When it comes to buying a home, many contractors are surprised to find that contractor mortgages can offer significant advantages over traditional mortgages. These tailored mortgage products are designed with the contractor’s unique income structure in mind, helping you secure the right deal without the hassle.
Here’s how contractor mortgages can benefit you compared to standard mortgage options.
1. Income Based on Contract Rate
Traditional mortgages often require proof of salary or several years of accounts, which can be limiting for contractors. With contractor mortgages, lenders may:
Assess your income based on your current daily or hourly rate.
Multiply your contract value to estimate an annualised income (e.g., daily rate × 5 days × 48 weeks).
Avoid requiring 2–3 years of accounts, making it easier to qualify if you’ve recently started contracting.
This approach often results in a higher borrowing amount than traditional assessments.
2. More Flexible Criteria
Contractor mortgages offer more flexibility in terms of:
Employment history: You don’t need years of self-employed tax returns.
Proof of income: Lenders accept signed contracts and bank statements instead.
Gaps between contracts: These are often accepted if you can show regular contract work over time.
This flexibility can make the application process smoother and faster.
3. Specialist Lender Access
Working through a contractor mortgage broker gives you access to specialist lenders who understand the contracting market. These lenders often:
Have more lenient lending policies.
Offer competitive interest rates and terms.
Understand various setups, such as limited companies and umbrella companies.
This can save you time and reduce the likelihood of rejection.
4. Tailored Mortgage Advice
Contractor mortgages come with tailored advice from brokers who specialise in your situation. Instead of trying to fit a traditional mould, your application is customised to reflect your actual earnings and circumstances.
Final Thoughts
Contractor mortgages offer clear benefits over traditional mortgages, especially when it comes to income assessment, flexibility, and lender choice. If you're a contractor looking to buy or remortgage, choosing the right product can make all the difference.
At Contractor Mortgage Solutions, we help contractors like you find mortgages designed to work with your lifestyle and income.