If you contract for a living, the single biggest factor in what you could borrow is not your income. It is whether the lender you approach treats you as a contractor at all. Assessed on your accounts you might be offered £200,000. Assessed on your contract value, the same person on the same day rate could be offered well over £400,000. Nothing about you changes. Only the method does. That, in a sentence, is what a contractor mortgage is.
Key takeaway: Several lenders may ignore your accounts entirely and work from your annualised contract value instead. The usual calculation is day rate x 5 days x 46 weeks, so a £500 day rate becomes £115,000 of assessable income regardless of what you have drawn or what your tax return shows. Thresholds vary enormously between lenders, and some apply no minimum income at all. Quanstrom Financial checked the contractor criteria of ten lenders in October 2026, and the comparison is below.
Why contractors get undersold
There is no single definition of a contractor in mortgage lending, and that is the root of the problem. When you approach a lender, one of three things happens.
Most commonly, the lender puts you through its standard self-employed process. It asks for two years of SA302s, takes your net profit after expenses, and averages it. Everything you legitimately claimed against tax now works against you, because it reduced the figure the lender is looking at.
If you contract through a limited company, you may instead be assessed as a limited company director. That usually means salary plus dividends drawn. If you have been paying yourself efficiently and leaving profit in the business, the lender sees a fraction of what your business actually earns, though some lenders will use your share of company net profit instead.
The third possibility is that the lender assesses you as a contractor, using the value of your contract. This is the route most contractors do not know exists, and it is often the most generous.
| How you are assessed | What the lender uses | Typical result |
|---|---|---|
| As self-employed | Two years of net profit from your SA302s, averaged | Lowest, because expenses have already reduced the figure |
| As a company director | Salary plus dividends actually drawn from the company | Low if you pay yourself tax-efficiently |
| As a contractor | Your annualised contract value, before expenses | Usually the highest of the three |
To put that in plain numbers: assessed as a contractor, a £450 day rate becomes £103,500 of income. Assessed on two years of averaged net profit after expenses, the same contractor might show £55,000. At 4.5 times income that is the difference between roughly £465,750 and £247,500 of borrowing. Getting the assessment method right can be worth far more than any rate saving.
If you are being assessed under either of the first two routes, our guides on self-employed mortgages and mortgages for limited company directors explain how to get the most out of each. This guide is about the third route. If you are moving from contracting into a permanent role, our guide to getting a mortgage with a new job covers how a signed contract can be used before you start.
How a contractor mortgage is calculated
The principle is simple. Rather than looking backwards at what your business declared, the lender looks at what your current contract is worth over a year and treats that as your salary.
Example: Day rate x 5 days x 46 weeks. A contractor on £450 a day is assessed as £450 x 5 = £2,250 a week, x 46 = £103,500 a year. At 4.5 times income that supports roughly £465,750 of borrowing. This is an illustration only and not a quotation.
The 46 weeks is deliberate. It builds in around six weeks a year of holiday and gaps between contracts, which is why lenders are comfortable treating the figure as sustainable. Not every lender uses 46 though, and the difference matters. Coventry works on 41 weeks, which on the same £450 day rate produces £92,250 rather than £103,500, while Kensington uses 48 weeks of your weekly rate, which produces £108,000.
How much could your day rate support?
The table below shows how the same day rate converts into assessable income on 46 and 48 weeks, and what that could mean at 4.5 times income. Some lenders may lend more than 4.5 times to higher earners, subject to affordability and their criteria, and costs you carry personally can reduce the figure.
| Day rate | Annual income (x5 x46) | Annual income (x5 x48) | Illustrative borrowing at 4.5x |
|---|---|---|---|
| £300 | £69,000 | £72,000 | £310,500 to £324,000 |
| £400 | £92,000 | £96,000 | £414,000 to £432,000 |
| £500 | £115,000 | £120,000 | £517,500 to £540,000 |
| £600 | £138,000 | £144,000 | £621,000 to £648,000 |
| £700 | £161,000 | £168,000 | £724,500 to £756,000 |
| £800 | £184,000 | £192,000 | £828,000 to £864,000 |
Illustrations only, not a quotation or an offer of credit. What you may be able to borrow depends on affordability, your outgoings, your credit history and each lender's criteria.
What day rate do you need?
There is no universal minimum, and this is where a lot of contractors rule themselves out unnecessarily. Lenders set the bar in very different places, and some do not set one at all.
