Contractor mortgages: what you can borrow
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Contractor lending is a solved problem in 2026 — if you know which lenders and brokers to use. The trick: many high-street lenders underwrite a day rate × 5 as an annualised salary-equivalent instead of requiring two years of accounts.
The day-rate multiple
A contractor on £500/day can be assessed on £500 × 5 × 220 = £550,000 of "salary-equivalent" income by contractor-friendly lenders (vs £28,000 of salary + dividends on paper). Multiples of 4.75–5.5× that figure are common; some specialist lenders go further with 25–50% deposits.
What lenders typically require
- Day-rate contractors: current contract (or chain of renewals), CV, 3–12 months bank statements
- LTD owners with accounts: 2+ years trading helps, but day-rate underwriting often bypasses it
- Contracts extending at least 6–12 months beyond application
Practical moves a year out
- Use a specialist contractor broker — general brokers submit you to the wrong lenders and the declines sit on file
- Keep salary low, dividends clean, books filed — even under day-rate underwriting, lenders sanity-check the accounts
- Avoid gaps: renew contracts before expiry, keep the chain unbroken
The full document checklist lives in the mortgage guide; work out your salary-equivalent from your real rate with the calculator.
The renewal chain problem
Lenders want the contract to outlive the mortgage offer: most ask for 6–12 months of remaining term at application. A 3-month renewal creates a gap — so renew before applying, ask for a 12-month extension even at the same rate, and keep signed renewals in one file as a chain. Self-employed underwriting also sanity-checks consistency: day rate, invoices, bank credits and the accounts should tell one story. Wildly different dividend patterns vs contracts invite questions nobody wants. Start the mortgage conversation 6 months before you need the money, not 6 weeks — specialist brokers price nothing for early conversations and it transforms the options you'll have.
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