Metro Bank contractor mortgage lending criteria
Metro Bank offers a personalised approach when assessing contractor mortgage applications. The lender covers many payment structures, and overhauled its contractor-friendly policies massively in 2024 to great effect.
Contractor policy key features and stipulations
Metro has no restriction on contract income (unless it’s in a foreign currency). It also welcomes contractors from any industry sector.
The lender also considers day-one contractors (first day, first contract). The contractor must, however, have 24 months’ work history in the same industry.
The applicant’s current contract must cover at least a three-month period. If the contract is open-ended, the contractor must have been working it for at least three months, and the contract must have at least four weeks left to run.
If the current contract has fewer than four weeks to run, Metro may require evidence that the agency/client has extended the contract, or
the contractor applicant has secured a new contract.
As for gaps between contracts, Metro’s underwriters allow only six weeks’ over the last 12 months.
Income criteria
Unless the contract restricts working to fewer hours/days, Metro’s affordability assessment calculates annualised income as:
- Day rate (£) x 5 (days) x 46 (weeks)
To corroborate your income, the underwriters will ask for:
- A copy of the current contract
- Evidence of 12 months’ work history in the same industry
- Bank statements showing receipt of contract income.
The lender can also accept up to four different incomes on a single mortgage application. This applies whether buyers are purchasing collectively or using Metro’s Joint Borrower/Sole Proprietor option. These options are ideal for families or groups pooling resources.
Metro also lends up to age 80. This makes the lender particularly useful for:
- First-time buyers looking to maximise affordability
- Older borrowers looking to reduce their monthly repayments
Umbrella company workers
Aldermore only considers gross income for affordability based on income received by the contractor from the umbrella company. And then, only once ‘umbrella expenses’ have been removed.
The annualised calculation uses a contractor’s average weekly amount over the latest month (before tax and NIC), multiplied by 46 weeks.
Aldermore will include any umbrella contractor’s holiday pay and pension salary sacrifice in the gross income calculation.
To evidence income for umbrella contractors, Aldermore asks for:
- Your latest full contract
- Previous contracts for the past 12 months (if applicable)
- Latest month’s (4 weekly) payslips, including the YTD figure covering the last 3 months, or the last 3 months’ payslips
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Umbrella contractors
Metro also welcomes contractors using Umbrella companies to handle their payroll. The lender may request payslips where the payment on the bank statement differs from the contract.
Post-tax and National Insurance deductions and payroll service fees often account for these differences. Submitting a copy of the contract and the most recent payslips will put the underwriters’ minds at rest
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Talk to the contractor mortgage experts
As the leading mortgage broker for contractors and the flexible labour workforce, you’ll be in safe hands with Freelancer Financials.
Freelancer Financials is an independent broker with access to every mortgage from every lender, meaning we can offer truly unbiased advice and find you the best deal for your unique circumstances.
Established more than 20 years ago, we have a proven track record of arranging over 30,000 mortgages for contractors, umbrella company workers, CIS subcontractors and the self-employed.
Our specialist broking team will support you throughout your mortgage journey, and we have nearly 1000 5-star reviews from clients to prove it. Whatever your mortgage needs, it’s time to talk to the experts.
Metro Bank in a nutshell
Metro Bank’s recent policy changes have made the lender much more contractor-friendly.
Later-life lending, consideration of multiple incomes and no restrictions on industry or income have made Metro a much more viable option for contractors.
Speak to our expert broking team today to see if an Metro Bank mortgage is right for you.
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