Nationwide Building Society contractor mortgage lending criteria
Contractors have long favoured the UK’s biggest building society, Nationwide. Its competitive rates and genuine understanding of contractors stand out as among the best in the market.
The lender offers a mortgage range that works for both limited company and umbrella contractors, making Nationwide a versatile option.
Contractor types Nationwide BS accepts
Nationwide accepts contractors of any type, with no minimum income requirements. Limited company, fixed-term, umbrella, foreign national and CIS contractors can apply for a mortgage.
Payment structure isn’t a problem, either. Nationwide accepts contractors inside and outside IR35 who operate through an umbrella company or their own limited company.
One type of contractor Nationwide won’t accept is those whose clients or agencies pay them in foreign currency.
Contract requirements
Contractors must have at least 12 months’ experience as a contractor. Plus, gaps between contracts in the last 12 months cannot exceed 12 weeks. That is a very generous concession compared to other contractor-friendly lenders.
If the applicant’s current contract has less than four weeks to run, Nationwide may require evidence of an extension or renewal. That said, the lender will consider applicants whose client or agency is likely to renew their current contract, providing that:
- the contract relates to a specific ongoing project;
- the contractor has spent enough time with their current employer and their contract has been renewed before;
- the contractor’s prospects of finding alternative employment in similar work on a similar salary are sound.
Day-one contractors are also welcome, but anyone brand new to contracting must have a minimum contract length of two years.
Underwriters need a copy of the current contract to evidence income. They will then calculate annualised income with this formula:
- Day rate (£) x 5 (days) x 52 (weeks) unless the contract specifies that the contractor works fewer hours.
Umbrella payroll contractor criteria
A big plus for umbrella contractors is that Nationwide doesn’t work off payslips or factor in deductions. Instead, underwriters base their calculations on gross daily rate, which can boost what contractors can afford to borrow.
The employment contract between the applicant and umbrella company is a fixed-term umbrella contractor’s proof of income. Where a contract doesn’t show the income, Nationwide requests a letter from the umbrella company confirming the applicant’s last 12 months’ earnings. The lender will also ask for the latest bank statement to confirm earnings.
Nationwide assesses CIS subcontractors who use umbrella payrolls as it would fixed-term contractors.
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Foreign national contractors
Where an applicant doesn’t have indefinite leave to remain, Nationwide limits mortgages to 75% LTV.
Applicants’ visas must have at least one year remaining at time of application. This applies even if:
- the applicant has a points-based visa, or
- the joint borrower is a UK national.
Other standout policy features
First-time buyers can benefit from Nationwide’s ‘Helping Hand’ policy. This offers an impressive income multiple of up to 5.5 x salary on a five-year fixed rate. This can be a welcome boost for contractors trying to get on the property ladder.
The building society will also lend up to age 75. This is useful for:
- first-time buyers looking to maximise affordability, and
- older borrowers aiming to reduce monthly mortgage repayments.
Find out how much you can borrow
Nationwide in a nutshell
Nationwide Building Society offers contractors a combination of:
- high-income multiples for first-time buyers;
- contractor-friendly policies;
- competitive interest rates.
These make the lender a viable option, especially for those just starting out on the property ladder or working with an umbrella setup.
Contact our experienced brokers today to take advantage of Nationwide’s wide-ranging contractor mortgage offering.
Does Nationwide sound like the right lender for you?
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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.
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