For most of the past decade, borrowing stopped at around four and a half times income. In 2026, it doesn’t.
Twenty lenders now operate at or above six times income for at least some borrowers. Barclays, NatWest, HSBC, Nationwide and Leeds Building Society all crossed that threshold within the past twelve months.
For contractors, this matters more than it does for employed applicants — and for a reason that has nothing to do with the multiples.
Contractors face two questions, not one. How much a lender will lend against income, and what the lender agrees to count as income in the first place.
When the ceiling was four and a half times, an argument about whether your assessed income is £70,000 or £140,000 was worth £315,000 of borrowing. At six times, the same argument is worth £420,000.
The stakes on getting the income assessment right have risen in direct proportion to the multiples.
What Changed in 2026
Stress testing eased
The FCA reminded lenders in March 2025 of the flexibility within its stress test rule. Several revisited their methodology, which increased loan sizes without any change to headline multiples.
The flow limit loosened
The Financial Policy Committee recommended in July 2025 that individual lenders be allowed to exceed the 15% high loan-to-income threshold on their own books. Interim measures are in force.
But it isn’t finished
A consultation on making the change permanent closed on 1 July 2026. No final policy statement has been published. Anyone telling you the limit has been abolished is running ahead of the facts.
Day rate assessment matters more than ever
A contractor assessed on annualised day rate rather than company accounts can present several times the income for the same work.
Case Studies
Case Study 1: Marcus – IT Contractor, Reading
Marcus earned £650 a day but drew a modest salary and dividends from his limited company. His accountant’s figures showed under £45,000.
Assessed on annualised contract income instead, the same contract supported a substantially larger loan — without any change to how he paid himself.
Case Study 2: Priya – Engineering Contractor, Derby
Priya approached her own bank directly and was assessed as generically self-employed, requiring two years of accounts.
A lender using contract-based underwriting reached a very different figure from the same paperwork.
Case Study 3: Tom – Contractor with 10% Deposit, Luton
Tom’s day rate comfortably cleared the income threshold for the highest multiple tier. His deposit did not.
The six-times products were capped at a lower loan-to-value, so a lender offering a more modest multiple at 90% produced his best workable outcome.
Why Outcomes Differ
- Whether the lender annualises your day rate or uses company accounts
- Your deposit, and which loan-to-value band it reaches
- The lender’s stress testing methodology
- Existing credit commitments
- Contracting history and unexpired contract term
FAQs
Some can, subject to income level, deposit and loan-to-value.
No — that figure is a regulatory measurement threshold, not a cap on borrowers.
Not inherently; the difference is usually in how income is assessed.
Not yet — interim measures are in force and a consultation closed on 1 July 2026.
Because they calculate your assessed income differently and stress test differently.
Unknown — lender appetite is commercial and can be withdrawn as quickly as it was extended.
Higher multiples are available in 2026, but they aren’t automatic and they aren’t the whole story.
For contractors, how your income is assessed usually matters more than which lender advertises the biggest number.
