Mortgage Calculators
Contractor Mortgage Calculator
Contractors are not assessed on last year’s accounts by the right lender. They are assessed on the day rate, and how that rate is annualised differs between lenders.
- Day rate annualised over 46 and 48 weeks
- The borrowing difference between the two
- No need for three years of accounts with the right lender
- Whole-of-market advice on contractor cases
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The number of weeks a lender annualises over is its own policy, not a fact about your working year. This is an estimate based on typical lender criteria and current rates. It is not advice, a recommendation, or an offer of credit. What you can actually borrow depends on your circumstances and the lender's own assessment.
This calculator annualises a day rate over 46 or 48 weeks and applies a 4.5 times multiple. Both the number of weeks used and the multiple vary between lenders, and some assess contractors on accounts instead. Correct as at 15 August 2026; lender criteria change without notice.
Why the number of weeks matters so much
Contractor-friendly lenders take the day rate, multiply it by the days worked per week, and then by a set number of weeks to reach an annual figure. That number of weeks is a lender policy decision, not a fact about your working year, and it varies. Pepper annualises over 46 weeks. Kensington uses 48.
Two weeks sounds trivial and is not. On a £450 day rate worked five days a week, the gap between 46 and 48 weeks is £4,500 of assessed income, which at a 4.5 times multiple is £20,250 of borrowing. Same contractor, same contract, same day rate. The difference is entirely which lender the case goes to.
This is also why going direct to a high street lender is often the worst route for a contractor. Many will simply ask for two or three years of accounts and assess the net profit or salary and dividends, which usually produces a much lower figure than the day rate method.
The same contractor, two very different answers
A contractor on £450 a day, working five days a week, goes to a lender that annualises over 46 weeks. That produces an assessed income of £103,500. At a 4.5 times multiple the maximum borrowing is around £465,750. The same contractor at a lender using 48 weeks has an assessed income of £108,000 and a maximum of £486,000. Just over £20,000 of difference, created entirely by a policy decision neither the contractor nor the property has any influence over.
Now compare that with the accounts route. If the same contractor operates through a limited company and draws a modest salary plus dividends totalling £55,000 to manage tax efficiently, a lender assessing on salary and dividends sees £55,000, not £103,500. At the same multiple that is roughly £247,500 of borrowing. The tax planning that made sense for the accountant has just halved the mortgage.
This is why the choice of lender matters more for contractors than for almost anyone else, and why a contractor who applies directly to their own bank and gets a disappointing figure should not conclude that is the market’s answer. It is one lender’s answer, produced by one method.
What lenders look at besides the day rate
Continuity is the main one. Lenders want to see that contracting is how you work rather than something you started last month, and most look for a track record of contracts in the same field. Gaps between contracts are normal and expected in most sectors; what causes difficulty is a long unexplained gap immediately before the application.
Time remaining on the current contract matters too, commonly around 28 days as a minimum, though a history of renewals with the same client carries weight. If the contract has expired and a renewal is being negotiated, evidence of that negotiation is usually more useful than waiting for the paperwork.
Some lenders also treat contractors differently depending on how they are engaged: through an umbrella company, through your own limited company, or inside IR35 with tax deducted at source. Those three are not interchangeable in criteria terms, and getting the case to a lender whose policy fits your arrangement is most of the work.
Where to go next
Independent sources
- GOV.UK: off-payroll working (IR35) — How your contracts are classified for tax
- MoneyHelper: applying for a mortgage — What lenders ask for and in what order
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Send us your day rate, how long you have been contracting and how you are engaged. We will tell you which lenders assess on day rate and what that means for your borrowing.
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Get your day rate assessed properly
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Frequently Asked Questions – Contractor Mortgage Calculator
Can I get a mortgage as a contractor?
Yes. A number of lenders assess contractors on day rate rather than on filed accounts, which usually produces a higher figure and a simpler application. The key is going to a lender whose policy fits how you actually work.
How do lenders work out contractor income?
Most contractor-friendly lenders multiply the day rate by the days worked each week, then by a set number of weeks a year. That week count is a lender policy: some use 46, some use 48. The result is treated as your annual income and a normal income multiple is applied.
How long do I need to have been contracting?
It varies. Some lenders want twelve months of contracting history, others will consider six, and a few will look at less where you have moved into contracting from an employed role in the same field. Continuity of profession matters more than continuity of employer.
How much time do I need left on my contract?
Commonly around 28 days remaining, though several lenders are comfortable with less if there is a track record of renewals. An expired contract with a renewal in progress is usually workable; a gap with nothing lined up is much harder.
Does bad credit stop a contractor getting a mortgage?
No, but it narrows the field twice over, because you need a lender that accepts both the adverse credit and the day rate method. Those two lists overlap less than you would hope, which is where broker access matters.
Is the day rate method always better?
Usually, but not always. If you draw a high salary and dividends from a limited company with strong retained profit, an accounts-based assessment can occasionally produce more. It is worth running both.