Which Bank Offers Contractor Mortgages?

Which banks really offer contractor mortgages? Discover how lenders assess contractors, the banks most open to day-rate income, minimum thresholds, contract rules, and how to improve your approval chances.

Getting a mortgage as a contractor can feel like an uphill battle. You know you’re earning well on your day rate, but when you speak to a high-street bank, you’re often told you need two or three years of accounts before they’ll even look at you.

This mismatch between contractor income and traditional lending criteria means many contractors waste time applying to the wrong lenders, only to face rejection. The truth is: not all banks are contractor-friendly, but a growing number do have specific policies designed for contractors.

In this article, we’ll explore which banks genuinely lend to contractors, how they calculate your income, what minimums and rules they apply, and which types of contractors each lender suits best.

How Banks Assess Contractors

When you’re employed, affordability is simple: lenders look at your payslips and annual salary. Contractors are different. Most contractor-friendly banks use a formula based on your contract rate. For example:

Day rate × 5 days × 46 weeks
Day rate × 5 days × 48 weeks
Weekly contract income × 52 weeks

This creates an annualised income figure they can use for affordability. Beyond this, lenders may also require:

A minimum day rate or annual income
A set amount of time left on your current contract (often 4–12 weeks)
Evidence of history in your field or contracting role
Limits on contract gaps (e.g. no more than 6–12 weeks in a year)
A decision on whether umbrella, CIS or limited company income is treated as employed or self-employed

These differences explain why some contractors are approved quickly while others, with the same income, are declined.

Which Banks Offer Contractor Mortgages?

Here’s an up-to-date look at banks and building societies that genuinely lend to contractors, along with what makes each one different.

Halifax

Halifax is widely seen as the go-to bank for contractors starting out. They’ll often accept you from day one of your first contract. Income is usually calculated as day rate × 5 × 46 weeks. For non-IT contractors, brokers report a minimum of around £326 per day (~£75,000 pa). Halifax normally wants at least a month remaining on your contract, or evidence of renewal.

Best for: IT contractors, day-1 applicants, and those without years of accounts.

Nationwide

Nationwide uses day rate × 52 weeks when assessing income. They’re flexible on gaps (up to 12 weeks in a year).

Best for: Contractors with some history or those with small gaps between contracts.

NatWest

NatWest has a high-income contractor policy requiring £75,000+ per year. They calculate affordability as weekly contract income × 46 weeks.

Best for: Higher-earning contractors with long contracts.

Virgin Money

Accepts day-rate contractors earning £50,000+ per year, usually with 1 year of contracting history.

Best for: Mid- to high-earning contractors.

Accord (Yorkshire Building Society)

Requires £300/day or £50,000 pa. Accepts up to 8 weeks of gaps in a year.

Best for: Contractors with modest gaps in work.

Bank of Ireland

Basing lending on 80% of gross contract income, with at least £50,000 annual income.

Best for: Established contractors with consistent history.

Metro Bank

Calculates affordability using day rate × 46 weeks and considers multiple contracts.

Best for: Contractors juggling several projects.

Skipton Building Society

Doesn’t decline outright for gaps; instead pro-rates income.

Best for: Contractors with irregular workloads or locums.

Kensington

Uses weekly rate × 48 weeks. Accepts applicants with past credit issues.

Best for: Contractors with less-than-perfect credit.

Pepper Money

Works with contractors with 12+ months history, taking the lower of your 12-month average or current contract.

Best for: Contractors with fluctuating income.

HSBC

Accepts fixed-term PAYE contractors with stable employment, but usually requires 2 years of accounts for others.

Best for: Fixed-term PAYE contractors.

Barclays

Now accepts umbrella and limited company contractors. Bases affordability on last two contracts × 46 weeks.

Best for: Umbrella contractors or those with a strong contract history.

Other Contractor-Friendly Lenders

Leeds Building Society – up to 85% LTV.
Kent Reliance – minimum ~£275/day.
Bluestone – accepts gaps or limited history, but higher rates.

Case Studies

Case Study 1 – IT Contractor on Day 1

James started his first IT contract at £450/day. Halifax approved him under their day-1 policy.

Case Study 2 – Marketing Consultant with Gaps

Sophie had 8 weeks out between contracts. Nationwide declined, but Accord approved.

Case Study 3 – Engineer with Past Credit Issues

Michael had a CCJ. High-street banks refused, but Kensington approved.

Frequently Asked Questions

Q1. How do contractor mortgage brokers differ from standard brokers?

Ans: Specialist contractor brokers focus specifically on the contractor market and maintain relationships with lenders who regularly assess contractor applications. We understand the unique documentation requirements and assessment methods used for contractor income, whereas general brokers may have limited experience in this area.

Q2. Can you guarantee my mortgage will be approved?

Ans: No reputable broker can guarantee mortgage approval, as the final decision always rests with the lender. What we can provide is professional guidance, access to appropriate lenders, and support throughout the process to give you the best chance of a successful application.

Q3. How long does the contractor mortgage process typically take?

Ans: Timeframes vary depending on the lender, complexity of your situation, and external factors like legal work and surveys. Most applications take 4-8 weeks from submission to completion, though this can vary. We provide realistic expectations based on your chosen lender’s typical timeframes.

Q4. Do specialist contractor lenders charge higher rates?

Ans: Not necessarily. Many specialist contractor lenders offer competitive rates, and some contractors find better deals through specialist channels than through mainstream banks. Rates depend on your individual circumstances and the lender’s assessment of your application.

Q5. What documentation do I need as a contractor?

Ans: Documentation requirements vary by lender, but typically include recent contracts, bank statements, proof of address, and identification. Some lenders may also request business accounts, CV, or other supporting information. We guide you through each lender’s specific requirements.

Q6. Can you help if I've been rejected elsewhere?

Ans: Yes, we can review your situation and potentially identify alternative lenders who may take a different view. However, it’s important to understand why the previous application was unsuccessful and whether your circumstances need to change before reapplying.

Professional Contractor Mortgage Guidance

If you’re a contractor looking for professional mortgage guidance, we’re here to help. Our specialist knowledge and lender relationships enable us to provide expert advice tailored to your situation.

Schedule your consultation today. We’ll discuss your circumstances, explain your options, and provide honest advice about the best approach for your contractor mortgage application.