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Contractor Joint Mortgage (Part 1)
Lee Gathercole explains how a joint mortgage works if you are a contractor. Episode one of two, recorded in July 2025.
Podcast approved by The Openwork Partnership on 29/07/2025.
How does being a contractor affect your eligibility for a joint mortgage?
Contracting is a mortgage challenge in itself. If you’re looking to buy with your partner or a friend you’re just adding more to the mix. It can get more complicated, and it’s not necessarily straightforward if you are a contractor.
In terms of how it affects your eligibility, normal contractor rules would apply. You might need a certain time in your role and more documents could be required. Lenders may ask a few more questions that are a little bit more challenging.
Maybe your partner is employed in a permanent job – in which case the lender might just want three months’ payslips from them, which is all quite straightforward. It’s absolutely possible to buy with a friend or partner as a contractor. It just adds more to the mix, that’s all.
What documentation is typically required for contractors applying for a joint mortgage?
Each lender is different in how they view contractors, and it depends on the type of contractor you are. A typical requirement, though, would be a copy of your latest contract showing whether you’re paid a daily or hourly rate.
If it’s a short contract for three or six months, they may want to see contracts over a longer history, maybe 12 months’ or even up to two years’. More documents will be required than for a typical employed person.
If you submit self-assessments and pay your tax direct with HMRC yourself, lenders might require those self-assessment documents, maybe over the last one or two years.
Again, a mortgage broker will help you understand what type of documents are needed, but there’s a little more than just the latest invoice or payslip. It’s just because lenders like to see a longer period of you earning that income for their assessments.
Are there any specific requirements or restrictions for contractors who are considering a joint mortgage?
Lenders want to know how long you’ve been contracting. If you’ve only been doing it for a week, for example, or a few months, it can be more difficult to obtain a mortgage. Banks do like to see that you’ve been contracting for a period of time.
We can counteract that if you’ve been in the same industry for a long time. You might be in IT, for example, and employed through a company for a few years and then you go into contracting.
There is a good argument there that you’ve got experience – while you’re new to contracting, you’ve been doing the role for a few years.
As a contractor, you could be restricted in terms of how much you can borrow. If you’re charging a day rate of £500 a day, lenders use specific formulas to assess your income. It could be five times that £500 as your weekly income, multiplied again by 46 or 48 weeks to get an annual total. They won’t use the full year.
Overall, though, it’s more around the history of contracting in terms of what banks like to see.
How can I improve my chances of being approved for a joint mortgage as a contractor?
This goes for anyone buying with or without a contract, but the earlier you get in touch with a mortgage broker, the better.
It’s important to get your documents lined up, especially around the history of your contracting. Copies of your contracts are great. Don’t throw old ones in the bin – just keep those files handy, because lenders like to see that history.
The better prepared you are, the better your chances of being approved, particularly on a joint mortgage. You don’t have to have a property in mind. A mortgage broker will help you understand what documents will be required, even if you’re just looking to buy in the next couple of years – we can help you prepare so you keep those documents safe.
Can contractors include their spouse or partner in a joint mortgage application?
Absolutely, yes. If you’re contracting you can add a spouse or partner who may or may not work. Normal rules would apply, providing they pass credit scoring and there’s a good reason why they’re on the application.
Are there any additional considerations for contractors applying for a joint mortgage compared to employed individuals?
Yes, it comes down to those two key things – the history and the income evidence. For an employed individual, lenders are quite happy to offer you a mortgage from day one of starting a role.
Whereas if you’re contracting, they like a longer history or at least some experience in that role. That also comes with more documents, such as your contracts – while someone who’s employed might just need three payslips. It can be a little bit more complicated.
What are the advantages and disadvantages of applying for a joint mortgage as a contractor?
It depends. Everyone’s different. There could be advantages of applying on your own, or advantages of buying in joint names. If you both work, it means you can potentially borrow more and have a better chance of getting the loan amount you require.
A mortgage broker like ourselves can talk you through the pros and cons of applying jointly or individually, and discuss things to think about. There’s no hard and fast rule.
How can contractors navigate potential challenges or obstacles when applying for a joint mortgage?
The biggest challenge with contractors is just having those contracts and documents ready. A lot of people get rid of old documents – they don’t keep them forever. But hanging onto those contracts is really key for mortgages because lenders often like to see a longer history.
Planning ahead and speaking to a professional will help you best prepare for any challenges or obstacles moving forward.
