If you’re an independent contractor or self-employed professional, securing a mortgage can feel more complex than it is for those in traditional salaried roles.
While you may have a healthy income and stable workflow, lenders often see irregular or project-based income as riskier, meaning you might have to work harder to prove your affordability.
But with the right preparation, expert advice, and understanding of what lenders look for, getting a mortgage as a contractor is very achievable. In fact, specialist contractor mortgages exist precisely to serve professionals like you.
In this article, we’ll explore what contractor mortgages are, how they work, what documents you’ll need, and how to improve your chances of approval: all tailored for the UK property market.
What Is a Contractor Mortgage?
A contractor mortgage is simply a mortgage offered to someone who earns a living on a contractual basis, rather than through permanent employment. This can include:
- Freelancers and consultants
- Self-employed contractors working through limited companies
- Contractors working via umbrella companies
- Fixed-term contract workers
- IT and engineering contractors
- Medical professionals (e.g. doctors, dentists, solicitors)
While the mortgage product itself isn’t necessarily different, the assessment criteria lenders use for contractors often is. Lenders may review your income in different ways and require a more detailed picture of your financial situation.
Why Can It Be More Difficult for Contractors to Get a Mortgage?
Traditional mortgage applications rely heavily on payslips, employment contracts, and stable monthly income. For contractors, income can be irregular, varying from month to month or tied to short-term contracts. Some lenders see this as less secure, even if your overall earnings are higher than a salaried equivalent.
Challenges often include:
- Demonstrating consistent income
- Convincing lenders your work is ongoing and reliable
- Proving your contract history and future pipeline
- Managing your tax efficiently (especially through a limited company)
Because of this, many high-street banks apply strict affordability criteria or reject contractor applications outright. However, an increasing number of lenders, especially specialist ones, take a more flexible view, particularly if you can demonstrate long-term income stability.
How Do Lenders Assess Contractor Income?
Lenders typically take one of two approaches when assessing your income as a contractor:
1. Contract Rate Method
Some lenders, especially those used to dealing with IT and professional contractors, will assess your income based on your day rate rather than your tax returns or company accounts. This approach is often more favourable.
They may use a formula such as:
Day rate × number of working days per week × 48 or 52 weeks
For example, if you earn £500 per day, 5 days per week:
£500 × 5 × 48 = £120,000 annual income used for mortgage purposes
This method is often used if:
- You’re on a current fixed-term contract
- You have a history of contract renewals or similar contracts
- You’re working via a limited company or umbrella company
2. Accounts or SA302s Method
Other lenders will assess your income based on your self-employed income, usually by reviewing:
- The last 1–3 years of company accounts
- Your SA302 tax calculations (and matching tax year overviews from HMRC)
- Dividend and salary drawings (for limited company directors)
This method is more common if you’re a sole trader or running your own business, and especially if your income fluctuates year to year. Some lenders will average your earnings over the last two years, while others will use the most recent year if your income is rising.
What Documents Will You Need?
As a contractor, you should expect to provide more detailed documentation than a salaried applicant. This may include:
- A current contract showing your day rate, length, and terms
- A history of previous contracts (ideally covering 12–24 months)
- Company accounts (if operating as a limited company)
- SA302s and HMRC tax year overviews (typically for 2–3 years)
- Proof of business expenses and dividends
- Bank statements (personal and business)
- ID and proof of address
- Evidence of your deposit
Having your paperwork organised and up to date will not only speed up the process but also strengthen your application.
How Much Can You Borrow?
Contractors can often borrow the same as permanently employed applicants; typically up to 4.5 to 5 times your annual income, depending on the lender and your financial commitments. If you’re assessed on your day rate, you may even be able to borrow more than you could using your tax returns alone, since many contractors draw minimal salaries to optimise tax.
Your borrowing power will also depend on:
- Your deposit size (a larger deposit gives you access to better rates)
- Your credit history
- Your outgoings and financial commitments
- The stability of your contracting work
Working with a mortgage broker who specialises in contractor cases can help you access lenders who are comfortable using more favourable income calculations.
Tips to Improve Your Chances of Approval
- Build a Strong Contracting History: The more evidence you have of consistent contracts over time, ideally two years or more, the better. Gaps in your work history may raise concerns, so be ready to explain any breaks.
- Maintain a Good Credit Score: Your credit record plays a significant role. Make sure your credit file is clean, your debts are manageable, and you’re registered on the electoral roll.
- Have a Healthy Deposit: A larger deposit (e.g. 10%–20%) not only reduces the lender’s risk but also opens the door to more competitive rates.
- Avoid Large Financial Commitments: Lenders assess affordability closely. If you have significant monthly outgoings (e.g. car finance, personal loans), it could reduce the amount you’re allowed to borrow.
- Work With a Specialist Broker: A mortgage broker experienced in contractor applications can help match you with lenders who understand your income structure, and present your finances in the most favourable light.
Can First-Time Buyers Who Are Contractors Get a Mortgage?
Yes. First-time buyers working as independent contractors can absolutely get a mortgage. In fact, many specialist lenders actively cater to first-time buyers in this category.
You’ll need to provide evidence of income, demonstrate a reliable work history, and ensure your credit profile is in good order, just like any other applicant.
It’s especially helpful to work with a broker early in the process, so you can prepare your documentation and set realistic expectations around how much you can borrow and which lenders are likely to say yes.
Getting a mortgage as an independent contractor in the UK might take a bit more preparation and explanation, but it’s entirely possible, and in many cases, straightforward when you work with the right professionals.
As the UK workforce continues to embrace self-employment, more lenders are updating their criteria to accommodate flexible and freelance income structures. Whether you’re contracting through a limited company, umbrella, or as a sole trader, there are competitive mortgage options available to you.
If you’re considering buying a home or remortgaging as a contractor, speaking to a broker who understands your working arrangement can make all the difference. They’ll help you access the most suitable lenders, navigate the paperwork, and secure the best possible deal. Remember, if we can’t help, it’s not possible.
