Self Employed Mortgages for Contractors
Mortgages for Self-Employed Professionals
If you own more than 20-25% of your income-generating company, you’re classified as self-employed for lending purposes. While self-employment offers freedom and flexibility, it can also present challenges like inconsistent income and mortgage approval difficulties.
Our independent advisors will help you find the best mortgage rates for your situation. With access to a broad range of self-employed-friendly lenders, we can match your income to the right lender, regardless of how you pay yourself.
Whatever your purpose or circumstances, if you’re in need of a self-employed mortgage, contact our team to see how we can assist you.
Tailored Mortgage Solutions for Self Employed Buyers
Secure a Self-Employed Mortgage Pre-Approval in as little as 24 hours with our expert in-house underwriting team. Let us help you find a competitive mortgage deal with up to 95% Loan-to-Value (LTV) today.
In the UK, self-employed individuals can operate under various business structures, each with its unique characteristics and implications for tax, liability, and documentation. Here’s a brief overview of the primary self-employed categories
Limited Company Director
A limited company director manages a separate legal entity with limited liability protection, allowing income to be drawn through a mix of salary and dividends for potential tax efficiency.
Sole Trader
A sole trader owns and runs their business independently, enjoying full control but also bearing personal liability for any business debts.
Limited Liability Partner
A limited liability partner operates within a partnership structure, enjoying limited liability while sharing profits and management responsibilities with other partners.
We Operate Based on Your Day Rate
We specialize in securing mortgages for contractors based on their contract earnings alone.
No tax returns, no accounts
We have helped numerous contractors over the last decade to purchase their first homes and investment properties. We work daily with lenders to offer tailored contractor mortgages rarely found on the High street or Online.
We Operate Based on Your Day Rate
We specialize in securing mortgages for contractors based on their contract earnings alone.
No tax returns, no accounts
We have helped numerous contractors over the last decade to purchase their first homes and investment properties. We work daily with lenders to offer tailored contractor mortgages rarely found on the High street or Online.
Use our calculator to estimate your borrowing power based on your day rate
Please note, that this calculator only provides indications of possible borrowings. Contact us for a free bespoke contractor mortgage recommendation.
Ready to discuss your options?
Don’t let traditional mortgage requirements hold you back. Secure your self-employed buyer mortgage based on your day rate or monthly income and achieve your homeownership goals today with us!
What will be your borrowing limit as a self employed professional?
Your borrowing capacity affects not only your repayment terms but also the size of the property you can purchase. For self-employed individuals, several factors can influence how much you can borrow, including:
- The duration of your self-employment
- Your overall outgoings
- The mortgage providers you approach
- Other relevant factors
Our specialist advisors are here to help you navigate these elements and find the best mortgage solutions. Typically, your borrowing capacity will be assessed based on:
- Your income compared to monthly expenses
- Any outstanding debts
- Regular customer contracts
Meeting a lender’s criteria is crucial for maximizing your borrowing potential.
What documentation do I need as a contractor or self-employed professional for proof of income?
For self-employed individuals, mortgage applications are more complex than for those with regular paychecks. To simplify the process, prepare in advance by:
- Saving a substantial deposit
- Registering on the electoral roll
- Correcting errors on your credit report
- Consulting a mortgage broker
A broker can help you understand lender requirements and improve your application. Lenders typically need:
- 2-3 years of accounts from a chartered accountant
- The last 3 years of SA302 tax forms (or online equivalents)
- Three months of business bank statements
- Proof of upcoming contracts
Preparing these documents and getting expert advice will make your application smoother and increase your chances of approval.
What documentation do I need as a contractor or self-employed professional for proof of income?
For self-employed individuals, mortgage applications are more complex than for those with regular paychecks. To simplify the process, prepare in advance by:
- Saving a substantial deposit
- Registering on the electoral roll
- Correcting errors on your credit report
- Consulting a mortgage broker
A broker can help you understand lender requirements and improve your application. Lenders typically need:
- 2-3 years of accounts from a chartered accountant
- The last 3 years of SA302 tax forms (or online equivalents)
- Three months of business bank statements
- Proof of upcoming contracts
Preparing these documents and getting expert advice will make your application smoother and increase your chances of approval.