Virgin Money applies no minimum income requirement to day rate contractors, asking instead for a longer track record where earnings are lower. Skipton publishes no minimum day rate either. Accord starts at £300 a day or £50,000 a year, TSB and Coventry at £50,000 a year, and NatWest's day rate route applies from £75,000 a year. Halifax treats IT contractors, and contractors whose tax is deducted before they are paid, as employed on any income, while other contractors who pay their own tax need £500 a day or £75,000 a year to be assessed that way.
The practical implication is that a day rate which rules you out with one lender may be perfectly acceptable to another, so a single decline tells you very little about the market as a whole.
Do you qualify for a contractor mortgage?
The day rate is only half of it. Lenders also want to see a track record, and this is where applications most often come unstuck.
Broadly, you will need:
- Contract history. Anywhere from six months of completed contracts with the more flexible lenders, up to two years of experience in your field with others.
- A current contract. Usually with a minimum period still to run, and evidence of an extension or new contract if you are close to the end.
- Manageable gaps. Lenders expect breaks between contracts, but they set limits on how long.
- The right company structure, if you contract through a limited company. Several lenders restrict the contractor route to cases where you are the sole shareholder, or share ownership only with a spouse or partner who is also on the application.
Can you get a contractor mortgage on your first contract?
It may be possible, depending on your background. Kensington will consider contractors with less than 12 months of contracting if they have an established CV, and TSB can refer applicants in professional occupations with less than 12 months of history to its underwriters. Accord looks for at least six months of contracting, but if your current contract is your first, it can take your previous experience and pay in the same field into account. Most other lenders want 12 months or more, so if you have recently moved from a permanent role into contracting, the choice of lender matters even more.
Not sure how a lender would read your contract?
Send us your day rate, how long you have been contracting and how you are paid, and a Quanstrom Financial adviser can tell you which lenders may assess you on your contract value.
Which lenders are best for contractor mortgages?
Contractor criteria vary more than almost any other area of lending. Below are ten lenders with published contractor policies, taken from their own intermediary criteria and checked on 27 October 2026. Others offer contractor mortgages too, and the best fit genuinely depends on your day rate, your history and how your company is structured.
| Lender | Minimum income | How income is calculated | History needed | Gaps between contracts |
|---|---|---|---|---|
| Accord | £300 a day or £50,000 a year | Up to 46 weeks of the current contract | 6 months of contracting | Up to 8 weeks as standard |
| NatWest | £75,000 a year for the day rate route | Weekly contracted income x 46 | Contracts covering 12 months, 6 already completed | No more than 6 weeks in that 12 months |
| TSB | £50,000 from your day rate | Average day rate over 12 months x 5 x 46 | 12 months, with at least 3 months left to run | No single gap over 6 weeks |
| Skipton | No published minimum | Day rate x 5 x 46 | 12 months of contracts and 2 years in the field | Gaps over 4 weeks reduce the weeks used |
| Virgin Money | No minimum income | Current contract x 46 | 1 year contracting or 2 years in the industry if earning £50,000+, otherwise 2 years contracting | Up to 6 weeks, longer case by case |
| Halifax | None if you work in IT or tax is deducted at source, otherwise £500 a day or £75,000 a year | Lower of day rate x 5 x 46 and the income on your payslips or bank statements | 12 months with 6 months left, or 2 years in the same work | Short gaps such as 4 weeks for holiday or sickness are normally fine |
| Coventry | £50,000 a year | Day rate x 5 x 41 | 12 months in the same profession with 6 months left, or 24 months continuous | Not published |
| Metro Bank | Not published | Day rate x 5 x 46 | 12 months in the same industry, current contract of at least 3 months | Up to 6 weeks in 12 months |
| Kensington | Not published | Weekly rate x 48 | Under 12 months considered with an established CV | Not published |
| Furness | Not published | Day rate x 5 x 46 | 1 year in the industry | Gaps over 8 weeks referred to underwriters |
In short: Accord, Virgin Money and Kensington tend to suit contractors earlier in their career or on lower rates, Skipton, TSB and Halifax reward a longer track record, Halifax is notably open to IT contractors, and NatWest is the most flexible on how the contract itself is structured. Some large lenders, such as HSBC and Bath Building Society, assess contractors under their self-employed or fixed-term rules rather than a day rate calculation, which is why the lender choice matters so much.
