Contractors can define a wide range of different employment scenarios from a wide range of different industries. Whether it’s Zero Hours Contracts in retail or CIS Contractors in Construction. They are both defined as Contractors, but both are considered very differently by lenders.

CIS Contractors

The most common Contractor enquiries we get from Applicants are Construction Industry Scheme Contractors (CIS Contractors) and IT Contractors. A lot of the time these types of Contractors come to us after either being declined by a lender or being offered a much smaller Mortgage amount than they require. The reason for this is most lenders view Contractors as Self-Employed and therefore require years’ worth of accounts and go off the Net Profit figure shown within their accounts. This is often much lower than their actual earnings as the Net Profit is the final figure after all of their expenses have been taken off.

However, there are lenders out there which won’t deem CIS and IT Contractors under the same criteria as they do Self-Employed, and each will have their own ways of calculating and assessing these types of income. We know which lenders are best to go to when you need to maximise the amount you can borrow. Contact us to speak to one of our Mortgage Advisors which Specialise in this area.

Construction Industry Scheme Contractors

Usually applicants under the CIS Scheme, will struggle to obtain a Mortgage as most lenders will deem them as Self Employed and will use their Net Profit figure as shown on their Tax Calculations. This will often result in the lender slashing the amount they are able to borrow.
Fortunately, there are some lenders who have specific criteria for CIS Contractors, where they essentially view them in a similar way for affordability purposes as employed persons.

This massively increases the amounts that applicants are able to borrow. Not only that, these lenders also offer some of the most competitive rates in the market. And our Mortgage Advisors regularly get exclusive deals with these lenders, making these rates even cheaper.
A CIS Contractor could be anyone in any role, that works on a Construction site or works as a tradesman.

To be considered by these lenders on this basis you will usually need to meet the following criteria:
  • Your tax is deducted at source, before you receive your wages
  • Have a minimum of 3 months payslips or 
  • Have a 12 month track record as a CIS Contractor
Obtaining a Mortgage on this Scheme is also available to the following:
  • Applicants with a 5% Deposit
  • Those who have less than 1 years Self-employed figures
  • Those with previous Light Adverse Credit
What documentation the Mortgage Lenders will need to approve your Mortgage Application:
  • 3-12 Months worth of Payment slips, dependant on the Mortgage Lender – lenders will use the gross figure (before tax) on your payslips to calculate your annual earnings and use this to help calculate how much you can borrow
  • Up to 3 Months worth of Bank Statements

Each individual case is of course different, and it is best to speak to one of our Mortgage Advisors who Specialise in these cases.

IT Contractors

Like above, IT Contractors tend to struggle to obtain a Mortgage due to lenders considering them Self-employed. When this is the case, lenders will usually require 2-3 years worth accounts. This rarely proves a viable option for Contractors as their Net Profit, when a Sole trader, and Salary and Dividends when a Limited Company, is usually much lower than their actual earnings.

However, there are some lenders who have their own separate criteria for IT Contractors. Again, each of these lenders will also view IT Contractors differently and have their own criteria that will need to be satisfied. If you satisfy this Criteria the key benefit is usually a massive increase in affordability but may also even be the difference between being accepted by the lender or not. For example, if you have only been a Self-employed Contractor for less than a year, you could still meet the IT Contractor criteria, but almost certainly wouldn’t meet the lenders Self-employed criteria. 

To be considered under the lenders usually preferable Contractor criteria, you don’t just have to be an IT Consultant. You could be a Project Manager, Business Analyst or a Developer. What’s usually more important is your rate of pay and your Contract itself.

Lenders will often take the following into consideration when establishing whether the applicant meets their IT Contractor criteria.

Lenders will often take the following into consideration when establishing whether the applicant meets their IT Contractor criteria.


  • How your tax is paid – at source or via a tax return
  • You’ll usually need 2 years’ experience in the same type of employment or 12 months contracting experience
  • You’ll usually need to be earning at least £250 per day or £50,000 per year
  • Ideally have 3 months remaining on your contract, although not essential for experienced high earners
Obtaining a Mortgage on this Scheme is also available to the following:
  • Applicants with a 5% Deposit
  • Those who have less than 1 years Self-employed figures
  • Those with previous Light Adverse Credit 
What documentation the Mortgage Lenders will need to approve your Mortgage Application:
  • Your current Contract
  • Occasionally lenders may also require your previous Contract or previous employment details
  • Future Contract that is in place if applicable
  • 3-6 months’ worth of Bank Statements dependent on the lender
Lenders will usually use the following calculation to calculate your annual salary:
  • Your daily rate of pay X 5 (days) then X by 46 (weeks) = Annual Salary that can be used for affordability purpose.
  • To give you an example; £250 X 5 = £1,250 X 46 = £57,500

The reason your weekly earnings are times by 46 weeks, is to take into account things such as holidays and any gaps between contracts. Which of course you would not receive pay for usually.

Other Contract types

  • Zero Hour Contracts – where the employer is not obliged to provide the employee with any working hours
  • Nursing Bank – workers are matched to cover short term staff shortages at hospital
  • Piecework Contracts – where workers are paid for each piece of work they complete.
  • Temporary Contracts – potentially acceptable if on an employed basis
  • Fixed Term/Short Term Contracts – employed for a fixed set period within a company i.e. to cover Maternity leave
  • Umbrella Contract & Agency work – usually where you have a contract with an Agency but work for a different company

Generally, Lenders will accept the above type of employment Contracts providing there is a minimum track record of at least 12 months. This will need to be evidenced by Payslips and P60’s. And occasionally, a copy of the Contract or an Employer Reference.

  • Sub-contractors – generally, it will be down to the individual contract, whether they pay their own tax or not and depend on how much they earn. Most lenders will consider Sub-contractors as Self-employed. Other Lenders may allow them to fit in any one of their other Contractor Criteria, for example CIS Contractors.
  • Seasonal Contracts – working within a Business during a particularly busy period i.e. Christmas – not many Lenders will accept this due to a concern over sustainability over the rest of the year. Will need at least a 2 year track record of this

Simply have a question or need to get moving. Next steps?

Not all Mortgage Advisors will have the specialist knowledge or even deal with Contractor Mortgages. Speak to one of our qualified, regulated and highly rated Mortgage Advisors. Simply complete our short Mortgage Enquiry form and we will get one Mortgage Advisor that is local to you and which specialises in your case, to give you a call. They can answer any other questions you have, provide you with a free non-obligatory quote and/or talk you through the process in greater detail.
If you’re a Contractor or have had Adverse Credit in the past, don’t worry, we can help. As a specialist in these areas, we have access to all Specialist Mortgage Lenders.
All our Mortgage Advisors hold the full CeMap qualification (Certificate of Mortgage Advice & Practice) and are regulated by the Financial Conduct Authority.

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