NatWest

NatWest Contractor Mortgages

Are you a contractor in search of a mortgage solution that understands your unique circumstances? Look no further than NatWest, one of the leading High Street lenders with a dynamic approach to contractor mortgages. We recognize and consider contractors operating through their limited company based on their gross contract value, including both day rate and hourly-rate contractors.

The NatWest Advantage

At NatWest, we stand out as a contractor-friendly lender with a commitment to providing personalized solutions. Our underwriters are exceptional, and our team has established an excellent rapport with decision makers, allowing for discretionary decisions when necessary. We are willing to lend and take an individual view on our clients’ circumstances, ensuring that you receive the best possible support on your homeownership journey.

First-Time Buyer Mortgages

For those exploring the possibility of becoming first-time homebuyers, we have provided detailed information regarding first-time buyer mortgages for your convenience. We believe in making the mortgage process as transparent and accessible as possible, ensuring that you have the information you need to make informed decisions.

Contractor Requirements

Our approach to contractor mortgages is designed to cater to a wide range of contract workers. Here’s what you need to know:

PAYE Contract Workers

We require evidence of one year’s employment history for PAYE contract workers, including agency, fixed-term contractors, and umbrella contractors. This can be demonstrated through two six-month contracts or four three-month contracts. Additionally, a contract must be in place for a minimum of three additional months.

Zero-Hours Contractors and Piece Workers

For zero-hours contractors or piece workers, we consider their earnings history over the past 12 months, ensuring that we account for their unique employment arrangements.

CIS Contractors

While CIS contractors are technically self-employed for tax purposes, we treat them as “EMPLOYED” on our Affordability Calculator, AIP, and Application Form. We use the gross income figure (minus expenses) from the contract vouchers/statements over the last 12 months. Applicants also need to provide a current contract and may be asked to confirm ongoing work availability.

NatWest’s Day Rate Contractor Policy

Our policy for day rate contractors is designed to provide flexibility and inclusivity:

Minimum Gross Contract Value

NatWest requires a minimum gross contract value of £75,000 for day rate contractors. This equates to a day rate of £327 based on 46 weeks.

Hourly Rate Contractors

We also consider contractors on an hourly rate, provided the contract meets the minimum stipulation of £75,000.

12-Month Contract Requirement

We require a contract that spans a complete 12-month period. For example, if you have been contracting for 7 months, we would expect you to have a contract for an additional 5 months, totaling 12 months with 3 months remaining.

Flexibility in Contract Duration

NatWest understands that contracts are often short-term, and therefore, we do not insist on lengthy time remaining. Having at least 4 weeks remaining is generally acceptable. If you have less than this, we may ask for an extension or a new contract that you will be transitioning to.

Consideration of Shareholding

When calculating the cumulative shareholding of a limited company, NatWest considers only the portion that you hold. For instance, if you have a 75% shareholding, we will utilize 75% of your gross contract value.

Emphasis on Continuous Employment History

NatWest prefers to see continuous employment history and is not fond of significant gaps. While taking holidays or a few weeks off is not an issue, if you have several months off within the past 12 months, it may be more beneficial to explore other contractor-friendly lenders. NatWest allows for up to 6 weeks between contracts, which is quite generous.

Gross Contract Value Calculation

Calculating your gross contract value with NatWest is straightforward and transparent:

We typically multiply your day rate by 5 days and then by 46 weeks to determine the gross contract value.
Importantly, we do not use the average of the previous year to calculate the average day rate.
For example, if your day rate is £327:

£327 per day x 5 days x 46 weeks = £75,210 gross contract value.
If your hourly rate is £43.50:

£43.50 per hour x (specified number of hours or 37.5 hours default) x 46 weeks = £75,037.50 gross contract value.

Required Documentation

To streamline your application with us, we kindly request the following documents:

Proof of Identity and Address

Proof of ID, such as a Passport or DVLA Licence.
Proof of Address, demonstrated through Utility Bills or Council Tax Bills.

Contract Documentation

Your current contract with signed and dated Terms and Conditions.
Documentation highlighting a contract renewal, demonstrating your ongoing employability.

Evidence of Your Work History

An up-to-date CV showcasing your excellent work track record.

Financial Documentation

Personal and business bank statements for the past three months.

Property Purchase Documentation (if applicable)

If you’re in the process of purchasing property, proof of deposit or a gifted deposit letter may be required. We provide you with the required template for this letter, ensuring a smooth process.
Having all the required information upfront streamlines our process and enables us to present your application to NatWest’s contractor mortgage underwriters in a professional manner. This approach ensures a swift and positive decision, bringing you one step closer to achieving your homeownership goals.

Why Choose NatWest?

With our extensive experience and commitment to flexibility, why take the risk with your mortgage application? We are contractor mortgage experts who will handle your application with the utmost care to ensure success from the outset. Your journey to homeownership starts with NatWest, where we understand and support your unique circumstances. Contact us today to begin your path to homeownership.