How Much Can a Contractor Borrow for a Mortgage?

How Much Can a Contractor Borrow for a Mortgage?

Blog Article

One of the most common questions contractors ask is: “How much can I borrow?” The answer depends on several factors — but with the right lender, your borrowing potential could be higher than you think.

Traditional vs Contractor-Friendly Lenders
High street banks typically assess income using payslips or annual accounts. For contractors, this often results in underestimating true earning potential. They may also ask for two to three years of accounts, which can delay or restrict your application.

Contractor-friendly lenders take a different approach. They assess your income based on your day rate and contract length, allowing you to borrow more based on your actual earnings — not outdated criteria.

A Typical Contractor Mortgage Calculation
Here’s a general formula used by many contractor-friendly lenders:

Day rate x number of working days per week x 48 weeks = annualised income

For example, if you earn £500 per day and work 5 days a week:

£500 x 5 x 48 = £120,000 annualised income.

Lenders may then multiply this by 4.5 to 5.5 times your income, depending on your credit score, deposit size, and other financial commitments.

Factors That Affect Borrowing Power
Your current contract and its duration

Credit score and history

Deposit size

Existing debts or financial obligations

Stability of work history

Let Us Help You Maximise Your Borrowing
At Contractor Mortgage Solutions, we’ll assess your situation and match you with lenders who understand your unique income setup. We’ll calculate your borrowing power and guide you through the process from start to finish.

Contact us today to find out exactly how much you could borrow — and get one step closer to your new home.