Mortgages for Contractor Clients
Solutions for modern working lives.
We understand that not every client fits the mould. That’s why we offer flexible mortgage solutions for contractors - whether they’re self employed, operating through a limited company, or working under an umbrella firm.
Our common sense approach means we can support your clients through our Standard Residential or Bespoke Residential product ranges, depending on their individual circumstances.
Who qualifies as a contractor?
We define contractors as individuals who:
- Trade as self employed, or
- Operate through a limited company, or
- Work under an umbrella company.
Contractors have the option to apply as:
- Self employed (with 3 years’ trading and 2 years’ income figures), or
- Employment type contractors, assessed on their contract income.
Contractor criteria at a glance:
|
Criteria |
Standard | Bespoke |
|---|---|---|
| Maximum LTV |
Up to 90% (excluding fees) |
Same as Standard |
| Minimum gross contracting income | £50,000 (individual) | Same as Standard |
| Affordability assessment | 80% of gross contract income | Same as Standard |
| Contracting history | Minimum 12 months in current occupation | 12 months preferred, but less may be considered |
| Contract gaps | No cumulative gaps of 1 month or more in last 12 months | Short gaps may be acceptable |
| Contract evidence required | Current contract + all contracts from past 12 months | Same as Standard |
| Interest Only eligibility | Not available on Standard Residential. | Could be considered, subject to criteria. |
| Umbrella company contractors | Accepted (must meet umbrella income criteria) | Same as Standard |
| Construction Industry Scheme (CIS) contractors | Not accepted under contractor criteria (considered under self employed) | Considered under self employed criteria |
Case studies:
See how we’ve supported contractor clients in securing the right mortgage solution for their needs.
Bespoke Residential case studies
- The applicant had been working as an umbrella contractor for less than 12 months but had experience and employment history of working in the same industry.
- We assessed the income by using the average of the last three months payslips after the umbrella deductions (umbrella margin, apprenticeship levy, employer NICs) along with the contract.
- Two applicants recently returned to the UK after a period living abroad. One of them continued on an employed basis with their current employer but the other began working for their employer as a contractor. The role was fundamentally the same but on a day rate basis rather than the usual employed terms. This short length of time contracting doesn’t fit within our usual criteria, meaning on standard terms they wouldn’t be able to secure the loan they wanted.
- When reviewing the case we were satisfied that although one of the applicants was technically new to contracting their track record was sufficient. Also, even though they didn’t have a three year UK residential address history, we were able to get a meaningful credit score so we were happy for their application to proceed.
- Both applicants were on skilled worker visas and had lived in the UK for three and a half years. Applicant one had been an IT contractor for two years on a day rate of £600 (£156,000 gross per annum) and applicant two was employed on a basic salary of £63,500.
- As they had a good track record in the industries they worked in, affordability was excellent and the LTI was only 3.1x we were happy to apply an exception and proceed at 90% LTV. On standard criteria the LTV is capped at 75% for skilled worker visas.
- Applicant one had worked in the TV and film industry for two years, working on multiple projects, all of which were on a contract basis and paid via PAYE. Applicant two was employed full time in a permanent position.
- We were able to evidence the TV work via P60s, P45s and an HMRC summary of income to demonstrate consistency of earnings over the last two years. Plus we were able to use their current payslips to show the year to date earnings. We also had a copy of the current contract, therefore we were happy to proceed with the loan requested.
When should you consider our Bespoke range?
Choose the Bespoke contractor route if your client:
- Has less than 12 months in their current contracting role
- Has had short breaks between contracts
- Has a strong overall profile but falls just outside Standard criteria.
Next steps?
Explore our full Residential lending criteria
To check your client's suitability for our products, take a look at our lending criteria
Search our Residential products
To see all our current rates visit our Residential products page
Decide how to proceed
- Log in to start an application online
- Or get in touch with your dedicated support