Contractor Mortgages: How to Get the Best Deal Through a Broker

For thousands of UK limited company contractors, getting a mortgage can feel like trying to fit a square peg into a round hole. You may have a healthy day rate, consistent contracts, and solid retained profits inside your limited company, yet a mainstream lender’s tick-box affordability model can still treat you as “complex.”

The good news is that contractor friendly lending is well established in the UK, and the right mortgage broker will know the lenders to approach to unlock higher borrowing, beneficial rates and in general provide a far smoother process than going direct.

Why contractor mortgages can be different

Most high street mortgage applications are built around straightforward PAYE income. Limited company contractors often take a tax efficient mix of salary and dividends, and may leave profits in the business. That can create a mismatch between what you earn and what you show on personal payslips and SA302s, creating a need for specialist contractor mortgages.

Specialist contractor lending can assess affordability using alternative measures such as your contract rate (day rate x 5 days x 46/48 weeks), or a blend of salary and dividends, or in some cases company net profit. The route that works best depends on your profile: contract history, industry, deposit size, credit record, and whether you’re inside or outside IR35.

Inside vs outside IR35: does it matter?

In practice, it can. Some lenders are comfortable with inside IR35 contractors if the income is regular and provable (often through payslips and bank statements), while others strongly prefer outside IR35 contract based underwriting. What matters most is how stable and documentable your income is, not the label itself, but underwriting preferences vary, which is exactly where a broker earns their fee.

What a mortgage broker actually does for contractors

A good broker doesn’t just “shop around.” They interpret your situation the way underwriters will, position your case to the right lenders, and pre-empt questions that can otherwise slow everything down.

For limited company contractors, this often includes:

• Identifying which lenders will use your day rate, vs salary/dividends, vs company profit

• Advising how to present income if you take minimal dividends or keep profits retained

• Matching your case to lenders based on contract length, time remaining, and renewal likelihood

• Navigating “quirks” like short gaps between contracts, newly formed companies, or multiple income streams

• Securing product pricing that might not be visible on comparison sites, and timing submissions to avoid rate shocks

Some lenders also offer broker only products or slightly better rates/fees through intermediary channels, so going direct can mean you simply never see the most suitable options.

How to get the best deal: the contractor playbook

1) Treat affordability as a strategy, not a formality

Contractor mortgages can be underwritten in different ways, and the method you choose can materially change borrowing. If you’re aiming for a higher loan size, day rate assessment may be best. If you want the sharpest rate with minimal friction, a clean salary/dividend picture may win. Ultimately, everyone wants to know how much they can borrow.

2) Prepare your documents early

Brokers can move faster, and negotiate more confidently, when your paperwork is tidy. Commonly requested items include:

• Current contract and any extensions

• 3–6 months’ personal and sometimes business bank statements

• Limited company accounts (if available) or accountant’s certificate

• SA302s/tax year overviews

• Payslips if you’re inside IR35 or using an umbrella

• Proof of deposit and ID/AML documents

If you’ve recently changed contract, have gaps, or have multiple contracts, provide a short written timeline, including your IR35 status for each engagement. Underwriters love clarity.

3) Don’t just compare rates, compare total cost

The “best deal” isn’t always the lowest headline rate. Broker comparisons should model:

• Product fee vs fee-free options

• Incentives (free valuation, cashback, legal packages)

• Early repayment charges (especially important for contractors who may overpay)

• Portability and flexibility if you might move

• Lender criteria that could derail you late in the process

A slightly higher rate with lower fees can be cheaper overall, especially on smaller loans.

4) Improve your profile before you apply

Small steps can make a meaningful difference:

• Reduce unsecured debt and keep credit utilisation low

• Avoid new credit applications for 2–3 months beforehand

• Make sure your electoral roll and addresses are consistent

• If you can, build a larger deposit (better LTV = better pricing)

• Keep your bank statements “boring” in the run-up (no returned payments, avoid gambling flags)

5) Use a broker who actually understands contractors

Not every broker is contractor focused. Look for someone who can clearly explain which lenders are suitable for:

• day-rate contractors

• short contract remaining (e.g., less than 6 months)

• limited trading history or newly incorporated companies

• inside IR35/umbrella arrangements

• complex income (multiple companies, CIS income, bonuses, foreign income)

• Know contracting inside out, including about what contractor business insurances they are best to hold

The right broker will give you lender reasoning up front, not vague reassurance.

Remortgaging: where contractors can win big

Contractors often benefit from revisiting their mortgage at the end of a fixed rate. A broker can reassess you against a wider panel, especially if your income has improved or you’ve built equity. With a better loan-to-value banding (as decided by the lender), you may unlock materially better pricing, and in some cases, a lender that’s more relaxed about your income structure than your current provider.

The bottom line

A UK limited company contractor mortgage isn’t a niche product anymore, but it is a niche process. Getting the best deal is about aligning your income story with the right lender’s underwriting model, not forcing your application through a standard PAYE funnel. A broker who understands contractors can help you borrow what you need, avoid unnecessary declines, and optimise the true cost of the mortgage, so your limited company setup becomes an advantage, not an obstacle.