage
Jamie Elvin talks us through the mortgage process for contractors.
Contractor Mortgages made easy
As a contractor, getting a mortgage can feel tougher than it should. While your work offers flexibility and independence, your income may not fit the traditional model lenders prefer.
Fortunately, with more professionals choosing self-employment, many UK lenders now offer tailored contractor mortgage solutions.
At Strive Mortgages, we specialise in helping contractors and self-employed individuals secure competitive mortgage deals. Our expert team has a proven track record of navigating complex income situations and presenting them clearly to our wide network of lenders.
Your dedicated Strive adviser will help you prepare a strong mortgage application, guide you through every step, and ensure you have all the right documents in place.
Ready to get started? Apply online or call us on 0330 043 1121 to speak with an expert adviser.
What classes as a Contractor Mortgage?
A contractor mortgage is designed specifically for employed or self-employed contractors, freelancers, or those who don’t have a traditional employment structure. This includes IT contractors, creative professionals, and people working via limited companies.
You might work project-to-project, have a variable income, or get paid through multiple income streams, which appears to limit your options, but don’t worry, this situation really doesn’t mean you can’t get a mortgage.
You just need an experienced lender (and mortgage broker) who understands your situation.
Outstanding service and clear communication are at the core of what we do. But don’t just take our word for it—read firsthand experiences from our clients and discover why they rate us a 5-star mortgage broker.
How is a contractor’s income assessed?
Lenders offering contractor mortgages will usually look at your current contract, your daily or hourly rate, and how long you’ve been contracting for.
They often use a process called contract-based underwriting, which “annualises” your income.
Example:
Daily rate: £500
Working days/week: 5
Weeks worked/year: 48
Annualised income: £500 × 5 × 48 = £120,000
Generally, this income is then multiplied by the lender (typically 4.5–5×) to calculate your borrowing capacity, subject to meeting lender criteria, of course.
Some specialist contractor mortgage brokers may even help you access lenders who go up to 5.5× income, depending on your credit score, deposit size, and financial stability.
This method of assessing income is commonly known as annualising or grossing up the contract value.
How much can contractors borrow?
As a general rule, contractors can usually borrow between 4.5 and 5 times their annualised contract value.
Some contractor friendly lenders may even consider higher income multiples depending on your credit history, financial profile, and the overall strength of your mortgage application.
However, it’s important to note that each lender may have different criteria and policies when it comes to assessing a contractor’s income and loan affordability.
While several high street lenders may use traditional self-employed criteria, others take a more flexible, mortgage-based approach using your contract rate, especially if you meet their minimum income requirements.
Lenders may also consider other factors such as your credit score, deposit size, and financial stability. Applying with the wrong lender could limit your borrowing potential or delay the process.
Based on the example above, with a contract income of £120,000, a lender may offer:
4.5× income = £540,000
5× income = £600,000
Of course, your maximum mortgage will depend on your overall financial profile, including any debts, bank statements, low salary + dividend combinations, and your average income over time.
Your mortgage balance and whether you’re applying for home mover mortgages, a buy to let property, or something else entirely can also influence which loan options are available to you, even if this is your lowest yearly income so far.
Contractor friendly mortgages
Many mainstream mortgage lenders are open to contractors, but not all will assess your income the same way.
Some treat you as self-employed and base your borrowing on net profits or tax returns from your company.
Others, more specialist lenders, will offer contract-based underwriting. These are some of the more contractor-friendly names:
Halifax
NatWest
Bank of Ireland
Nationwide
Clydesdale Bank
Metro Bank
Skipton Building Society
These lenders may be more open to using your contract value rather than your official self employed accounts, especially for those earning a high day rate or working in specialist industries.
How do contractors apply for a mortgage?
The mortgage process is largely the same as for any other applicant, but some documents and underwriting will be different.
That’s why working with a specialist mortgage broker, one who understands how to arrange contractor mortgages, is so important.
What documents do you need?
When applying for a contractor mortgage, having the right paperwork prepared can make the process quicker and smoother.
Lenders need a clear view of your income, creditworthiness, and business structure to assess affordability and risk. Here’s what you’ll usually need to provide:
Proof of ID & Address
A valid passport or driver’s licence is typically accepted, along with a recent utility bill, council tax letter, or bank statement showing your current residential address.Proof of Income
This is a key part of your application. Most lenders will ask to see your current contract, especially if you’re applying under contract-based underwriting. Some may also request previous contracts or payslips if relevant. This helps them understand your current earning capacity and job security.Bank Statements
You’ll usually need to supply the last 3 to 6 months of personal and (if applicable) business statements. These give lenders a sense of your day-to-day income and spending, helping them assess financial stability and mortgage affordability.Details of Your Company
If you operate through a limited company, be ready to provide company registration details, business accounts, and a breakdown of how you pay yourself (salary and dividends). Some lenders will also request an accountant’s reference.Credit Report
Many mortgage lenders will check your credit file themselves, but it’s helpful to review your own report beforehand. This gives you a chance to correct any errors and understand what a lender might see. A good credit history helps support your case, especially if your income is irregular.Tax Returns or Accounts
If you’re applying based on self-employed income or using a mix of salary and dividends, you’ll usually need to provide SA302s or full tax returns (from HMRC) from the last one or two years. Lenders use this to verify declared income and assess overall financial health.
