Mortgage Affordability on a £1500/Day IT Contract Rate (UK)

On a £1500 day rate, the contractor formula (£1500 × 5 days × 46 weeks) gives an annual income of £345,000. A specialist lender applying 4.5× to 5.5× would offer £1,553,000 to £1,898,000. A lender that looks only at a £12,570 director salary would offer around £50,000, though most high street lenders also count your dividends.

Standard underwriting looks at what you draw from your company, not what you bill: salary plus dividends from your last two tax returns at most high street lenders, and the salary alone at a few. A contractor drawing £12,570 (the personal allowance, to minimise income tax) and leaving profit in the company looks like a low earner. Contractor-specialist lenders base affordability on the day rate formula instead.

Outside IR35: specialist lenders use the full £1500/day formula as your income baseline, giving you the full £1,553,000 to £1,898,000 range. Inside IR35 via umbrella: lenders may use the gross contract rate or your PAYE payslips. Most specialist lenders now accommodate both, though the strongest position for maximum borrowing is typically outside IR35 through your own Ltd company.

For a £1500/day contract: your current contract (at least 3–6 months remaining), last 3–6 months of business bank statements, last 2 years of SA302 forms, and Ltd company accounts if outside IR35. Some lenders accept first-time contractors with a strong current contract.

The industry standard is 46 weeks. This accounts for approximately 6 weeks of annual leave and bank holidays during which contractors do not bill. Most specialist lenders use 46 to 48 weeks. The calculator defaults to 46, which is the most conservative and most widely accepted figure for underwriting purposes.

Yes, in a few ways. Some specialist lenders go up to 5.5× income for higher earners with a strong track record. Adding a second applicant's income increases the borrowing ceiling, and some lenders will also consider dividend income on top of the day rate formula. A specialist contractor mortgage broker can identify which lenders will give you the maximum figure for your situation.

A 5% to 10% deposit is typical if you meet a contractor-friendly lender's criteria, and around 15% is common if you only have one year of accounts. On your maximum specialist borrowing of £1,898,000, a 10% deposit would allow you to purchase a property up to £2,109,000. Contractors with a strong track record and a current contract often access the same loan-to-value ranges as employed borrowers. A larger deposit also lowers the interest rate tier.

With a specialist contractor mortgage broker, the typical timeline is 4–8 weeks from initial enquiry to mortgage offer. Key stages: initial assessment and decision in principle (1–2 weeks), full application and document submission (1–2 weeks), lender underwriting and valuation (2–4 weeks). Having your current contract, 3–6 months of business bank statements, and most recent SA302s ready significantly accelerates the process. Some lenders offer fast-track underwriting for contractors: ask your broker specifically about turnaround times.