Why do self-employed buyers choose us?
Client testimonials
Fee Jav
Client
Fantastic service from Mo and his team at Contract Mortgage Solutions. They made my remortgage process easy and efficient. A real pleasure to deal with, and I highly recommend them as great mortgage brokers.
Goretty Dias
Client
Mo is extremely professional and has helped me with new and remortgage transactions over the past 3 years. Contract Mortgage Solutions is efficient, communicative, and resolves issues well. Highly recommend!
Layla De Freitas
Client
Mo and his team have provided our mortgage for 7 years, helping us remortgage 3 times. Mo goes above and beyond with in-depth market knowledge and excellent service, even with our changing plans. Thank you!”
FAQ’S
Who do lenders consider as self-employed?
To be considered a self-employed individual by a lender, you will own more than 20% to 25% of a business, which is also your main source of income.
You will need to have been self-employed for a minimum of one year to qualify for a mortgage.
You may be a:
- Sole trader
- Company director
- Partner
- Contractor who has set up a limited company
What documentation do I need as a contractor or self-employed professional for proof of income?
The documentation required for proof of income depends on your personal circumstances and how you trade, whether you are a sole trader, limited company, or contractor.
Gathering the necessary paperwork for a self-employed mortgage application can seem overwhelming. However, we are here to streamline the process for you. Our team will guide you on all other documentation required, which may include financial statements, tax returns, business bank statements, and other relevant paperwork.
We’ll work together to ensure you have a complete application that showcases your financial stability and borrowing capacity.
Are mortgages for the self-employed more expensive?
While self-employed individuals may face certain challenges when applying for a mortgage, such as providing proof of income, it does not necessarily mean they will automatically be subjected to higher mortgage rates compared to a permanent, full-time employee.
The mortgage rate that is feasible to you is more likely to depend on your deposit amount, credit rating and overall financial situation.
As long as you are able to provide sufficient documentation for proof of income, you should be at no lesser advantage than if you were to have full time permanent employment. If you face challenges using a high street lender, specialist lenders exist in the market who understand the unique nature of self-employment and can offer more flexible solutions, however these rates may be higher. We can help connect you with the right lender that works for you.
Is it difficult to arrange mortgages for self-employed individuals?
Securing a mortgage can be more challenging for self-employed individuals compared to full-time employees, often due to a lack of awareness about available options.
Self-employed applicants commonly face difficulties such as proving a stable income, paying a low salary, or having a short trading history. As more people choose self-employment, many may be unfairly excluded from the mortgage market despite being financially capable.
Mortgages for company directors can be particularly complex. Lenders may assess income in various ways: some use drawings, others consider a share of gross profit (before or after tax), some average income over 2-3 years, while others look at the most recent year only.
We understand the challenges of being self-employed and believe they shouldn’t block your path to homeownership. With our network of specialist lenders and deep knowledge of the mortgage market, we are well-positioned to find the right solution for you.
I only pay myself a small salary, can I still get a mortgage?
Most limited company directors pay themselves a small salary and then take the rest in dividends. This is standard practice however it often restricts the amount of money you can borrow. By working with us, we can use your income in a variety of other ways to maximise your affordability and significantly boost your loan amount.
Is a mortgage achievable because I’m self-employed?
Being self-employed has its own unique challenges which is why most banks reduce the amount of money you can borrow. That’s why we created a service that puts the ball firmly back in your court. This includes being able to borrow even more than someone who is employed!
How much I can borrow and what will be my monthly payments?
This varies greatly depending on your circumstances—individual lenders use many factors to calculate your borrowing capacity. Use our calculator as a rough guide, but call us for a more accurate figure:
What will be my mortgage interest rate?
The mortgage interest rate depends on multiple factors, including the interest rate set by the Bank of England, your credit score, down payment, loan-to-value (LTV) ratio, and the loan term. Consequently, the interest rate varies for each individual. However, with our experience and strong relationships with contract-friendly lenders, we can find the best deal tailored to your needs.