Question 1

Can a contractor remortgage in the UK?

Accepted Answer

Yes. Contractors — whether working through a limited company, as a sole trader, on a CIS (Construction Industry Scheme) basis, or as a day rate contractor via an umbrella company — can remortgage in the UK. Remortgaging as a contractor involves the same process as any other remortgage: you apply for a new mortgage product either with your existing lender (a product transfer, which involves minimal underwriting) or with a new lender (which requires full income verification). The key challenge is that contractors' income is assessed differently from PAYE employees', and not all lenders assess contractor income in the same way. Specialist lenders and mortgage brokers experienced with contractor applications can identify the lenders whose criteria are best suited to your contracting structure and income profile.

Question 2

How is a contractor's income assessed for a remortgage?

Accepted Answer

Income assessment for contractors varies significantly by contracting structure. Day rate contractors (who operate through a limited company or umbrella) may be assessed by specialist lenders on their day rate multiplied by 46 or 48 weeks — treating the day rate as the equivalent of an employed salary. This method often produces a higher assessable income than using accounts-based assessment (which shows only the salary and dividends actually drawn). For limited company contractors where the director draws a modest salary and leaves profit in the company, accounts-based lenders will only count the drawn income, while day-rate lenders may count the underlying contract income. CIS contractors are typically assessed on the gross CIS income shown on deductions statements, often averaged over two years. Umbrella company contractors who are treated as PAYE employees may be assessed on their payslip income, though lenders will verify that the umbrella arrangement is genuine employment rather than disguised self-employment. The income basis used has a direct impact on the maximum mortgage available, so choosing the right lender for your contracting structure is critical.

Question 3

What documents do contractors need to remortgage?

Accepted Answer

Documentation requirements depend on how your income is assessed. For day-rate contractors assessed on contract value: a current contract (with start date, end date, and day rate clearly stated), your most recent contract history showing continuity of work, and bank statements showing income received from your limited company or umbrella. For accounts-based assessment: two years of certified accounts from a qualified accountant, SA302 tax calculation forms and tax year overviews for the same periods, and potentially an accountant's reference letter. For CIS contractors: CIS deduction statements (typically 12 months), SA302 forms, and bank statements. For umbrella company contractors: three months' payslips, P60, and confirmation of the umbrella arrangement. In all cases: proof of identity, proof of address, and three to six months' bank statements. If you are remortgaging to raise additional capital (for home improvements or debt consolidation), you will need to state the purpose of the capital raising and may need to provide a quote or invoice for the works if applicable.

Question 4

Is it harder to remortgage as a contractor than to get the original mortgage?

Accepted Answer

Remortgaging as a contractor is generally no harder than the original purchase mortgage, and in some respects may be easier. If you are doing a like-for-like remortgage (same borrowing, lower or same rate, no capital raising), your existing lender may offer a product transfer that involves minimal re-underwriting — particularly if the lender holds the original file and your payment history is clean. Switching to a new lender requires full underwriting, but by the time of remortgage you will typically have a longer track record of trading and more years of accounts, which makes income verification easier. Lender criteria and contractor-friendly policies also change over time — a lender who did not suit your profile at purchase may now have more flexible contractor criteria, and vice versa. If your contracting income has grown significantly since the original mortgage, a new lender assessment may allow you to access a higher borrowing amount or a lower loan-to-value rate tier, reducing your interest rate.

Question 5

When is the best time for a contractor to remortgage?

Accepted Answer

For contractors assessed on accounts or tax returns, the best time to remortgage is shortly after filing the most recent self-assessment return or having the latest accounts certified by your accountant. This gives the lender the most current income evidence and avoids the problem of presenting a one-year-old set of accounts as the most recent. If your income has grown from year to year, timely remortgaging after accounts are available ensures that growth is captured in the assessment. For contractors on fixed-term deals approaching expiry, the standard advice applies: contact your broker or lender four to six months before the deal ends to secure a new rate in advance. Leaving it too late risks rolling onto the lender's Standard Variable Rate (SVR), which is almost always higher. For day rate contractors who are assessed on current contract value, timing is less dependent on accounting periods but more dependent on having a live contract in place at the time of application — some lenders require at least one month remaining on the current contract, while others will consider contractors between contracts with a strong history of renewals.

Question 6

Which lenders are most contractor-friendly for remortgages?

Accepted Answer

The most contractor-friendly lenders for remortgages include specialist lenders such as Kensington Mortgages, Halifax (which has an explicit contractor policy for IT and other professional contractors), Accord Mortgages, Aldermore, and certain regional building societies. These lenders either accept day-rate income assessment directly or have experienced underwriters who are familiar with contractor income structures. The Halifax contractor policy, for example, allows day rate contractors with at least two years' history in their field to be assessed on daily rate × 5 × 46 weeks, producing an annual equivalent income figure that is often significantly higher than the salary and dividends drawn from a limited company. High-street banks with purely automated underwriting systems tend to be less suitable for contractors, as their systems may categorise limited company income simply as "self-employed" and apply generic self-employed criteria. Working with a specialist contractor mortgage broker gives you access to the full range of lender criteria and ensures your application is presented in the way most likely to produce a successful outcome.

Contractor Remortgage FAQ