Lender criteria described here were taken from each lender's published intermediary criteria and checked on 27 October 2026. Criteria change regularly, so a mortgage broker at Quanstrom Financial will confirm what currently applies to your circumstances.
Does IR35 affect a contractor mortgage?
Not in itself. IR35 decides how you are taxed, and for a mortgage that mainly changes how you are paid, which in turn changes how a lender reads your income. Being inside IR35 is not a barrier to a contractor mortgage, but it does change which lenders suit you.
- Outside IR35, through your own limited company: lenders with a contractor policy can work from your day rate rather than your accounts. Several only do this if you own the company outright, or share it with a spouse or partner who is on the application.
- Inside IR35, paid through an umbrella company or the client's payroll: tax is deducted before you are paid, and lenders treat you much like an employed contractor. Most work from your income after umbrella deductions, and how much they deduct varies between lenders.
If your status has changed during your contract history, that is not necessarily a problem, but expect a lender to ask about it, and have your contracts and payslips ready to show the continuity.
Work out your own figures
Enter your day rate below to see how it annualises and what that could support in borrowing. Adjust the days per week and weeks per year if your pattern differs from the standard assumption.
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How different types of contractor are assessed
The contractor route covers a wider range of work than most people assume, though the mechanics differ depending on how you are paid. If your income comes from brand deals, sponsorships and platform payouts instead, our guide to mortgages for content creators and influencers looks at another variable income type lenders assess in their own particular way.
IT and professional day-rate contractors
This is the classic case contractor mortgage criteria were designed around: IT contractors, engineers, project managers, consultants and similar professionals working on defined contracts at a set day rate.
IT contractors in particular are treated favourably. Halifax will assess an IT contractor as employed on any income, without applying its usual £500 a day or £75,000 threshold, which is a meaningful advantage if your rate sits below where other lenders draw the line.
Umbrella company and fixed-term contractors
Being paid through an umbrella company does not exclude you, and nor does operating inside IR35. Virgin Money accepts both, and Halifax applies the same income rules to umbrella contractors as to other contractors.
The detail worth knowing is how deductions are handled. Virgin Money deducts statutory employer costs, including employer National Insurance and the Apprenticeship Levy, plus payroll service costs, before multiplying by 46 weeks. NatWest and Accord also work from your income after umbrella deductions. Nationwide takes a different approach once you have been paid through an umbrella company for at least 12 months, multiplying your day rate by the days you work and 52 weeks, with expenses excluded. On the same day rate, those methods can produce noticeably different figures.
Fixed-term contractors are treated similarly, generally needing a current contract with a minimum period remaining plus evidence of history in the same field. Virgin Money asks for a two year track record in the same line of work for fixed-term contracts. Where earnings come largely from flying duty and shift allowances rather than a contract value, our guide to mortgages for airline and cabin crew explains how lenders treat that kind of income.
CIS subcontractors
Construction Industry Scheme workers are handled differently again, and usually not through the day rate calculation. Lenders tend to work from your gross CIS income rather than an annualised contract value. NatWest uses the gross figure less expenses from 12 months of contract vouchers or statements, and asks for the application to be keyed as employed rather than self-employed. Virgin Money assesses CIS income under its self-employed policy instead.
The approaches vary enough that timing your application can genuinely change the outcome, particularly if your work is seasonal. Our guide to CIS contractor mortgages explains how the different methods compare.
Contractors paid in a foreign currency
If your contract pays in euros, dollars or another currency, fewer lenders will consider it, and those that do may only accept certain currencies or count a reduced percentage of the income to allow for exchange rate movements. NatWest, for example, accepts contract income in currencies on its approved list. Our guide to mortgages with foreign currency income explains which lenders accept it and how much they count.
Dentists, locums and medical contractors
Associate dentists, locum doctors and bank nurses are assessed in a similar spirit to contractors but usually on invoices rather than a day rate. Skipton, for example, averages 12 months of gross income from payslips, invoices or an employer summary, and requires any UDA (Unit of Dental Activity) deductions to be accounted for. Weekly payslips are not accepted as evidence.
Because this route works from gross invoices rather than post-expenses profit, it is often considerably more generous than standard self-employed criteria. Our page on mortgages for dentists covers it in detail, and our guide to NHS locum and bank worker mortgages covers locum income.
What can reduce the income a lender uses
The annualised figure is a starting point, not always the final number. Lenders will look for costs you carry personally that the contract does not cover, and deduct them from the income they assess.
