Contractor mortgages: advice, calculators quotes and applications 2017

Contractor mortgages: advice, calculators quotes and applications 2016

Our experts can secure a competitively priced mortgage without the need for 3-5 years of accounts

As a contractor, even if it’s your first time contracting, we can help you secure the same competitively priced mortgages that are available to permanent employees. See our trusted guide to mortgages.

Our specialist financial advisors understand how professional contractors work and have relationships with lenders who will lend to you based on a multiple of your annualised contract rate without the need for 3-5 years of accounts.

First time contractor or long term

If you try to secure a mortgage via a “High Street” bank or building society you will probably be asked for at least 3 years accounts, which not only makes things impossible for first time contractors, but can cause a stumbling block for existing contractors who access their income via company dividends.

Fortunately, the landscape has changed over the last decade, with more lenders understanding how contractors work. Our financial advisors can now help you access the best deals and advise on the most competitive mortgage interest rates. See mortgages for contractors in depth FAQ.

We provide professional help Nationwide

We can provide professional help to get you the best deal as a first time buyer, remortgaging your existing property, investing in buy-to-let property, or using the Government Help to Buy scheme..

Up to 95% Mortgages

Did you know contractors can apply for up to a 95% mortgage on any property type with the support of Help to Buy phase 2.

How much money can you borrow?

There are now many more lenders that are prepared to underwrite loans to contractors based on an annualised multiple of their daily contract rate. It is no longer necessary to have 3 to 5 years of proven accounts or earnings to secure a mortgage.

Contractor mortgages calculator

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Some of the best contractor mortgages available on the market

These days contractors can access the same rates in the market as everyone else, and rates will depend on factors such as deposit size, income, period of borrowing, type of mortgage and whether you are a first time buyer. See assessment and qualification criteria.

[Some of the best market rates are published on Moneysupermarket or on MoneySavingExpert. See 10 tips on securing the right loan or mortgage.]

You can also use our calculator below to determine the likely repayments on both an interest only or repayment arrangement. Compare mortgages to renting.

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To get the best deal we recommend using a specialist financial advisor who already has relationships with lenders that are familiar with the contracting market.

Apply now

Do you need a financial advisor to get a mortgage?

Short answer is no, but it will be much quicker and save you lots of hassle if you use a specialist financial advisor who already has relationships with lenders who understanding professional contracting. See can contractors get mortgages.

After the mortgage market review the commissions paid by lenders to financial advisors decreased. Therefore you can expect to be charged an arrangement fee of a few hundred pounds by the advisor, which is only payable once the mortgage has been arranged and you have bought your home. Had trouble as a contractor getting a mortgage?

We offer access to the full range of different lending and qualifying criteria

Different lenders have different lending and qualifying criteria, which frequently changes depending on market conditions and lender preferences. This is where our network of specialist brokers can help you – they keep up-to-date and in contact with many of the lenders and know where best to help you apply.

Going through a contractor specialist means that contractors can often be offered a higher loan than permanent employees would.

Want a free mortgage quotation?

Our specialist contractor financial advisors can secure you a 'High Street' mortgage by making use of the expertise and contacts they have built up over many years.

  • Loans for first time contractors.
  • Mortgages with little or no deposit.
  • All mortgage types: First time buyer, remortgages, buy-to-let.
  • Free quotations
  • Highly personalised service. Real people, not an automated process.

For a free quotation from our contractor specialist mortgage consultants please complete the form below. You will then be contacted shortly with advice on the most appropriate mortgage products available for you. See a guide to the preferred lenders

Through our chosen partners we have been providing specialist advice for contractors since 2004. More info





Contractor Calculator are introducers to Complete Financial Centre. Complete Financial Centre is a trading style of Charles Derby Financial Services (Colchester) Limited, which is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 05668919. Registered Office: Evolution House, Iceni Court, Delft Way, Norwich, Norfolk, NR6 6BB. Your home may be repossessed if you do not keep up repayments on your mortgage. Please be aware that Buy To Let, Commercial Mortgages and Overseas Mortgages are not regulated by the Financial Conduct Authority.

Mortgage products and interest rates

The first choice to make before deciding on an investment product is to opt for either a repayment or an interest-only mortgage. Then there are a number of product choices which resulting interest rates applied.

Some useful terms:

  • Interest Only: This is where you pay off just the interest charged each month. The principle (amount you borrowed) stays the same.
  • Repayment: This is where you pay off the amount borrowed over the period of the mortgage in addition to the interest charged.
  • Base rate: This is the interest rate set by the Bank of England, which then determines interest rates that lenders charge.
  • Standard Variable Rate (SVR): This is the lenders rate charged on standard loans and mortgages and tends to fluctuate according to the base rate.

Mortgages are more expensive as the base rate increases and cheaper as it goes down.

