Securing a mortgage as a contractor can feel harder than it should — especially when your income doesn’t fit the usual payslip model. Halifax is widely seen as one of the more contractor-friendly high street lenders because they can assess affordability using your current contract day rate, rather than relying solely on years of accounts.
In this guide, we’ll cover how Halifax contractor mortgages work, who they tend to suit, where applicants can get caught out, and how to improve your approval chances.
Why Halifax is popular with contractors
Halifax is popular because their underwriting can be more practical for contractors than many “standard” lenders. Instead of focusing only on historic income, Halifax may use your contract value to assess affordability, which can improve borrowing potential (especially for limited company contractors and professionals moving into contracting).
This approach can be particularly helpful if you:
- have recently moved from PAYE into contracting
- have strong earnings but limited trading history
- want a high street lender with mainstream products and processes
Key features of Halifax contractor mortgages
Contract-based income assessment (day rate)
Halifax may assess contractor income using your gross day rate, multiplied by working days and weeks.
Example (corrected to 46 weeks):
A contractor earning £500 per day, working 5 days per week, can be assessed at:
£500 × 5 × 46 = £115,000 per year.
Using 46 weeks better reflects realistic working patterns (allowing for gaps, holidays, and non-billable time), and it’s a common industry approach for contractor affordability modelling.
Day 1 contractor acceptance (in the right scenarios)
Halifax is often suitable for Day 1 contractors, depending on the overall profile. If you’re newly contracting, presenting your application clearly matters — especially where you’ve moved from PAYE in the same sector and can show continuity of work.
Broad occupation coverage
Halifax is well-known for IT contractor cases, but contractor applications can also work across other professional sectors — for example engineering, construction, healthcare, consulting, and project-based roles — provided the case fits their affordability and stability checks.
Competitive high street products
Because Halifax is a mainstream lender, they often have competitive rates and product options (subject to the market at the time). For many contractors, that “high street” pricing is a big reason to consider them early.
Halifax contractor mortgage eligibility criteria (what usually matters most)
Contract duration remaining
Halifax typically wants to see that your contract has enough time left to evidence continuity — commonly at least 4–6 weeks remaining at application. If you’re near the end of a contract, timing and presentation becomes important.
Day rate expectations (often stricter outside IT)
Some contractor scenarios can be assessed more tightly depending on the sector and how the income is evidenced. In many cases:
IT contractors can be assessed without a specific minimum day rate threshold
Non-IT contractors may need a stronger day rate (often quoted around £326/day in broker circles), though outcomes can vary based on the full case (deposit, credit profile, role stability, and overall affordability)
Track record and continuity
Halifax will still want to see that your income is sustainable.
That can mean: a contracting history, or a strong PAYE history in the same line of work, plus a contract that supports continuity
Benefits of choosing Halifax as a contractor
- Contract-led assessment: less reliance on full accounts where contract income is clear
- Potentially higher affordability: day rate can be more favourable than net profit figures
- Day 1-friendly (in suitable cases): useful for contractors transitioning from PAYE
- Mainstream lender options: broad mortgage range with a familiar application process
Challenges to consider
- Contract timing: if your contract is close to ending, you may need to renew first or evidence the next contract pipeline
- Non-IT affordability rules: some sectors can face stricter interpretation (including day rate expectations)
- Documentation and presentation: even with a strong profile, contractor cases can be declined if packaged poorly
- Practical tip: A contractor-specialist broker can present your income correctly (and sanity-check whether Halifax is genuinely the best fit, or whether another lender will give you a cleaner approval path).
Case Studies
Case study 1: Day 1 IT contractor moving from PAYE
Profile: Software engineer, first contract started 3 weeks ago, strong PAYE history in same role, 15% deposit, good credit.
Contract: £550/day, 5 days/week.
Income assessment example: £550 × 5 × 46 = £126,500.
Outcome: Halifax-style contract assessment supports stronger affordability than PAYE transitional income alone. Broker packaging focuses on continuity of sector and role.
Case study 2: Non-IT contractor with strong deposit and stable history
Profile: Project manager (construction), contracting 2+ years, 25% deposit, clean credit, consistent renewals.
Contract: £400/day, 5 days/week.
Income assessment example: £400 × 5 × 46 = £92,000.
Outcome: Contractor income fits affordability well; the stronger deposit improves overall profile and lender confidence.
Case study 3: Umbrella contractor remortgaging for a better rate
Profile: Healthcare contractor working via umbrella, remortgage to reduce monthly costs, 30% equity, good payment history.
Contract: £475/day, 4 days/week.
Income assessment example: £475 × 4 × 46 = £87,400.
Outcome: Clear contract, consistent work pattern and strong equity position improves lender appetite and product access.
Frequently Asked Questions
1: Is Halifax a good contractor mortgage lender?
Halifax can be a strong choice if your income is best evidenced through a current contract day rate, and your overall profile meets affordability, deposit, and credit checks. They’re often considered one of the more contractor-friendly high street options.
2: Can Halifax do a Day 1 contractor mortgage?
In many cases, yes — particularly where you’ve moved from PAYE into contracting in the same industry and can show continuity of work. Your contract strength, deposit, and credit profile will still matter.
3: How does Halifax calculate contractor income?
Contractor affordability is commonly assessed using a day-rate method:
Day rate × days per week × 46 weeks
Lenders may adjust or interpret this depending on contract details and the wider application.
4: Do I need two years of accounts for a Halifax contractor mortgage?
Not always. Where the contract is clear and your profile supports it, contract-based assessment can reduce reliance on long trading history — especially compared with lenders who insist on full accounts.
5: What documents do I need for a Halifax contractor mortgage?
Typically you’ll need your current contract, ID, bank statements, and supporting income evidence (which may vary based on limited company vs umbrella and the wider case). A broker will usually confirm the exact requirements before submission.
Want to know if Halifax will accept you as a contractor — and how much you could borrow?
Speak to Mortgage Knight for a contractor-focused assessment. We’ll review your day rate, contract length, working pattern and deposit, then confirm whether Halifax is the right fit or whether another lender is more likely to approve you on better terms.