How long do I need to be contracting?
Others might require at least 12 months’ experience or a minimum contract length.
High-earning contractors (e.g. £500/day or £75,000+ annualised income) may have more flexibility. There are even options for those on short contracts (3–6 months), depending on your overall case.
How do you strengthen your mortgage application as a contractor?
As a contractor, there are several things you can do to strengthen your position when applying for a mortgage:
- Have time remaining on your current contract
Ideally, lenders like to see at least a few months left on your contract at the time of application. If your contract is due to end soon, having written confirmation of an extension or upcoming contracts can also help.
- Show a solid track record
Having at least two years of experience in contracting or within the same line of work can open up more lending options. That said, some lenders will still consider you with less experience, especially if you have strong overall financials.
- Apply at the right time
Timing matters. Applying for a mortgage while between contracts, or during a period where you’ve taken extended time off or a holiday, could reduce your assessed income and limit borrowing potential.
- Save for a large deposit:
Having a larger deposit can help reduce the lender’s risk and may make you a more attractive borrower.This can also help you secure a more competitive interest rate and access the best mortgage options, even if you’re considered a higher risk due to self employment or a variable rate income structure.
- Use a mortgage broker:
A specialist contractor mortgage broker who specialises in working with contractors can help you find the right lender and product for your needs.They can also help you navigate the application process and provide guidance on what documentation you need to provide. They’ll know which building societies and banks offer the best mortgage deals for mortgages for contractors and freelancers.
Can I get a mortgage with a Limited company?
Yes, absolutely. Many contractors work through a ltd company, and most lenders are familiar with this setup.
Whether your income comes via salary and dividends or net profits, we’ll help present it in the best possible light. However, the criteria and requirements may vary between lenders.
Some lenders may base their assessment on the limited company’s profits, while others may consider your personal income based on your contract value, which may be more favourable.
Limited Company Director Mortgages
IT Contractor Mortgages
Some lenders treat IT contractors as a distinct category from other types of contractors. For example, Some lenders may offer greater flexibility for ‘high value’ contractors—those earning £500 a day or more—or specifically for IT contractors due to the high demand in the tech sector. In many cases, IT contractors can be viewed more favourably than contractors in other professions.
Umbrella Company Mortgages
If you work through an umbrella company, mortgage criteria can differ with some lenders. For instance, Some lenders assesses income based on your net pay after deductions, whereas contractors not using an umbrella company are typically assessed on their gross contract value. It’s important to highlight this distinction when applying, as it can significantly impact how your income is evaluated.
Halifax Contractor Mortgages
Halifax has long been considered a front-runner and contractor-friendly lender. They typically calculate income based on a 46-week average and use the lower figure between your contract rate and your most recent payslip or bank statements. While they were once the dominant choice for contractors, their affordability criteria have recently become more restrictive. As a result, the contractor mortgage market has opened up significantly in recent years, with more lenders entering the space.
Best Contractor Mortgages UK
The best contractor mortgage lender for you will depend on your individual circumstances—such as how long you’ve been contracting, your tax status, and the time remaining on your current contract.
Halifax, NatWest, and Bank of Ireland have consistently been strong options for contractors, often offering flexible criteria and competitive rates. However, not all lenders are as accommodating. For example, Santander and HSBC typically do not favour contractors, especially those operating through a limited company, and may not consider your day rate when assessing affordability.
Working with a specialist mortgage broker can make a significant difference, helping you find lenders who understand contractor income structures and can offer the most suitable deals.
How can Strive Mortgages help contractor workers?
Getting a mortgage as a contractor can be more complex than for someone in a traditional employed role. Income structures can vary, and many lenders don’t always understand the nuances of contract work.
At Strive Mortgages, we specialise in helping contractors secure the right mortgage.
Our experience means we know how to present your income in the best light, whether you’re working through a ltd company, umbrella company, or on a day rate.
We work closely with contractor-friendly lenders and know their criteria inside-out.
This allows us to match you with the right lender from the outset, saving you time, reducing stress, and giving you the best possible chance of success.
We’d love to hear from you – get started online or call us on 0330 043 1121 today to speak with one of our expert advisers.
Frequently Asked Questions
Yes, many lenders will consider new contractors, especially if you’ve been in a similar employed role before. A contractor mortgage adviser can help present your case to the right lender, even if you only have a short contract or limited contracting history.
Absolutely. Lenders who specialise in contractor mortgage advice often use contract-based underwriting, which annualises your contract rate instead of relying on traditional payslips. This makes it much easier for contractors with irregular income to qualify.
A specialist contractor mortgage broker understands the structure of your income and how lenders assess affordability. They’ll guide you through the mortgage process, help you gather the right documents, and connect you with lenders who offer the best terms for contractors.
Yes, some lenders will approve applicants on short-term contracts or fixed-term contracts, especially if you have a strong track record or work in a high-demand industry. Your adviser can help identify which lenders accept this kind of employment setup.
Not necessarily. Many lenders are familiar with company contractors and will either assess your gross contract value or use company accounts. Your contractor mortgage adviser can help you present your income in the best way to maximise borrowing potential.
Strive Mortgages saves you time, hassle & money
Jamie Elvin
Jamie is an expert in all things mortgages, and our most experienced broker. Connect with Jamie and get started to see how Strive Mortgages can help you.
