How Much Can a Contractor Borrow for a Mortgage?

How Much Can a Contractor Borrow for a Mortgage?

Blog Article

It Depends on Your Contract Rate
One of the biggest questions contractors ask is: How much can I borrow? The good news is that if you’re a day-rate contractor, many lenders calculate your mortgage affordability based on your contract rate, not just salary or dividends.

The typical formula lenders use is:

Day rate × 5 days × 46 to 48 weeks = Gross annual income

For example, if your day rate is £400:

£400 × 5 × 46 = £92,000 annual income

This figure is then used to determine your borrowing capacity, which could be up to 4.5 to 5 times your annual income, depending on the lender and your credit profile.

Factors That Affect Borrowing Amount
Several factors influence how much you can borrow, including:

Length of your current contract

History of contract renewals

Gaps between contracts

Credit score

Existing debts and expenses

The more stable your contract history and the better your credit, the higher your borrowing potential.

What If You Have Less Contracting Experience?
If you're new to contracting, don’t worry. Some lenders are happy to work with applicants who have as little as 3–6 months of contracting experience, especially if you have a strong work history in the same industry.

Why Use a Contractor Mortgage Broker?
A specialist broker like Contractor Mortgage Solutions can help you:

Calculate your borrowing capacity accurately

Match you with contractor-friendly lenders

Secure the best rates based on your unique situation

We understand the contractor lifestyle and how to present your income clearly to lenders.

Start Your Mortgage Journey Today
Knowing what you can borrow is the first step toward buying your dream home. Let Contractor Mortgage Solutions assess your income and connect you with the right lenders. Contact us today for a personalised consultation.