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Contractor mortgages: find out how to get one.

Contractor mortgages are fast becoming a mainstream way of getting paid which lenders are very flexible with.

I see many brokers/lenders over-complicating this to charge larger fees. Do not fall into that trap.

Day rate calculation

In a simple example:

Lenders take your daily rate, x by days worked, then x by 46 weeks (to allow for gaps in contracts) to give an annual figure.

Therefore:

A daily rate of £500, on a 5 day a week, 6-month contract, is multiplied by 5 x 46 to assess the income = £115,000 for the income used on the application.

In practice, most contractors are set up as a Limited company. This means you can go down this path.

Limited company

Below are the main ways you may be set up and broadly how lenders look at your income.

Limited Company Director

Lenders typically take, one, some or all, of the following: Salary, Dividends, Net Profit.
Income of often worked out as an average over a 2-3-year period, but some lenders will take the most recent year if on an upward trend.
Minimum time trading to get a mortgage is 12 months (or one set of accounts).

However, using the day rate calculation often works out as more generous/easier to asses. Most lenders want to see a track record of either contracting or having relevant experience in the industry. The longer the experience and higher the day rate, the more generous lenders are when coming to assess the borrowing.

How We Can Help

As you can see above, the more complex the income, the more help you often need to be approved for contractor mortgages.

We specialise in this area, so would encourage you to speak to one of the The Team just to see what your options are before progressing too far with an application. This will ensure you get a smooth experience when applying for contractor mortgages.

Mortgages for Life’s Goals

Is it harder to get self-employed mortgages?

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We care about finding you the best contractor mortgage

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0207 935 7866

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How to find us

Head Office
The Leather Market, Unit 13.1.1, 11-13 Weston Street, London, SE1 3ER
Call 0207 935 7866
Email info@rosecp.co.uk

A fee of up to 1% of the mortgage amount may be charged depending on your circumstances (ie. £1000 on a £100,000 mortgage). A typical fee is £495 plus we will receive commission from the lender.

Your property may be repossessed if you do not keep up repayments on your mortgage.

Rose Capital Partners Ltd is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy-to-Let. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Rose Capital Partners Ltd. Registration No. 08843654 registered in England and Wales. Registered Address, Leigh Saxton Green, Clearwater House, 4-7 Manchester Street, London W1U 3AE.

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