In theory all mortgage lenders can help contractors obtain a mortgage. If you are able provide two to three years accounts showing the correct amount of dividends/net profit and salary to support the level of mortgage required, then most lenders out there should be able to progress your borrowing request. Equally so, if you have worked through an umbrella organisation for a reasonable period of time, and have payslips showing the required amount to support your borrowing, then again most lenders will be happy to assist you.

In reality, for the majority of contractors it is not easy for them to provide the necessary documentation to support a mortgage application in the conventional way. What became apparent is that as the contractor community started to grow and develop many conventional lenders recognised that applying criteria from the past would preclude a number of potential borrowers from securing funding. Historically contractors would utilise more obscure lenders rather than High Street lenders for the very reason that they could not meet the criteria imposed upon them by such lenders. 

Conventional High Street lenders started to see the contractor market as an area that would provide them with good quality business at a risk that they were prepared to accept.

How are you assessed for a contractor mortgage?

Accord

  • No minimum income for contractors
  • Buy to Let and Residential options for contractors
  • 85% LTV on new build property
  • Intermediary only – no direct business accepted meaning brokers get best support

Chelsea Building Society

  • Self-employed contractors accepted
  • ‘Mutual Organisation’ meaning they exist for the benefit of members, not shareholders
  • As low as a 5% deposit acceptable
  • Fixed offset option, meaning the security of a fixed rate alongside the flexibility of an offset account

Clydesdale

  • Any contractor occupation accepted (subject to minimum income)
  • Flexibility can be applied on standard criteria if supported by the broker
  • Competitive residential and buy to let rates, including offset mortgages
  • Income calculation based on 2 year average of day rate over 46 weeks

Furness Building Society

  • Individual underwriting, meaning an underwriter will consider each case on its own merits, including basing lending on your contract rate
  • No credit scoring
  • Self-build options available for contractors

Halifax

  • Any contractor occupation accepted
  • No minimum income for IT contractors
  • 'Day 1’ contractors accepted
  • Contractors from overseas without permanent residency can be considered
  • Income calculation based on current day rate over 48 weeks

HSBC

  • Market leading rates from one of the world’s biggest banking organisations
  • Discounted rates/fees for ‘HSBC Premier’ customers
  • Price match option against other ‘High Street’ lenders
  • Lifetime tracker options available 

Kensington

  • Flexibility offered for gaps in contracting
  • Low minimum income requirement
  • Tolerance towards bad credit, such as defaults, County Court Judgements and missed payments
  • Income calculation based on 1 year average of day rate over 46 weeks

Leeds Building Society

  • Can accept up to 6 week gaps between contracts
  • Lower minimum income requirement than most contractor lenders
  • Competitive fixed offset rates packaged exclusively for contractors
  • Income calculation based upon actual weeks and rates worked over 12 months

Metro Bank

  • No minimum income
  • Any contractor occupation accepted
  • Most tax structures acceptable (umbrellas and limited companies)
  • Income calculation based on current day rate over 46 weeks

Nationwide Building Society

  • Help to Buy options at standard rates
  • Self-employed contractors with declining profit; Nationwide will average
  • Better rates for existing customers
  • ‘Save to Buy’ option for those planning to buy in the future but without required deposit yet

Natwest

  • Unusual property types (non-standard construction, freehold flats etc)
  • Buy to Let options for contractors who have never owned property before
  • Help to Buy options

Saffron Building Society

  • Professional mortgages for contractors offering better than standard rates
  • Bespoke lending, meaning they are able to consider every case individually
  • Self-employed contractors with only one year of trading
  • ‘Next Step’ range of lending products at 95% LTV

Santander

  • PAYE contractors
  • Leasehold property; 55yr remaining lease required (most lenders 70yrs+)
  • 10yr fixed rates and lifetime tracker products
  • Flexible offset option with no penalty for overpayment

Skipton Building Society 

  • Flexible Underwriting, and brokers have direct access to the underwriter for each case
  • Specialist lending; Help to Buy, First Time Buyer, New Build and Guarantor options
  • Will consider lending based upon contract rate
  • Overpayments; fee-free ability to overpay by 10% of the original mortgage balance
  • 90% LTV for New Build houses

Virgin Money

  • Will lend based upon contract rate
  • Self-employed; Virgin will lend based on directors’ salary plus net profit
  • 5% deposit options, both with and without the Help to Buy scheme
  • Self-build option
  • ‘Freedom to Fix’ products, offering flexibility of tracker rate but with option to switch penalty-free to a fixed rate at any time

Woolwich

  • No minimum income
  • Available to certain types of umbrella company only
  • Minimum 12 month history with current umbrella
  • Will allow up to 6 week gaps between contracts
  • Income calculation based upon what can be evidenced in personal bank statements