Coventry Building Society contractor mortgage lending criteria
Coventry Building Society is a newer entrant to the contractor mortgage market. The lender accepts all contract workers, including limited company and umbrella day rate contractors.
Coventry BS also has no restriction on employment or role type, accepting contractors from all industries.
Contracting history criteria
Contractors must have at least 12 months’ contracting history. They must also be able to show continuous employment over the last 12 months. Ideally, they should have six months remaining on their current contract.
If the contract has less than six months before it expires, the contractor must evidence 24 months of continuous employment in the same history. These two years don’t have to be all as a contractor, though.
What Coventry will insist on is that there are no more than four weeks between contracts. If you have gaps of more than four weeks, you may have to consider a different lender.
Income requirements
The least a contractor can earn to apply for a Coventry contractor mortgage is £50,000 per annum. Assuming the contractor works five days per week, the annualisation calculation for affordability purposes is:
- Day rate (£) × 5 (days per week) × 41 (weeks per year)
This is less than the 46- or 48-week calculation other contractor-friendly lenders offer.
However, Coventry doesn’t deduct umbrella-related expenses when assessing income. This can give umbrella contractors an advantage over lenders that deduct statutory and payroll service fees.
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Zero-hours contractors
Coventry does have a policy for certain professions in the zero-hour sector. To evidence income, underwriters need:
- copies of contracts covering the last 12 months’ continuous employment;
- the latest payslip;
- the last P60.
The zero-hours professions Coventry will lend to are:
- Armed Forces Reservists;
- care home workers;
- NHS bank nurses and locums;
- non-NHS bank nurses;
- retained/on-call firefighters;
- supermarket workers (including delivery drivers).
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Later-life lending and foreign nationals
There are two further restrictions worth noting:
Later-life lending: the maximum term of any Coventry mortgage is 40 years. The lender will lend to contractors up to the age of 70. It can, however, extend the mortgage term into retirement (75), depending on the borrower meeting certain criteria.
Foreign nationals: Coventry will lend to foreign national contractors. However, they must have either:
- Indefinite Leave To Remain (ILTR), or
- the right of abode to live and work in the UK, or
- settled/pre-settled status to live and work in the UK.
Coventry Building Society in a nutshell
Coventry Building Society’s policies may suit contractors with shorter contract histories who can demonstrate longer-term stability in their profession.
The lender covers almost all bases, and is a welcome addition to our range of contractor-friendly mortgage lenders.
Does Coventry BS sound like the right lender for you?
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