NatWest publishes a list of what it looks for, which is a good guide to what any lender will consider:
- Car or finance loans
- Extended travel and accommodation costs
- Training courses
- Professional indemnity insurance
- Salaries paid to a partner, spouse or employee
This is not a reason to avoid claiming legitimate costs. It is a reason to be prepared to explain them, and to have your bank statements in order before you apply rather than after questions start.
Gaps between contracts
Every contractor has gaps, and lenders know it. What matters is how long and how recent.
Accord treats gaps of up to eight weeks as standard. NatWest, TSB and Metro Bank all work to around six weeks, as does Virgin Money, though Virgin asks you to speak to them about longer breaks rather than ruling them out automatically. Skipton takes a different approach again: rather than declining, it reduces the weeks used once gaps in the last 12 months exceed four weeks, so an eight week gap means your day rate is multiplied by 38 weeks instead of 46.
If you have had a longer break it does not necessarily rule you out, but it does change which lender is likely to work. Raise it upfront rather than hoping it goes unnoticed, because it will not.
Protecting your income as a contractor
Lenders worry about gaps between contracts, but for most contractors the bigger risk is being unable to work at all. There is usually no sick pay from a contract, so a few months of illness could put your mortgage payments under pressure.
Income protection could pay you a monthly amount if illness or injury stops you working, after a waiting period you choose. It is not designed to pay out when a contract simply ends, which is why a cash buffer for gaps still matters. If you contract through a limited company, cover can sometimes be arranged through the company; how that is taxed is a question for your accountant. Our guide to life insurance, critical illness cover and income protection explains how the main types of cover differ, and our income protection page explains how Quanstrom Financial can help.
What documents will you need?
- Your current contract, and usually the previous one, covering the period the lender wants to see
- Evidence of a contract extension or new contract if there are only a couple of months left to run, or for a rolling contract, a letter from the agency or client confirming the contract and your day rate
- Three months of personal bank statements, and usually three months of business bank statements
- A CV, where the lender wants evidence of experience in your field
- Proof of identity and proof of deposit
- If you are CIS, 12 months of CIS vouchers, statements or invoices, though some lenders can work from three months
- If you are a locum or associate dentist, 12 months of invoices, payslips or an employer summary, though again three months can be enough with some lenders
Common contractor mortgage mistakes worth avoiding
Assuming your day rate is too low
Thresholds vary widely and some lenders apply none at all, so a rate that fails one lender's test may be perfectly acceptable elsewhere.
Assuming you have to wait for two years of accounts
A contractor mortgage does not depend on filed accounts at all, so a contractor with six months of contract history behind them may be in a stronger position than they realise.
Applying directly to a lender who does not offer contractor criteria
A decline on your credit file is worth avoiding. Not every lender offers this route, and several that do are only accessible through a broker.
Restructuring your company shortly before applying
Adding a shareholder can quietly remove your access to the contractor route with several lenders. Virgin Money, for example, accepts a limited company provided you do not employ other contractors or hold more than one contract. Shareholding also determines how you would be assessed if the contractor route is not available, as our limited company director mortgage guide explains. If you are planning a change and a purchase at the same time, take advice on the order before you act.
Not accounting for umbrella deductions
If you are paid through an umbrella company, work from your post-deduction figure when budgeting rather than your headline day rate, as most lenders will work from the figure after deductions.
Areas we serve
Quanstrom Financial is based in Eastbourne, East Sussex, and arranges contractor mortgages for clients across the UK. Contract work rarely stays in one place, and neither do we: everything can be handled by phone, video call and email, so you do not need to be local to get the same advice, and in-person meetings in East Sussex are available by arrangement.
Many of our contractor clients work in or around London. We have local pages for Epsom and Brighton, or you can see all the areas we cover.
Frequently asked questions
Can I get a mortgage as a contractor?
Yes, contractors are well catered for. With the right lender you may be assessed on your contract value rather than your accounts, which often supports a higher loan than standard self-employed criteria would.
How much can I borrow on a £500 day rate?
As an illustration, a £500 day rate annualised over 46 weeks gives an assessable income of £115,000, and at 4.5 times income that could support around £517,500 of borrowing. A lender using 48 weeks would assess £120,000. The final figure depends on affordability, your outgoings and the lender's criteria.
What day rate do I need for a contractor mortgage?
