Mortgages for contractors
Key takeaways
Contractors can get mortgages, with lenders often assessing day rate and contract history instead of payslips
Your IR35 status and track record influences which lenders you can use
Strong credit, clear contracts, and the right broker can help you secure a mortgage
Can contractors get a mortgage?
Yes, contractors can absolutely get a mortgage. While some high street lenders still prefer applicants with traditional employment, many banks and specialist lenders now offer products designed for contractors.
The key difference is how your income is assessed. Instead of relying purely on payslips, lenders look at factors such as your contract rate, work history and industry stability.
How do mortgage lenders assess contractor income?
Because contractor earnings can fluctuate, lenders typically use one of the following methods to calculate affordability:
Day rate calculation
Some lenders multiply your daily rate by the number of working days in a year (often around 46-48 weeks) to estimate annual income.
Annualised contract value
Others review your current contract and use its total value to estimate earnings.
Company accounts or SA302s
If you operate through a limited company, certain lenders may assess your income using dividends, salary, or retained profits.
They’ll also consider:
Length of time contracting
Industry demand and stability
Previous employment history
Credit score and existing debts
Use your free mortgage calculator to help you see how much you could borrow
Is inside or outside IR35 treated differently?
Yes, your IR35 status can influence how lenders assess risk:
Inside IR35 contractors
If you’re classed as inside IR35, lenders may treat your income more like PAYE employment because tax and National Insurance are handled at source. This can sometimes make affordability assessments simpler.
Outside IR35 contractors
If you operate outside IR35 through a limited company, lenders may examine your accounts more closely. Some will still use your day rate, but others may rely on dividends or net profit figures.
Policies vary widely, so choosing a lender familiar with contractor income structures can make a big difference.
How much contract history do you need?
There’s no universal rule, but common requirements include:
3 to 6 months of contracting with a strong previous employment record in the same field
12 months or more for lenders with stricter criteria
A signed current contract often with at least a few weeks remaining
If you’ve recently moved from permanent employment into contracting within the same industry, some lenders may still consider your application.
Can you get a mortgage with gaps between contracts?
Yes, short breaks between contracts are usually acceptable, especially in industries where project work is normal.
Lenders will look at:
How long the gaps were
Whether you quickly secured new contracts
Your overall earnings pattern
Long or frequent gaps may require additional explanation or a larger financial buffer, but they don’t automatically disqualify you from getting a mortgage.
Do contractors need a bigger deposit?
Not always. Many contractors can get mortgages with deposits similar to employed applicants, typically starting from around 5–10% depending on credit history and affordability.
However, a larger deposit can help if:
Your income is variable
You have limited contract history
You’re applying shortly after becoming self-employed
A higher deposit may also improve your interest rate options.
Which lenders are best for contractors?
There isn’t a single “best” lender. The right option depends on your working setup, income structure and credit profile.
As a contractor, there are typically two main options to consider:
High street banks
Some mainstream lenders now accept contractor income, especially for professionals in IT, engineering, finance or healthcare.
Specialist lenders
These providers often take a more flexible approach, assessing day rates or contract values rather than traditional payslips.
Because criteria change frequently, comparing deals across the market is essential.
Should contractors use a specialist broker?
While it’s possible to apply for a mortgage directly, many contractors can benefit from using a mortgage broker who understands non-standard income.
A specialist broker can:
Match you with lenders that accept contractor applications
Present your income in a way lenders understand
Help if you’re inside or outside IR35
Potentially access exclusive or intermediary-only deals
If your income structure is complex, for example, a mix of salary, dividends and retained profits, expert guidance can save time and reduce the risk of declined applications.
Tips to improve your chances of approval
Keep copies of contracts and renewal history
Maintain a strong credit score
Avoid large new debts before applying
Save a bigger deposit if possible
Work with lenders experienced in contractor mortgages
Compare mortgages with MoneySuperMarket
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Author
Collette Shackleton
Content Writer
Collette Shackleton is a highly skilled Content Writer who has over nine years’ experience creating helpful and engaging personal finance content for consumers. Collette shares her experience as a...
Reviewer
Alan Cairns
Senior Content Editor
Alan helps MoneySuperMarket break down complicated financial topics into plain English, to help you find the right deals. When he’s not writing or editing you might find him cycling the South Downs.
