As an IT contractor, you may be wondering whether getting a mortgage is possible, given your income structure and the lack of traditional payslips. Fortunately, there are many mortgage options available to IT contractors that are tailored to your unique financial situation.
At Just Mortgage Brokers, we specialise in helping IT contractors secure the mortgage they need. Let’s break down the process and clear up any concerns you may have.
An IT Contractor mortgage is a specialised product designed for those working on a freelance or contract basis in IT. These mortgages cater to the distinctions of contracting, allowing lenders to understand that while your income may appear unpredictable, it is often steady and reliable due to long-term contracts, retainer agreements, or established relationships with clients.
If you’re an IT contractor, you’re more likely to apply for a mortgage within this specialised range of products, which are tailored to your unique financial situation. The lenders who offer these mortgages understand that income earned through contracting can still provide a stable foundation for purchasing or remortgaging.
As an IT contractor, your income may vary depending on the length of your contracts or the clients you work with. However, many lenders understand that your income is not as unpredictable as it may seem. They will consider the nature of your work, the duration of your contracts, and your relationships with clients.
Specialist lenders are now more flexible in evaluating contractors’ incomes. Whether you’re on a fixed-term contract, have a retainer agreement, or earn through an umbrella company, lenders can assess the stability and reliability of your income.
Additionally, we have access to lenders that specifically cater to IT contractors, treating them as employed rather than self-employed—even if they operate as sole traders or through limited companies. This unique feature is a major advantage for IT professionals, as it simplifies the mortgage process and could open access to better rates.
However, this flexibility is subject to certain criteria, such as:
This tailored approach highlights the value these specialist lenders bring to IT contractors, recognising the unique nature of their work and income patterns.
Since IT contractors don’t always have the typical payslips and tax forms that salaried employees do, you’ll need to provide alternative documentation. Here’s what you might need:
Additionally, we have access to lenders that specifically cater to IT contractors, treating them as employed rather than self-employed—even if they operate as sole traders or through limited companies. This unique feature is a major advantage for IT professionals, as it simplifies the mortgage process and opens access to better rates.
However, this flexibility is subject to certain criteria, such as:
This tailored approach highlights the value these specialist lenders bring to IT contractors, recognising the unique nature of their work and income patterns.
Yes! Many IT contractors are now able to secure mortgages, and in some cases, they may even qualify for higher loan amounts compared to similarly experienced PAYE employees [1]. The key is to work with lenders who understand the nature of your work and can offer products specifically designed for contractors.
Lenders now have more flexible underwriting, meaning they can assess your income and work history even if you don’t have standard payslips. Many contractors also operate as limited companies, which can further demonstrate their financial stability and ability to repay a mortgage.
Lenders use different methods to verify your income based on your working structure [2]. Here are some examples:
Lenders may calculate your income [3] based on your contract day rate, or they may use business accounts if you run a limited company. They typically calculate your potential borrowing by multiplying your income over a period of time (e.g., annualising your day rate). The more stable your contract history, the more favourable your affordability calculation will be [4].
Self-employed contractors or those running their own limited company can still qualify for a mortgage. Lenders may ask for business accounts, SA302 forms, or contracts to verify income. Be prepared to show how your work is stable and ongoing.
[1] Contractor UK (n.d.) Contractor Mortgages Advice and Information (Accessed 11.11.24)
[2] UK Money Man (18.10.24) How Do Mortgage Lenders Look at Self Employed Income? (Accessed 11.11.24)
[3] Experian (n.d.) Self-employed mortgages (Accessed 11.11.24)
[4] Halifax (n.d.) Self-Employed Mortgage Guide (Accessed 11.11.24)
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