How much can contractors borrow?

We can give you a fairly accurate estimate of how much you’ll be able to borrow. Using terms negotiated with various lenders, we’ll use your annualised contract income as the basis of our calculation..

Depending upon your unique circumstances, the amount offered will be anything between 4.50-5.00 times your gross annual earnings.

The quickest and simplest way to get an estimate is to use our Contractor Mortgage Calculator.

For a more accurate figure, our advisers can take your details, align them with the best offers from contractor-friendly mortgage lenders who cater specifically for your circumstances and then get back to you with a firm offer.

Lenders use a straight-forward calculation to work out how much you can potentially borrow. There’s a bit of multiplying to do, but just remember that each “multiply by” means a greater amount at the end.

Firstly, multiply your current contract day-rate by the number of days you’re contracted to work per week. Then, multiply the answer by 48, being the number of weeks in a year lenders use to work out your affordability.

You can generally secure a mortgage of around four-and-a-half times this total. The final offer may be slightly more or less depending upon which lender you choose.

So, for example, a contractor earning £500 per day could potentially borrow over half a million pounds to purchase their home. £500 x 5 (days) x 48 (weeks) by 4.5 (affordability factor) = £540,000.

As is clear from the example, contract-based mortgage underwriting only uses the elements that matter.

That means we can save you the time and hassle of trudging the High Street. And then having to provide a minimum of two-three years’ worth of accounts to prove your earnings. And then being turned down because your ‘income’ is not enough.


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