Contractor Mortgages in the UK
Contractor mortgages let you borrow based on your gross annualised day rate rather than the lower net profit on your accounts. The catch is finding a lender that uses the contractor model — and most don’t.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Quick summary
- Gross annualised income = day rate × 5 days × 46–48 weeks (lender dependent).
- You don’t usually need 2 years of accounts — many specialists accept 12 months of contracting history.
- Both Ltd company and umbrella PAYE contractors are covered, though the route differs.
- CIS subcontractors are a separate category with specialist lenders that use gross CIS day rate.
- A broker who places contractor cases monthly is worth a lot more than a generalist.
What lenders may look at
- Day rate and remaining contract length
- Sector (IT, engineering, professional)
- Time as a contractor
- Gaps between contracts
- Personal credit
Documents you may need
- Current contract showing day rate and end date
- CV showing contracting history
- 3 months bank statements
- Personal ID
- Proof of deposit
Common issues
- Day rate annualisation rejected by a generalist lender — switch to a contractor specialist.
- Gap of >6 weeks between contracts — most lenders want continuity.
- New to contracting (<12 months) — narrow lender pool but possible.
- CIS subcontractor cases routed incorrectly — these are a niche-within-a-niche.
Frequently asked questions
How long do I need to be contracting? +
A growing number of specialist lenders accept 12 months of contracting, including time at a previous PAYE role in the same field.
Will lenders accept my umbrella PAYE income? +
Most treat umbrella contractors as employed and use the contract + payslips.
What if I’m between contracts? +
Short gaps (under 6 weeks) are usually fine. Longer gaps need explanation and sometimes a contract starting soon.
Do I need a contractor-specialist broker? +
Strongly recommended — generalist brokers often place contractor cases on net-profit lenders and short-change the borrowing significantly.
Are contractor mortgage rates higher? +
No — most contractor lenders price the same as their mainstream products.
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