Mortgage360 Logo

Call Us

0330 122 5022

Email Us

hello@mortgage360.co.uk

CIS & Contractor Mortgage Broker

Ready to talk?

CTA Booking Form

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Mortgage360 are here to help you make the right choice.

Here at Mortgage360 we pride ourselves on offering tailored advice, coupled with great service. We are mortgage experts, so you can rest assured that you are in safe hands when searching for your new mortgage, whatever your situation may be.

Key Benefits

We are committed to guiding you through one of life's most significant financial decisions.

When it comes to securing the right mortgage, our expert team is here to ensure that you make informed choices tailored to your unique needs.

We understand the Construction Industry Scheme – we’ll help you navigate the process.
We’ll work with you to complete your application.
We specialise in this field – we’ll help you secure a competitive deal.

In the UK, a contractor is defined as anyone providing work for someone else under the terms of a contract. Contractors work either on a fixed term or as and when required, then invoice for their time. Contractors sometimes pay their own taxes and National Insurance. They are not usually entitled to holiday pay or sick pay.

If you are self-employed in the building or construction trade, then you will be familiar with the Construction Industry Scheme (CIS). This government scheme requires contractors to deduct money from a subcontractor’s payments and pass this to HM Revenue and Customs (HMRC). These deductions count as advance payments towards the subcontractor’s tax and National Insurance liability.

This is different from other self-employed individuals outside the construction industry, who may receive their payments with no tax deducted. When applying for a mortgage, self-employed individuals can find that their tax situation makes their declared income lower than their turnover, which in turn can impact how much a lender is prepared to lend.

In comparison, those registered with the CIS, are able to present their earnings as a pre-tax gross income, rather than a final post-tax profit.

Is it hard to get a mortgage as a contractor?

Not necessarily, although this will depend on the nature and reliability of your work, any notable gaps in your employment and your credit history. Being aware of how to prepare your application will help, and a specialist contractor mortgage broker will help you to access contractor-friendly lenders in the mortgage market.

One area that can prove tricky is that different mortgage lenders will have different lending criteria for contractors, which is another reason why you will find it useful to speak to a mortgage advisor who specialises in this field and understands what individual lenders require and prefer.

You will need to be able to demonstrate at least 12 months’ working history, alongside your earnings as a contractor over this period. If you have only recently become a contractor, it may be more difficult – although not impossible – to secure a contractor mortgage.

Specialist lenders may prove more contractor-friendly than high-street lenders. Here, a specialist mortgage advisor will help with your contractor mortgage application process, securing a competitive mortgage deal.

How long do I need on my contract?

If you have been a contractor for twelve months or more, and you can demonstrate current/upcoming work as a contractor, you’ll have more choices. There are only a limited number of lenders who will consider shorter contractor records of less than a year.

For those who have been contractors for some time, lenders will differ in how they assess your income. Some will average your income out over a number of years, while others will look at your current income.

Benefits of working with a Contractor Mortgage Broker

A contractor mortgage broker will have experience in managing mortgage applications for contractors, and understand how they can prepare their applications to optimise success. They will have knowledge of and access to specialist mortgage products with more niche lenders and genuine contractor-friendly mortgage lenders.

In addition, using a specialist mortgage broker will help protect your credit score – declined mortgage applications can impact this significantly.

At Mortgage360, we’re completely flexible – we’re happy to talk with you at a time to suit your working patterns and home life.

Types of Mortgages for Contractors

Just like most other mortgages, contractors can access repayment mortgages and interest-only mortgages. There are a couple of specifics for contractors.

Day Rate Mortgages

With a day-rate mortgage, a mortgage lender will take your day rate and multiply this to work out an estimated annual income. It won’t be multiplied by 365 – typically, lenders will take into consideration how many days a week you work and typically multiply this by 46 weeks to allow for holidays.

Fixed-Term Contracts

If you’re on one or more fixed-term contracts, then you can still secure a mortgage deal. Contractor-friendly mortgage lenders will look at the term left on your contract, but also at your employment history and your contracting history, as well as your potential for future employment.

Self-Employed Individuals

Similar considerations apply to the self-employed. Issues such as irregularity of pay and the need to provide more paperwork can be challenging when approaching self-employed mortgage lenders. Take a look at Mortgage360’s services for the self-employed.

Preparing to Apply for a Mortgage as a Contractor

There are things you can do to increase your appeal to a potential mortgage lender. If you can demonstrate a consistent pattern of earnings and also the ability to manage your money responsibly, you will be in a better position in terms of mortgage affordability.

Make sure you have all the documentation you need in place and ready to go. Your mortgage broker will advise you on exactly what’s needed – requirements may differ slightly from lender to lender.

Gathering Documents and Information Needed for the Application Process

Standard residential mortgages for employed people usually only require payslips and personal bank statements as proof of income, but for a contractor mortgage loan, you will be asked to supply additional documents.

