First-Time Buyer Contractor Mortgage

How is a mortgage calculated for a contractor that is a first-time buyer in the UK?

It all comes down to affordability – what you’re able to evidence in terms of income – and your financial position. There are so many different factors. So, it’s easiest to just jump on a call with one of our advisers and we’ll go through your circumstances in more detail.

We can usually answer those questions in that first call – how much you can borrow based on your income, what evidence you’re going to need and everything else.

What documents do I need to apply for a mortgage as a contractor and a first-time buyer? How do I prove my income?

This is the first time you’re doing this, so you’re probably not going to know what documents a bank or a mortgage adviser is going to ask for.

It does come down to the type of contractor you are. If you’re in construction as a CIS contractor, a mortgage adviser or bank may ask for your invoices – if you pay tax on those – or your payslips. Alternatively, they may look at your last two years’ self-assessments, tax calculations or accounts.

Or, you could be an IT contractor and they look at your contracts. They might just look at your daily rate or your invoices, or they may also look at your self-assessments, tax calculations or tax returns if you submit those.

The usual documents would also apply, like three months’ bank statements, identification and maybe your credit report. Those are standard across the board, but for a contractor especially, it can really vary in terms of documents.

The best advice is to get that conversation in earlier with someone qualified, who can give you guidance around the documents that might be needed.

What if I have bad credit as a contractor and I’m looking at my first mortgage?

There are a few things that can affect the process. The first is the number of banks and lenders you’ll have access to. As a contractor, not every bank will lend to you and those that do will each have their own criteria for you to meet.

A lot of those banks will want a clean credit history – so no missed payments, no defaults, no CCJs, certainly in the last three or six years. If you do have any of those, it doesn’t mean you can’t get a mortgage, but you should expect to pay a higher interest rate.

You need a lender that will tick both boxes – to be happy with the contracting side and also the missed payments or defaults. You might end up paying a bit more in interest as you’re going to higher risk, adverse credit lenders.

Again, it depends on the amount of late or missed payments and how recent they were. Have you got any defaults, CCJ balances, have they been cleared? What were the circumstances that led to it?

We would sit down and go through your credit report to help you understand what lenders you’ll be looking at and what kind of interest rates you’ll be paying.

Can I get a Buy to Let mortgage as a first-time buyer contractor?

Yes, you can potentially get a Buy to Let mortgage as a first-time buyer. The first thing is that purchasing a Buy to Let as a first property can be a challenge in itself. You may be assessed slightly differently from a homeowner buying their first investment property.

Minimum income rules would apply, but the biggest challenge is the level of deposit. Typically with a Buy to Let, the sweet spot for a deposit is around 20% to 25%. That’s a lot higher than the 5% required in the residential market.

The added challenge for a contractor is how you evidence your income. That just depends on the type of contractor you are. Do you meet the minimum income requirements, and can we get the borrowing you need?

It’s certainly possible, as long as you have the deposit required, although not as many lenders offer this type of mortgage.

How can I improve my chances of getting a mortgage as a contractor and a first-time buyer?

If you think you’ll be applying for a mortgage in the near future, whether to buy a property, move or remortgage, the best way to improve your chances is talking to a broker like us.

We’ll explain what documents you’ll need and make sure everything fits your expectations on budget and how much you can borrow. Then, start to gather those documents together: bank statements, payslips if you get them, copies of your contract and ID.

When you’re ready to proceed you’ll then have all the documents to hand, which speeds up the process. The third thing to do is keep an eye on your credit report. You can sign up with lots of credit reference agencies for free.

Make sure you’re aware of anything on your credit report that shouldn’t be on there, because if you catch it early you’ve got time to do something about that. We’re here to talk you through your options and help you build up that plan.

If I want to apply for a mortgage as a first-time buyer and a contractor, how can a mortgage broker help?

Preparation is key. All banks will look at you differently, and you’ll get very different results from each one. A mortgage broker who typically deals with a contractor and understands how the income works is a huge help. We understand how to best present your income for the best chance of approval.

Key Takeaways:

• Being a first-time buyer and a contractor makes the mortgage application process generally trickier than for permanently employed individuals.
• Many lenders want to see one or two years of contracting history, although some may lend with no history at all, depending on the contract length and experience.
• There is no set formula. For an IT contractor, a daily rate is often multiplied by 5 days a week and 46-48 weeks a year. For a CIS contractor, banks may look at two years of tax returns or the last three months’ invoices.
• Generally, you could borrow anything from four times up to six times your income (as of November 2025).
• The simplest way to find a mortgage is to work with a broker experienced in helping first-time buyers and contractors to best present your income for approval.
  
  

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

MOST BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

Approved by The Openwork Partnership on 23/12/2025.