Yes — getting a mortgage as a contractor is absolutely possible, but lenders may assess your income differently compared to a standard employed applicant.
As a contractor, lenders often calculate your income using your day rate rather than traditional salary. Many will multiply your day rate by working days and weeks to estimate annual income, meaning contractors can often borrow similar amounts to employed applicants.
How do lenders assess contractor income?
Instead of using traditional salary figures, many lenders will calculate your income based on your day rate. A common approach is day rate × number of working days × number of weeks per year. For example, a £400 day rate could be assessed as an annual income of over £90,000 depending on the calculation used.
What types of contractors can get a mortgage?
Lenders typically consider IT contractors, construction contractors, consultants, and freelancers working on contracts. Whether you operate through a limited company or umbrella company can also affect how your income is assessed.
Do you need a long contract history?
Not always. Some lenders will consider applicants with minimal contracting history, a strong CV in the same industry, or a current contract with time remaining.
What if you've recently moved into contracting?
If you've recently switched from employed to contracting, some lenders may still consider your application, especially if you work in the same industry, your income is stable, and you have a strong employment history.
How much can you borrow as a contractor?
Many lenders offer around 4 to 5 times your calculated income, depending on your circumstances.
FAQs
Can contractors get a mortgage easily?
Yes, many lenders offer specialist criteria for contractors, particularly those working on day rates or fixed-term contracts.
How is contractor income calculated for a mortgage?
Lenders often calculate your income using your day rate multiplied by the number of working days and weeks in a year.
Do I need 2 years of accounts as a contractor?
Not always. Some lenders will consider contractors with less history, especially if you have experience in the same industry and a current contract.
If you’d like to talk through your situation, call us on 01277 564 054 or send a message.
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