Getting a mortgage as a contractor in the UK isn’t as straightforward as it is for someone in full-time employment. Even with a strong income, lenders often struggle to assess your earnings properly, especially if you work through a limited company or under short-term contracts. But with the right approach, and a good broker, it can absolutely be done.
Why contractor mortgages are different
Most high street lenders are set up to deal with salaried employees. They want payslips, P60s and permanent contracts. Contractors rarely have these. If you operate via your own company, your actual income on paper may look lower than what you take home, especially if you’re tax-efficient.
This makes standard mortgage applications trickier, but specialist lenders and brokers have developed contractor-friendly solutions. These often use your day rate and contract length instead of salary.
How your income is calculated
If you’re a limited company contractor on a day rate, some lenders will calculate your income like this:
day rate × number of working days per week × 48 weeks
So if you’re on £500/day and work 5 days per week, your “contractor income” could be assessed at £120,000 per year. This is often more favourable than using your company accounts or dividends alone.
What lenders look for
Lenders will usually want to see:
- a current contract (with at least 3 to 6 months left)
- a strong contracting history (ideally 12 months or more)
- proof of consistent income (bank statements, SA302s, etc.)
- a good credit score
- a sensible deposit – typically 10% or more
Some lenders are happy with just your contract, especially if you’ve been working this way for a while. Others may ask for full accounts or tax returns, especially if there are gaps in your income.
Tips for getting approved
- Use a specialist broker who knows the contractor market
- Avoid long gaps between contracts where possible
- Keep your paperwork tidy and ready to go
- Reduce debts before you apply
For more on how it works, see the full guide to contractor mortgages
Want to see how much you could borrow?
Here’s a great contractor mortgage calculator that gives you a quick estimate based on your day rate and working pattern. It only takes a few seconds.
With a solid contract, clean credit record and the right broker, getting a mortgage as a contractor is very achievable. Many lenders are now familiar with the way contractors work – the key is knowing who to approach and how to present your income correctly.