In general, these will be;

  • Business bank statements
  • Your invoices over a period of time
  • Copies of current contracts and all others covering the last 2 years
  • Your qualifications and work history (via an up-to-date CV)
  • SA302 Tax Calculations and corresponding Tax Year Overviews (available via HMRC’s online services, once you have filed your Self-Assessment form). Or accessed via your Accountant
  • Latest 2 years Limited Company accounts (if you are a Limited Company setup)

Understanding Your Current Contract Terms and Conditions

Make sure you fully understand your current contract terms and conditions before you begin your application, and also have a true picture of your current annual income potential to access the best contractor mortgage at the best interest rate to suit your individual needs.

How much can I borrow?

That’s a difficult one to estimate without understanding your personal financial circumstances. Lenders have their own lending criteria for determining this. For employed individuals, most lenders use a multiple of annual income, anything from 4.25 to 5.50 and beyond, dependent upon the applicant and their overall affordability.

For a contractor, they’re likely to look at your earnings (historical and current). If you have a strong and consistent record here, your application is more likely to be viewed favourably and secure better interest rates.

How much of a deposit do I need for a contractor mortgage?

There is no reason for you to need a larger deposit than any employed person seeking a mortgage. If you meet the lender’s other criteria, then a 5-10% deposit should be adequate.

How can I strengthen my mortgage application as a contractor?

There are steps you can take to increase your appeal to mortgage lenders.

Do some work on your credit score. Paying bills on time and even taking out a credit card and paying it off in full each month can enhance your score.

Work consistently. If you’re thinking of applying for a mortgage in the near future, avoid any breaks in your working patterns, where avoidable.

Make sure you have all the right documentation for your application. Work with your mortgage broker to present a full and accurate picture.

How can Mortgage360 help with my mortgage application?

At Mortgage360, we’ll help you to put together a compelling case for your contractor mortgage. We’ll look at all the available deals with contractor-friendly lenders, advise on mortgage affordability, complete your mortgage application, and move things forward to make things quick and easy for you. Just give us a call.

CIS & Contractor Mortgage Broker

Here at Mortgage360, we can provide expert advice on all your mortgage and insurance needs.

Whether you’re ready to get started on your journey now, or you’d just like a no obligation consultation, we’d love to hear from you…

Contact Form - Home Page

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Reviews

See what our clients are saying....

google
Pippa Lister
April 11, 2024

Gavin at Mortgage 360 was superb throughout. He responded quickly to any questions or queries we had, worked round our busy work life with evening zoom meetings and kept us regularly updated. He made the whole process straightforward and clear. Thank you Gavin

google
M Wick
April 10, 2024

Matt at Mortgage360 is an amazing broker. He was always on hand to lend support and offer calm and well explained help. As a first time buyer, his help was always appreciated and the service which they offer is top notch. I could not recommend mortgage360 highly enough

google
Stormin' F
March 13, 2024

I cannot recommend Gavin more highly for his invaluable and trustworthy expert support in navigating through the mortgage process. I have used Gavin’s services several times over the years and he had always gone above and beyond the call - thanks Gavin.

google
Ash Gibbs
March 9, 2024

Gavin has helped us to no end. Brilliant service and he was willing to go the extra mile to ensure we got the very best deal.

google
Ross McWilliams
February 22, 2024

Our experience using Mortgage360 has been absolutely brilliant. Matt has been there for us and supported with our mortgage application every step of the way, with an excellent outcome. Thank you for everything - you’re a star!

google
Jonathan Bush
February 16, 2024

Gavin arranged my Mortgage for my first home and i couldn't have been happier with the service received, explained things in great detail and communicated efficiently. I would recommend Mortgage360 to anyone in need of mortgage advice and I will be definitely using them in the future.

google
Nigel Porritt
February 15, 2024

I contacted Mortgage360 I was looking for help with the purchase of my first home. They were great at explaining all of my options, taking time to ensure I understood everything fully and constantly provided updates throughout the whole process. I couldn’t have asked for a better service and would highly recommend them. Thanks Gavin and Matt!

google
Richard Espin-Bradley
February 9, 2024

Matt Illingworth was superb! Readily available on the phone, or always called back within a short space of time. Made plenty of time to discuss our needs and never tried to hurry us into making decisions. His advice was clear and helpful.

google
James Hall
February 9, 2024

Gavin at mortgage360 has been outstanding, gives incredibly in depth information about all things mortgage related. Has helped us secure a mortgage at a better rate than we could have got ourselves, saving us lots of money. He made the whole process as stress free as possible and provided all templates for files we needed to send and always got back to our queries within a couple of hours at maximum. If I could give more than 5 stars I would. Keep it up Gavin!

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
MOST BUY-TO-LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, however we estimate this to be between £200 and £600.