Contractor Mortgage Guide: How Contractors Can Secure the Right Mortgage

Contracting offers flexibility, higher earning potential, and independence — but when it comes to mortgages, many contractors are told they don’t fit the standard mould.

If you’ve ever been asked for years of accounts, turned down despite strong earnings, or told you need to become permanent to get a mortgage, you’re not alone. The good news is this: contractors can absolutely get mortgages, often on excellent terms — when their income is assessed correctly.

At Mortgage Bridge, contractor mortgages are one of our core specialisms. This guide explains how contractor mortgages really work, how lenders assess contract income, and how to secure the right mortgage without unnecessary barriers.

Can Contractors Get a Mortgage?

Short answer: yes — very commonly.

Being a contractor does not prevent you from getting a mortgage. The challenge is that many high-street lenders assess income using employed or self-employed models that don’t reflect how contracting actually works.

With the right lender and structure, contractors can:

• Borrow competitively

• Use strong day rates

• Avoid unnecessary account requirements

Lender choice is everything.

What Is a Contractor Mortgage?

A contractor mortgage isn’t a separate product — it’s a mortgage assessed using contractor-specific criteria.

Rather than focusing solely on salary or dividends, some lenders:

• Use your day rate

• Annualise contract income

• Assess contract history and renewability

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This often results in significantly higher borrowing power than standard self-employed assessments.

How Do Lenders Assess Contractor Income?

This is where contractor mortgages differ most from standard applications.

Day Rate Assessment

Many specialist lenders calculate income as:

• Day rate × number of working days per year

This approach often benefits contractors with strong daily rates, even if they pay themselves modestly.

Contract History

Lenders typically want to see:

• A current contract

• A history of contracting in the same industry

• Evidence of continuity

Some lenders are comfortable with:

• Short gaps between contracts

• Contract extensions or renewals

Limited Company vs Umbrella Contractors

Lenders assess contractors differently depending on structure:

• Limited company contractors: Often assessed on day rate or contract income

• Umbrella contractors: Usually assessed on payslips and contract history

Both can work well with the right lender.

How Long Do You Need to Be Contracting?

There’s no single rule, but common lender requirements include:

• 12 months or more contracting history

• Sometimes less if you were previously employed in the same role

Career continuity matters more than the exact length of time contracting.

Can First-Time Buyer Contractors Get a Mortgage?

Yes — very commonly.

Many contractors are first-time buyers with:

• Strong earnings

• Limited employment history

• Non-standard income structures

With the right lender, first-time buyer contractors often secure mortgages sooner than expected.

What Deposit Do Contractors Need?

Deposit requirements are usually similar to standard mortgages, but circumstances matter.

Typical expectations may include:

• 5–10% deposit for strong cases

• 10–15% or more where income or credit is complex

Gifted deposits from family are widely accepted when declared correctly.

Can Contractors Get a Mortgage with Bad Credit?

Yes — in many cases.

If you’ve had:

• Missed payments

• Defaults

• Short-term financial issues

There are specialist lenders who may still consider your application if:

• Issues are historic

• Contract income is strong

• Deposit is suitable

Contract income does not override credit issues, but it can strengthen affordability significantly.

What Documents Do Contractors Need for a Mortgage?

Typical requirements include:

• Current contract(s)

• Previous contracts or work history

• Bank statements

• Identification and address documents

Some lenders do not require full accounts when using a day-rate assessment.

Common Myths About Contractor Mortgages

“You need two years of accounts.”
Not always — many lenders don’t require them.

“Contractors are treated as high risk.”
Incorrect — many lenders actively support contractors.

“You must earn a salary to get approved.”
False — contract income is widely accepted.

How to Improve Your Chances as a Contractor

Practical steps that genuinely help:

• Maintain consistent contracting work

• Minimise unexplained gaps

• Keep bank statements clean

• Avoid new credit before applying

• Speak to a specialist before choosing a lender

Preparation prevents unnecessary declines.

Real-Life Advice: What Actually Works

From contractor cases we see every week:

• Day-rate lenders unlock far more borrowing

• Industry continuity matters more than contract length

• Umbrella contractors have strong options with the right lender

• Applying to standard high-street lenders causes avoidable rejections

Strategy beats assumption every time.

How Mortgage Bridge Helps Contractors

Contractor mortgages require specialist knowledge.

At Mortgage Bridge, we:

• Assess income using contractor-friendly models

• Identify lenders that use day-rate calculations

• Support limited company and umbrella contractors

• Help first-time buyers and those with bad credit

• Structure applications to reduce decline risk

We’re here to make contracting work in your favour — not against you.

Key Takeaways

• Contractors can absolutely get mortgages

• Day-rate assessments often increase borrowing power

• Limited company and umbrella contractors both have options

• Deposit size and credit history still matter

• Specialist advice significantly improves outcomes

Summary

A contractor mortgage is not about fitting into standard rules — it’s about using the right rules. When contract income is assessed correctly, many contractors can secure mortgages on competitive terms without needing years of accounts or permanent employment.

Whether you’re a first-time buyer, moving home, or remortgaging, understanding how lenders view contractor income puts you in control. With expert guidance and access to contractor-friendly lenders, securing the right mortgage becomes far more straightforward.

This guide provides general information only, personalised recommendations must come from a regulated mortgage advisor

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