Contractor Mortgages

Podcast approved by The Openwork Partnership on 23/09/2025.

Are there any government schemes for contractors?

Obviously, we’ve seen the likes of Help to Buy in various forms in the past, which has been very successful. There aren’t any specific government schemes particularly for contractors, but you would usually have access to any schemes that are available.

We’ve currently got the New Home scheme and the First Start scheme, which some new build developers are part of. As long as you qualify for the mortgage side, you’ve got the deposit and meet the criteria of those banks, there’s no reason why you would be excluded from government schemes. [Information correct at the time of recording in September 2025]

Will I need a higher deposit as a contractor?

As a contractor, your options may be limited. Most banks and building societies are very black-and-white in how they approach affordability.

When they’re looking at payslips for a permanently employed person, it’s quite straightforward to assess the income. A contractor’s income can fluctuate, and the terms of your employment might be different – you’re likely to be on a fixed term contract, for example.

In terms of deposit, you usually just need to meet the minimum deposit required with that lender. As a contractor, you don’t generally need to increase that. We’ve helped many contractors secure a property with a 5% deposit.

You simply need to meet the criteria of that lender and they need to be happy to lend you the mortgage you need at 95%. If you do have a smaller deposit, your credit score needs to be very good or excellent.

Other factors might also determine what deposit you need to put in – such as the type of property you’re buying. Some banks might want you to put a slightly bigger deposit in for a flat than for a house. The same goes for new builds versus older properties.

Can you get a mortgage as a contractor inside IR35?

When IR35 launched, we saw a lot of lenders working out how to approach this. If you are a contractor inside IR35, there are potentially still options available. Don’t rule yourself out or think you can’t get a mortgage.

It might be more challenging, as some lenders haven’t fully adapted their criteria and may not have a full understanding of the IR35 rules and how it works.

Generally, we haven’t seen any problems with clients inside and outside of IR35 in getting a mortgage. Lots of other factors that might come into play, such as credit history, income, financial commitments, deposit amounts.

There are options available. You just need to speak with a broker that specialises in this field.

Do I need to have a minimum length of contracting work history to apply?

Most banks and building societies do want to see a history of contracting.

Obviously, if you’re in a permanent employed role, the risk of your employment coming to an end seems much lower to a lender. On a fixed term contract, you’re guaranteed employment for six months, but what happens next?

If you’re working in a contracting role and you’ve never had a contract renewed, or it’s your first fixed-term contract, banks are more hesitant. They want reassurance that your contract will be renewed or you’ll find work when your contract ends.

They work around that by requiring that you’ve had your contract renewed multiple times, or proof that you’ve been working in a contracting role for one or two years. Two years is a common requirement, especially on the high street.

Some banks are a bit more flexible. We’ve helped clients who have gone from a permanent employed role to a contracting role. It’s the first contract, but because they’ve been working in the same line of work, it’s not too different. Most banks would turn them down, but certain lenders are more flexible.

We also helped another client who’d gone into a brand new industry on a fixed-term contract for 12 months. We secured them a mortgage with a building society as soon as they’d started the contract and confirmed it was of a 12+ month duration.

So there are options – you’ve just got to be really smart with who you’re approaching.

Can I get a mortgage on a zero hours contract?

This can be trickier. With zero hours contracts, banks and building societies tend to be in one of two camps. Either it’s a straight no, because they don’t like lending to borrowers on zero hour contracts, or they will require proof you can sustain that income.

Their worry is that you’re not going to get any hours – you’re financially vulnerable. They don’t want to put your home at risk of repossession. To get a mortgage, you need to evidence that you’ve been doing it for a long time – again, one to two years is usually required.

The banks normally look at an average of your income over the last year or two. That gives them an accurate view and more confidence that the income will be sustainable going forward.

So if you do approach a bank and they don’t lend to zero-hour contractors, don’t assume all banks are the same – they’re not.

Can I still get a mortgage if I have gaps between contracts?

This comes up from time to time. I’ve helped a client who was turned down by a bank because of a gap of four or five weeks between their last two contracts.

They might have been contracting for five years, but that gap is still an issue. Generally gaps of as little as over two weeks can cause problems with some lenders. If it’s over four weeks, you’ll start to find more lenders unwilling to accept you.

That said, I can think of a contractor I’ve helped who had three months off between contracts. She’d been contracting for a long time and wanted to take a break to be with her family over the summer holidays – we explained that and the lender was happy.

