Mortgages for Contractors in the UK: A Complete Guide

jake04097
Jan 12
2 min read

Getting a mortgage as a contractor in the UK doesn’t have to be complicated. While traditional lenders often struggle to assess non‑standard income, specialist lenders and brokers now offer flexible solutions for contractors paid through CIS, fixed‑term contracts, day rates, or umbrella companies. Here’s everything you need to know about contractor mortgages.

What Is a Contractor Mortgage?

A contractor mortgage is designed for people who don’t fit the standard PAYE model. Instead of relying on years of accounts or payslips, lenders may assess affordability using your contract rate, CIS vouchers, or umbrella payslips. This approach opens the door for contractors who might otherwise be excluded by high‑street lenders.

CIS Mortgages (Construction Industry Scheme)

For contractors working under the Construction Industry Scheme (CIS), lenders can use your gross contract income rather than net pay after tax deductions.

Key benefit: You don’t need 2–3 years of accounts; lenders may accept recent CIS vouchers and bank statements.
Documents required: Proof of ID, address, CIS payslips or vouchers, and recent bank statements.
Best for: Construction workers who want lenders to recognise their true earning potential.

Fixed‑Term Contract Mortgages

If you’re employed on a fixed‑term contract, many lenders will treat you similarly to permanent staff, provided you can show continuity of employment.

Criteria: Typically, at least 12 months of contract history and proof of renewal or extension.
Evidence: Consecutive contracts or payslips covering the past year.
Best for: Agency workers, healthcare professionals, and IT contractors who move between fixed‑term roles.

Day‑Rate Contractor Mortgages

Day‑rate contractors can often borrow based on their daily rate annualised (e.g., £400/day × 5 days × 48 weeks = £96,000 annual income).

Pioneered by Halifax, this method is now widely accepted by specialist lenders.
Advantages: Reflects your real earning power without needing full accounts.
Best for: IT, consultancy, engineering, and oil & gas contractors with high day rates.

Umbrella Company Mortgages

If you’re paid through an umbrella company, lenders may treat you as employed, but underwriting can vary.

Evidence required: 12 months of payslips or contracts, plus proof of ongoing work.
Challenge: Some lenders don’t fully understand umbrella structures, so using a specialist broker is crucial.
Best for: Contractors inside IR35 or those preferring the simplicity of umbrella payroll.

Why Use a Specialist Broker?

Most contractor‑friendly lenders operate through specialist underwriting teams, not high‑street branches. A broker who understands contractor income can:

Present your documents in the right format.
Match you with lenders who accept CIS, day rates, or umbrella payslips.
Save you time and avoid declined applications.

Final Thoughts

Contractor mortgages are more accessible than ever. Whether you’re CIS, fixed‑term, day‑rate, or umbrella, there are lenders who understand your income structure. The key is working with a specialist broker who can package your application correctly and connect you with the right lender. Book a no pressure call with us and lets get started.