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Metro Bank Contractor Mortgage

Securing a mortgage as a contractor might be tough, but Metro Bank makes the process easier by offering a personalised approach to contractors. Whether you’re working on a day rate or an hourly rate basis, through a limited company or a payroll umbrella, Metro Bank is open to considering your mortgage application.

Here’s everything you need to know about getting a contractor mortgage with Metro Bank, including their unique policies, requirements, and how you can maximise your chances of approval.

Metro Bank Contractor Mortgage

Why Choose Metro Bank for a Contractor Mortgage?

One of the standout features of Metro Bank’s mortgage offering is their willingness to lend up to 5.5 times your income, a generous limit that is particularly beneficial for contractors. Whether you’re a first-time buyer or looking to remortgage, this higher borrowing multiple can significantly boost your borrowing power.

Moreover, Metro Bank also supports mortgage lending up to the age of 80, making it an ideal choice for contractors seeking long-term borrowing options.

Metro Bank’s Contractor Mortgage Policy

Metro Bank has a specific mortgage policy for contractors, making them one of the more flexible options for independent workers. Below are the key aspects of their policy:

Contract Value and Profession

Metro Bank does not impose a minimum contract value. This makes them accessible to a wide range of contractors, whether you’re working in IT, engineering, creative industries, or other sectors. Regardless of your profession, Metro Bank will consider your application on its individual merits.

Employment History

To qualify, Metro Bank prefers contractors to have at least 12 months of continuous work history. While brief breaks or holidays are acceptable, extended gaps between contracts might lead to a need to explore other contractor-friendly lenders.

Contract Length

Metro Bank requires contractors to have a minimum contract length of six months. Shorter three-month contracts are not eligible, but this policy ensures a more stable financial footing from the lender’s perspective.

Loan-to-Value (LTV)

Metro Bank offers lending up to 85% LTV, meaning you would need a minimum deposit of 15% of the property’s value. This LTV ratio is competitive, allowing contractors to access high-quality mortgage products without having to provide an excessively large deposit.

How Metro Bank Calculates Contractor Income

A crucial part of the mortgage approval process is calculating your gross contract value. Metro Bank uses a straightforward calculation that considers your day or hourly rate and applies a set formula to determine your annual earnings for mortgage purposes.

Daily Rate Calculation

Daily Rate x 5 (working days) x 46 (weeks) = Gross Contract Value

Example:
£150 daily rate x 5 days x 46 weeks = £34,500 gross contract value.

Hourly Rate Calculation

Hourly Rate x (stipulated or default of 37.5 hours) x 46 weeks = Gross Contract Value

Example:
£25 hourly rate x 37.5 hours x 46 weeks = £43,125 gross contract value.

Importantly, Metro Bank does not use your previous year's average daily rate for calculations, making the process simpler and more predictable.

Application Requirements for Metro Bank Contractor Mortgages

Ensuring you have the correct documentation ready is vital to a smooth mortgage process. Metro Bank requires several key documents, which we can assist you in gathering:

Documents Required

  • Proof of ID (e.g., Passport, DVLA Licence)
  • Proof of Address (e.g., Utility Bill, Council Tax Bill)
  • Current Contract (with Terms and Conditions, signed and dated)
  • Previous Contract (to demonstrate 12 months of contracting history)
  • Latest Mortgage Statement or evidence of rent payments (for remortgaging or demonstrating good financial conduct)
  • Metro Bank Signed Declaration and “Getting to Know You” form
  • Up-to-date CV (to show a solid work history)
  • Personal and Business Bank Statements (from the last three months)
  • Proof of Deposit or a Gifted Deposit Letter (a template can be provided if needed)

Having all these documents in place will enable us to efficiently submit your application to Metro Bank’s underwriters, increasing the likelihood of a swift and positive decision.

How We Can Help You

Our team at Mortgage Knight is here to guide you every step of the way through your contractor mortgage journey. We specialise in contractor mortgages and have a wealth of experience in dealing with lenders like Metro Bank. Whether you need help compiling your documents, understanding your mortgage options, or simply seeking advice, we’re here to assist – free of charge.

We believe in providing friendly, helpful advice to ensure that your mortgage process is as smooth and stress-free as possible.