How to Get a Mortgage as a Contractor

If you’re a contractor, it’s perfectly possible to get a mortgage to buy a home. As more and more lenders wake up to the reality that flexible work arrangements are here to stay, your employment status should be no more of a barrier than it is for full-time employees.

At Picnic, we believe mortgages should reflect modern life. That means showing contractors a clear path to homeownership, with no jargon, no judgment, and a lot more support. Here’s how it works—and how we’ll help you get it done. 

Can You Get a Mortgage as a Contractor?

Yes, of course. Contractors can and do get mortgages every day. Some lenders are still quite cautious, but there are plenty more who understand contract work is just another way to earn a solid income. 

Contractors come in many forms—from IT professionals and engineers to creatives and consultants. Whether you're working through your own limited company, an umbrella company, or as a sole trader, lots of mortgage lenders have adapted their acceptance criteria to suit your working style. 

Having a steady contract history and a consistent income will put you in a great position. That’s what lenders care about. You just need to show the right kind of proof, and we’re here to help you do that.

How Do Mortgage Lenders Define Contractors?

Lenders typically define contractors as individuals who work on fixed-term contracts, either through their own limited company, as sole traders, or under umbrella companies. Contractors aren’t permanent employees and don’t receive the same employee benefits, but they often earn higher day rates.

Some lenders also make distinctions between:

• Day-rate contractors (paid a daily rate)

• Fixed-term contractors (contract with a set end date)

• Freelancers or sole traders (self-employed without contracts)

What Proof of Income Do You Need?

Different ways of working mean different ways of proving your income and how this is viewed by mortgage lenders. Here’s how it usually goes:

• Limited company contractors: Lenders often look at your salary and dividends. Some will take your day rate and annualise it (multiply by the days you work in a year).

• Umbrella company contractors: You’re technically employed by the umbrella company, so lenders often treat you like a standard employee.

• Sole traders/freelancers: Lenders will want to see your tax returns (typically over the past 2-3 years).

What mortgage lenders really want is consistency. The more stable your earnings look, the better.

How Do Mortgage Lenders Assess Your Application?

Lenders don’t just look at your income, but everything around it, including: 

• Your current contract and how long is left on it

• Your contract history and whether there are any gaps in employment

• Your day rate or average earnings

• Your credit score and other financial commitments

• How long you’ve been contracting (typically, 12+ months is ideal)

Some may also want to know what’s coming next—do you have another contract lined up?

How Much Can You Borrow?

For contractors, how much you can borrow depends on your income, your contract details, and the lender’s criteria. Most lenders will multiply your day rate by the number of days you work per week, then annualise it (multiply by 46–48 weeks). 

For example, if you earn £400 a day and work 5 days a week, a lender might calculate your annual income as £400 x 5 x 48 = £96,000. They’ll then apply an income multiple—usually 4 to 5 times your income—to determine how much you could borrow.

Contractor Mortgage Criteria

To be considered for a mortgage as a contractor, most lenders will want to see:

• A current contract with at least 3–6 months remaining

• A contracting history of 12–24 months

• Clean credit history

• Proof of consistent income (e.g. payslips, tax returns, or invoices)

• A reasonable deposit (typically 5–15%, depending on circumstances)

New to contracting? It’s not game over. Some lenders are more flexible, especially if you were in the same line of work before going solo. A good, experienced mortgage broker (like us!) can help match you with the right one.

Which Mortgage Lenders Accept Contractors?

More than you probably realise. Several mortgage lenders, including high-street banks and specialist lenders, have adopted contractor-friendly criteria. The key is finding those lenders that have a clearer understanding of the various nuances of life as a contractor. 

This is where using a mortgage broker can make all the difference, saving you a lot of time and effort by identifying those lenders who will look more favourably on your application.

Do Contractors Need a Bigger Deposit?

No, not necessarily and not just because you’re a contractor. But the more you have, the more it can help your application. Most lenders require a minimum deposit of 5–15%, depending on your credit history and overall financial profile. However, putting down a larger deposit can: 

• Increase your chances of approval

• Unlock better mortgage rates

• Reduce your monthly repayments

How Can You Boost Your Chances?

There are a few key steps you can take if you're a contractor to help your case for getting a mortgage:

• Keep detailed and up-to-date financial records. 

• Avoid long gaps between contracts if possible. 

• Maintain a strong credit score and download your Credit Report* to check that all the information is accurate and up to date. 

• Make sure all your regular outgoings are paid on time. 

• Minimise debts and avoid new credit applications before applying. 

• Prepare a professional CV showing your contracting history.

• Save as much for a deposit as you can. 

• Work with a mortgage broker who understands contractor mortgages.

The more organised and transparent you are with your documents and finances, the more confident lenders will be.

*When you click through to our affiliate links, we may earn a small commission. We only recommend sites we trust and believe in. 

What Else Could Affect Your Chances?

Other factors that may impact your mortgage approval include:

• Poor credit history or missed payments

• Large existing debts or other financial commitments

• Frequent job or contract changes

• Irregular income patterns

• Property type (some properties are seen as a higher risk than others)
  

Don’t worry too much if any of the above applies to you - it doesn’t necessarily mean you won’t get the mortgage you need. It just means you might need a bit more help finding the right mortgage lender. That’s exactly what we’re here for.