There is no universal minimum. Virgin Money applies no minimum income requirement and Skipton publishes no minimum day rate, while Accord starts at £300 a day or £50,000 a year, TSB at £50,000 from your day rate, and NatWest's day rate route at £75,000 a year. A rate that is too low for one lender may be perfectly acceptable to another.
How is my day rate turned into an annual income?
Most lenders multiply your day rate by five days and then by 46 working weeks, which allows for holiday and gaps between contracts. Kensington uses 48 weeks of your weekly rate, which produces a higher figure, while Coventry uses 41 weeks, which produces a lower one.
How long do I need to have been contracting?
It varies considerably. Accord looks for a minimum six month track record, NatWest wants contracts covering a 12 month period with at least six months completed, TSB and Metro Bank look for 12 months, Coventry asks for 12 months in the same profession, and Skipton wants 12 months of contract history plus two years of experience in the field. Kensington may consider less than 12 months if you have an established CV.
Can I get a mortgage on my first contract?
It may be possible. A few lenders will consider contractors with less than 12 months of contracting if you have a track record in the same line of work, for example as a permanent employee before you went contracting. Others want 12 months or more, so the lender choice matters.
Is it easier to get a contractor mortgage as an IT contractor?
In some cases yes. Halifax will treat an IT contractor as employed on any income rather than applying its usual day rate threshold, which opens the door to contractors on lower rates than other lenders would consider.
Does it matter if I contract through a limited company?
It can. Several lenders restrict the contractor route to cases where you own the company outright, or share it with a spouse or partner who is also on the mortgage application. Virgin Money accepts a limited company provided you do not employ other contractors or hold more than one contract. Where the contractor route is not open to you, our guide to mortgages for limited company directors sets out which lenders assess salary plus company net profit instead.
Can I use this route if I am paid through an umbrella company?
Yes, with lenders who accept umbrella contractors, and IR35 status is not necessarily a barrier. Bear in mind that most lenders work from your income after umbrella deductions, and the way they calculate it varies, which can change the figure materially.
Does being inside IR35 affect my mortgage?
It does not stop you getting one. Inside IR35 you are usually paid through an umbrella company or the client's payroll, so lenders treat you more like an employed contractor and generally work from your income after deductions. Outside IR35, lenders with a contractor policy can work from your day rate instead of your accounts.
Do gaps between contracts stop me getting a mortgage?
Not usually. Lenders expect them and set their own tolerances, commonly six to eight weeks. Some pro-rate the calculation for longer gaps rather than declining outright.
Can I get a contractor mortgage if I am paid in a foreign currency?
Possibly, though fewer lenders will consider it and many only accept certain currencies or count a reduced percentage of the income. Our foreign currency income guide explains how lenders approach it.
Are CIS subcontractors assessed the same way?
Not quite. CIS income is generally assessed on gross CIS income rather than an annualised day rate, and some lenders assess it under their self-employed policy instead. Twelve months of evidence is typical, though some lenders can work from three.
Do I need a bigger deposit as a contractor?
Not automatically. Deposits can start from 5% of the property value, and Virgin Money and TSB both lend up to 95% LTV to day rate contractors. Being a contractor does not itself trigger a higher deposit requirement.
Does income protection cover gaps between contracts?
No. Income protection is designed to pay out if illness or injury stops you working, not when a contract ends. A cash buffer is the usual answer to gaps between contracts, while income protection covers the risk of not being able to work at all.
Do you arrange contractor mortgages outside Eastbourne?
Yes. Quanstrom Financial is based in Eastbourne, East Sussex, but arranges contractor mortgages for clients across the UK. Everything can be handled remotely, so where you live and where you contract make no difference to the advice you receive.
Should I go direct to a lender or use a broker?
Contractor criteria are one of the least consistent areas of mortgage lending, and several of the lenders offering the most generous treatment are only reachable through an intermediary. Quanstrom Financial is a whole-of-market broker, so we can identify which lender is likely to read your contract most favourably before an application is submitted rather than after a decline.
Written by Toby Quanstrom CeMAP, Director at Quanstrom Financial, a whole-of-market mortgage broker based in Eastbourne, East Sussex, specialising in contractor mortgages and mortgages for self-employed professionals and business owners.
This article is general information only and does not constitute personal advice. Lender criteria were checked on 27 October 2026 and are subject to change. What you may be able to borrow depends on your individual circumstances and lender criteria. Calculator and table figures are illustrations only and are not a mortgage offer.
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