Approved by The Openwork Partnership on 29/07/2025.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR PROPERTY. 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.
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Contractor Joint Mortgage (Part 2)
Continuing the conversation on joint mortgages and contractors with Lee Gathercole. Episode two of two, recorded in July 2025.
Podcast approved by The Openwork Partnership on 05/08/2025.
What factors do lenders take into account when assessing the affordability of a joint mortgage for a contractor?
All banks can look at things differently. If you’re walking down the high street and you talk to five banks, it’s highly likely you’ll get five different borrowing amounts. It does really vary.
This is where we come in – to help you understand what you really can borrow. If you’re a contractor, lenders tend to look at your day rate. They multiply your day rate by five to get a figure for the working week, and then multiply that again by 46 or 48 weeks over the year.
They don’t take the full 52 weeks because they understand you must take some holiday during that period. That does work quite favourably for day rate contractors in how much they can borrow. But contractors can get really varied results.
We often have clients who have spoken to their bank and not quite got the borrowing they need – because that bank doesn’t treat contractors very favourably. But if you’ve had an answer you’re not happy with, it doesn’t mean all the banks are the same. Pick up the phone and speak with a broker to understand what your options are.
Are there any specific types of joint mortgage products designed for contractors?
No, not as such. Some banks are just more flexible with contractors and professionals. If you’re an IT contractor, certain banks will view you more favourably than others. There can be mortgages specific to contracting professionals, which sometimes offer favourable rates.
There aren’t many of them, to be honest, if any – they just pop out of the woodwork every now and then. As we speak in July 2025 there are not many of those types of mortgages. It’s more about finding lenders who are more favourable to contractors in general.
Can contractors benefit from any government schemes or initiatives when applying for a joint mortgage?
Yes, the good news is that as a contractor, you’re eligible for the same government schemes as someone who is employed. There are no issues there, particularly on a joint mortgage.
As we speak in July 2025, low deposit mortgages are available at 5% or even less, along with schemes like shared ownership and Right to Buy. They’re all very much available to you. Speaking with someone about the schemes available at the time is helpful, because that market is always changing.
What should contractors know about the income assessment process for a joint mortgage application?
It’s all about the documents that are required, and going back to that longer history. Lenders like to see six, 12 or 24 months’ history of contracting. With someone who’s employed they’ll probably just need three months’ payslips or less.
The big difference in having your income assessed as employed or a contractor is that history. As I mentioned earlier, those day rate formulas are all very different. There isn’t a single approach to income assessment for every lender. It’s all treated very differently around each individual.
How does employment history for contractors impact the likelihood of being approved for a joint mortgage?
It’s probably the biggest factor impacting your likelihood of being approved. Generally, they like to see one or two years’ history. But if you’ve been working in the industry for a few years we may be able to get around that.
You may have been employed in an IT role for a few years and started contracting just a month or two ago – that doesn’t necessarily mean you won’t get a mortgage. Some lenders will consider your experience in IT overall. History plays a big part, but if you’ve just started contracting you could still get approved.
Can contractors include income from multiple sources in a joint mortgage application?
Absolutely, yes. It depends on the income source. We can use child benefit, as an example, or the rental income from a property investment. You might have a side hustle – another little business which we see quite often now. That is acceptable, subject to the lender.
A lot of income sources are acceptable, providing there’s a track record and history. That’s not generally an issue.
I’m a contractor with a bad credit history. How will that affect a joint mortgage application?
How it affects your mortgage depends on the severity. A lot of people think they have bad credit because they haven’t taken any out. Their score looks particularly low – but that’s not generally an issue. I wouldn’t necessarily consider that bad credit.
On the flip side, your score may be low as you’ve had a few missed payments, you’ve defaulted on something or had a county court judgment (CCJ). Parking tickets are a common cause of CCJs.
Something like that can be a bit of a challenge, but you can still generally get a mortgage with some blemishes on your file. If it’s more severe – a bankruptcy or an Individual Voluntary Arrangement (IVA) – it’s more limited, but not impossible. Having bad credit might just impact which lender you can go to and interest rates.
You’ve demonstrated how a mortgage broker can help – anything else to add?
Just to repeat that for a contractor, it is more complicated and can be more difficult to get a mortgage.
Get started with preparing and understanding your options as early as possible. Don’t go and find a property first and then try to work it out. Get advice first and then look for that dream home. That’s all I would recommend.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 05/08/2025.
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