I’ve only just started contracting is the most common worry we hear, and it is usually less of a problem than people expect.
Consider someone with eleven years as an employed software engineer on £95,000 who takes a £650-a-day contract. On paper they have three weeks of contracting history. In reality they have eleven years in the profession and a contract worth around £149,500 a year. Several lenders will underwrite exactly that, sometimes from day one.
Wait until six or twelve months of contracting history is established, if timing allows.
Apply on a lower assessed income now and remortgage onto a fuller assessment later.
Use a lender that averages prior employed income with contract income.
Consider a joint application where the other applicant's income carries more of the affordability.
If you know you are moving to contracting, have the mortgage conversation before you resign. Options are widest while you still hold an employment contract and a signed contract to start. Applying two months after resigning, with no offer in place, is the hardest version of this case.
Even a short overlap between the two contracts can make a meaningful difference to which lenders will consider the application, so it’s worth timing the mortgage conversation to sit within that window rather than after it closes.
Situation: Eleven years employed in the same profession, then a first contract. Two lenders required twelve months’ history.
Approach: A day-one lender annualising the rate at £149,500 on the strength of prior employment.
Outcome: £510,000 at 85% LTV.
Situation: Same desk, same work, new payment structure — and an application that had already been declined.
Approach: Continuity of role evidenced with both contracts side by side.
Outcome: £320,000 agreed at 90% LTV.
Situation: A gap long enough to fail two lenders’ day-one criteria.
Approach: A lender allowing up to eight weeks between employment ending and the contract starting.
Outcome: £400,000 agreed.
Send us your signed contract and your employment history. We will tell you today whether a day-one lender will consider you.
Some lenders allow it where you have relevant prior employment in the same field and a signed contract. It is not universal, and criteria on the gap between roles vary.
Twelve months is the most common requirement, with some asking for two years and a minority accepting six months or day one.
It is harder, because the day-one argument rests on the relevance of your prior experience. Building six to twelve months of contracting history usually opens more options.
Notice periods and probation clauses are common in contracts and usually accepted, though a very short notice period can concern some underwriters.
Before, wherever possible. You have the widest choice of lenders while you still hold an employment contract and a signed contract to start.