The reason for the contract break is important. Is it that you couldn’t get work or did you decide you didn’t want to take work? They’re two very different things.

A broker like us understands how contracting works. We gather the information we need and ask questions so we can approach lenders that will hopefully say yes to you, rather than put up a brick wall.

How does the remortgaging process work as a contractor?

With remortgaging, the main difference between an employed person in a permanent role and a contractor is how you prove your income. The rest of the process is the same – you still need to apply for the mortgage and appoint a solicitor.

The main difference is the lender’s criteria for assessing your income. If you’re a permanent employee, they ask for one to three months’ payslips and look at your salary, commission, bonuses etc.

If you’re a contractor, they’ll probably want a copy of your latest contract, and perhaps your last few contracts to evidence the history. If you get pay slips as well, or invoices if you’re self-employed, they’ll want those for the last three months too.

The rest of the remortgage process works in the same way. They still carry out a credit check and a valuation of your property.

A broker will help you understand whether you have access to a high street bank or whether you need a specialist lender. It’s worth having that chat, because interest rates and fees can vary widely. Finding a more competitive lender can save a lot of money.

How do I apply for a mortgage as a contractor?

To apply, you need to gather the documents we need. We would normally ask a contractor about their history of contracting. Any contracts from the last two years would be really helpful, showing the income you received, the start and end dates and the terms of that contract. That helps us approach a wide range of lenders for you.

A lot of contractors will receive payslips. The last three or six months’ will generally be needed, so having those to hand also helps.

Then it’s the standard documents – a copy of your passport or driving licence for ID, and three months’ bank statements are usually required. That proves the income is being paid into your account and gives a view of your monthly spending on food, utility bills and council tax, plus any financial commitments like loans or childcare costs.

We usually ask for a copy of your credit report as well, to see if there’s anything to be concerned about – or to take into account when recommending a lender for you.

Having all that information gets us a good success rate in getting you approved first time. Gathering those documents ahead of a mortgage application puts you in a really strong position and saves you time down the line.

Should I find a specialist mortgage broker to help me apply for a mortgage as a contractor?

In my opinion, yes. It’s a specialist area of the market, where brokers learn from helping clients in these positions.

I’ve been advising for 13 years and I’ve seen lots of different scenarios and situations. It might not be more than you being a contractor – you might also have a small deposit, or be buying an unusual property. You might have blemishes on your credit report or a lot of financial commitments.

When you start adding these complexities together, it reduces your opportunities with different banks. An experienced broker leans on their relationships with banks and building societies – plus we have a full understanding of how you work and how lenders view you.

There might be a building society that we know would consider lending to you – yet other brokers might not be aware of that. It could be more competitive than going straight to a specialist lender that we know will help you, but will charge you more.

What steps can I take to strengthen my mortgage application as a contractor?

Clients who have the smoothest journey in applying for a mortgage are those that have put some preparation in. The first thing is to have a chat with a broker like us.

We’ll talk you through your options and ask questions to establish the most suitable lenders for you, what the monthly payments will look like and what kind of interest rates you can get.

We talk you through the steps to set you up for lender approval. Then it’s preparing those documents, ready to pass on. We ask our clients to complete a mortgage questionnaire, to gather the information we need about you, and being prompt with that allows us to work quickly for you.

The final thing is your credit report. Keeping an eye on your credit score is a good habit to get into, because many people find things they didn’t know about – or that shouldn’t be there. Don’t risk discovering those when it’s literally too late and there’s no time to appeal. It might mean you’re looking at a higher interest rate.

If you’re picking up on those things earlier, you’re giving yourself time to do something about them. You’ll have time to appeal a late payment, for example, and get it removed. Seeing your credit report helps us identify suitable lenders the first time.

What else do we need to know about getting a mortgage as a contractor?

I love helping contractors, because these can be complicated cases. But having helped many before, we understand what the contracts look like and what the terms are – so we know straight away which high street banks to try.

Don’t be disheartened if you speak to a broker or apply with a bank and they say you can’t get a mortgage. They might say you’ve got to wait two years. That’s not good to hear if you were hoping to get on the property ladder.

Don’t be disheartened – pick the phone up and we’ll spend 20-30 minutes with you and give you an idea of whether you can get a mortgage. It might be that we can’t right at the moment, but we’ll help you get a plan in place to become mortgage ready. But often, we can help people buy their dream home sooner rather than later.

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

For specialist tax advice, please refer to an accountant or tax specialist.

Approved by The Openwork Partnership on 23/09/2025.