One of the biggest misconceptions I hear is:
"I'm a contractor now... no bank is going to lend to me."
That simply isn't true. As a mortgage broker, I've noticed more and more people leaving full-time employment to become contractors.
The appeal is obvious:
✔️ Greater flexibility
✔️ Higher earning potential
✔️ More control over your career
But many people make the move without considering how it could affect their ability to get a mortgage.
The reality is that being a contractor doesn't prevent you from getting a mortgage.
What matters is how lenders assess your income. One of the key considerations is whether you're inside or outside IR35.
Outside IR35
Many contractor-friendly lenders will often assess affordability using your day rate, annualising your income rather than relying solely on company accounts. This can work very well if you have a consistent contract history.
Inside IR35
Lenders may place greater emphasis on your payslips, umbrella company income or employment history because you're taxed more like an employee. There are still plenty of options available, but the criteria can differ.
My top three tips for contractors
1. Speak to a mortgage broker before becoming a contractor.
If you're planning to buy a home within the next year or two, getting advice before making the switch could save you time, stress and even increase your borrowing options.
2. Keep excellent records.
Contracts, payslips, invoices, bank statements and evidence of previous employment all help lenders understand your financial position.
3. Don't assume every lender has the same criteria.
Some lenders specialise in contractor mortgages, while others have much stricter requirements. Knowing where to apply is often the difference between an approval and a decline.
I've helped contractors who had only recently started their first contract, while others needed a longer track record before the right lender was comfortable lending.
Every case is different.
The key message is this...
Don't let assumptions stop you from exploring your options.
If you're thinking about moving into contracting or you're already a contractor planning to buy a home, it's worth getting advice early. A little planning can make a significant difference.
Are you inside or outside IR35? Has it affected your mortgage journey? I'd love to hear your experience in the comments.
I'm a mortgage broker looking for referrals. Quality over Quantity
I provide fast, COMPLIANT, affordable mortgage solutions across residential, buy-to-let, and…