Once you have decided upon interest only or repayment there are the following main products available:

  • Fixed interest or fixed-rate: The interest rate is fixed for a specified period after which the lender’s SVR applies. The advantage is that payments cannot go up during the fixed-rate period, making it easy to plan your finances.
  • Variable rate: Variable rate mortgages can track the base rate, but don’t have to, and include:

    1. Variable Rates/Standard Variable Rates (SVRs): usually higher than most ’tracker’ rates and fluctuate according to the base rate;
    2. Tracker rates: set above the base rate, e.g. base rate plus 0.5%, and will track the base rate precisely;
    3. Discounted rates: a discount on the SVR over a certain period, reverting to SVR or a higher tracker after expiry;
    4. Capped rates: rate can increase or decrease, but cannot increase over a set level.
  • Offset: These take into account the balance of linked accounts, including current account and savings when calculating daily interest on the mortgage loan. Business funds cannot be used but contractors putting aside personal cash for income tax liabilities can be used to offset.
  • Flexible: These allow over-payments, payment holidays and are generally financed according to circumstances. Often the mortgage types mentioned above will also offer some flexibility.
  • Read more on contractors and mortgage products.

Deposits and loan-to-value (or “LTV”)

Loan-to-value is a percentage figure that indicates the size of the mortgage compared to the value of the property. For example, if the property is worth £500,000 and you put down £100,000 deposit then the amount outstanding of £400,000 is 80% of the property – so the LTV is 80%.

Typically, the lower the loan-to-value (LTV) is, the lower the interest rates. Where a contractor has provided a 25% cash deposit, they will generally benefit from more competitive interest rates because the lender considers this less risk.

Your credit history will also have a major impact on whether you will qualify for a mortgage. Missed credit card payments, County Court Judgements (CCJs) and bad credit histories will make it more difficult to secure the most competitive mortgage deals.

How does the mortgage application process work?

Step 1 : Engage a specialist financial adviser

Speak to a specialist financial adviser who understands contractors and is used to dealing with underwriters who lend to contractors. A specialist understands how the limited company remuneration model works and how to present this effectively to the lender.

The process from first engagement with a financial adviser to having an offer of funding legally confirming that the money is in place can take up to six weeks and lenders with the best rates can take even longer. You don’t have to use the company you are currently banking with, and they are unlikely to offer you the best interest rate.

Whether you are looking to buy a new property or refinancing or remortgaging an existing one, ideally you want to start engaging with an advisor at least five to six months beforehand.

Step 2: Secure an initial mortgage agreement

In addition to credit checks you will need to prove your income. This early stage preparation will prevent problems later on during mortgage applications.

The danger of using a non-specialist broker is that they may not understand the necessary due diligence and checking required to ensure that any provisional offer doesn’t get withdrawn at a later date when the formal application is made and more stringent checks are then processed.

Step 3: Prepare information for lenders?

Proving income, and even expenditure, at an early stage is key. In many cases the following documents will be required:

  • Copy of CV
  • Copy of the contractor’s contract and any historic contracts
  • Three months of limited company business and personal bank account statements
  • Proof of ID
  • Proof of address
  • Evidence of funds for the deposit
  • Explanations for unusual activity

Step 4: Securing the mortgage offer

A few weeks after the data has been processed by the lender they will send a formal mortgage offer which typically has a three month shelf life.

The process from first engagement with a financial adviser to having an offer of funding legally confirming that the money is in place can take four to six weeks in the current climate. The lenders with the best rates tend to take longer.

Step 5: If you are buying then start looking!

With the money agreed you can now start looking for a new property and get to the point where a formal offer is accepted and the price confirmed. For refinancing or remortgaging the rest of the process can begin straight away.

The lender will complete a survey on the property and request the detailed income, address and identity proofs that you have already prepared. Assuming no issues, the mortgage offer will go to the borrower and the borrower’s solicitor.

Your solicitor’s copy will include all the legal conditions that must be actioned in order that the money can be drawn down on the date you purchase the property (called the “completion date”). Assuming these are all satisfied, the funds are released and transferred by the lender.

Your financial adviser will work closely with all parties throughout the process until the transaction completes. Back to top

Read: Contractor Doctor: Should I keep cash in my company or pay off my mortgage?

More mortgage information

Contractor mortgage options The latest contractor mortgage options

How you can access the same great range of mortgages via brokers as those offered to employees

Application process and timingsMortgage application process and timings

What you need to be doing and when to secure the refinacing or before looking at properties.

Frequently Asked Questions (FAQs)Frequently Asked Questions (FAQs)

Everything you need to know about getting the the very best mortgage you need for your new home or remortgaging an existing one.

Help to buy mortgagesHelp to buy mortgages

You could qualify for government loans to top up a new property deposit under the Help to Buy scheme.

Can't find what you're looking for? Try looking at our in-depth 2016 mortgage guides or see the latest news on mortgages and loans for contractors.