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Contractor mortgages

Posted on by Naomi Smith

As a contractor you are more likely to be earning a much higher rate than you were when you were a ‘regular employee’ so you would expect banks and high street lenders to be happy to take your business…..but not necessarily!

Given that most contractors’ remuneration package typically will consist of a low salary made up with dividends, this goes against the typical lending criteria of most high street mortgage lenders.

Fortunately the contracting sector is so strong in the UK the financial services industry has adapted and is now able to offer Contractor Mortgages. Not all high street lenders will offer Contractor Mortgages but it is now much more common place than it once was.

A Contractor Mortgage does not differ from any other mortgage in the rate offered, it differs in the way the applicant is assessed.

Lenders will not look at traditional methods of assessment such as annual salary. Instead they will look at things such as your current contract rate, salary plus dividends or your PAYE income if you are an umbrella employee.

There are certain myths that exist around obtaining a Contractor Mortgage such as requiring three years accounts, needing to have been contracting for more than six months or being charged extortionate rates.

All of these myths are not necessarily true and can be mitigated by choosing the correct mortgage provider so please give us a call and we can put you in touch with someone who will be able to help.

Simplyco are expert contractor accountants and give the best advice around to contractors, freelancers, interims and locums to help them with their expenses, making their lives less complicated. To enquire about our services, please give us a call on 01900 898 440 or email

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