95% Contractor Mortgage
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Shane Reavey
Job Title: Mortgage and Protection Advisor
Mortgage advice professional
Can I get a 95% mortgage as a contractor?
You’ll be glad to hear the answer is yes – otherwise it would be a very short podcast.
It tends to work in line with other 5% deposit mortgages, but there’s more detail around how we evidence the income and what’s required.
Do I have to be a first-time buyer contractor to get a 95% mortgage?
No, you don’t have to be a first-time buyer. A few lenders do have 5% deposit products tailored towards first homes, but many are willing to consider a 5% deposit mortgage for a contractor, whether you’re a home mover or a first-time buyer.
How much deposit will I need and how much can I borrow?
Typically you would need a 5% deposit, but a few lenders are now offering 2% deposits or a minimum of £5,000 deposit.
We’re recording this podcast in May 2026 and one of the main high street lenders is now offering a £5,000 deposit scheme. That’s available for contractors and the self-employed as well as the employed.
When applying for a 95% mortgage as a contractor, what methods do lenders use to calculate my income?
It will depend on how you declare that income. For day rate contractors, some lenders will use that day rate and multiply it by five to get a weekly income. They’d use that to get a year’s figures, probably taking off four to six weeks’ to allow for annual leave.
Others will work from the amount stated on your contract. They evidence that by looking at your previous and ongoing contract documents.
Some contractors just declare their income like any other self-employed applicant, where a lender will look at an accountant’s certificate, the company accounts or your tax calculations and tax year overviews.
Which lenders lend a 95% mortgage to contractors?
The lender I mentioned offering a £5,000 deposit is Halifax, part of the Lloyds Banking Group. That’s going to be a big one and they’ve started advertising it on social media. But a lot of high street lenders will consider a 5% deposit.
I always approach this on a case-by-case basis. Getting a yes or no is all about presenting your case to lenders in the best possible light. We factor in everything: your deposit, how long you’ve been trading, how your business works and your credit history.
We can approach high street lenders, and there are others offering products for situations that are more niche.
What is the maximum mortgage term for a 95% contractor mortgage?
There’s no cap on term for a contractor – it’s no different for you than someone who’s employed, self-employed or who has a bigger deposit.
Most lenders go up to a 35-year term, and some go to 40 years. Key points to factor in are the type of work you do and what age that can take you to. We also factor in your state retirement age and when you anticipate stopping work.
In IT contracting, for example, the chances of getting a mortgage up to age 70 would be relatively high. For a scaffolder – a much more manual job – there would be more hoops to jump through to evidence how that income is sustainable to age 70.
What documents do I need to provide to prove my income for a 95% contractor mortgage? Do I need a certain contract history?
The documents show how your income is declared and paid. Typically a contractor will need current and previous contracts. Depending on how long your track record is, a lender may ask for your employment history or CV to see your experience in that line of work.
If you run a limited company, we need the last two years’ limited company accounts, plus bank statements showing current income. Some contractors fall under the Construction Industry Scheme, and we’ve done a good podcast on that. Some lenders would need two years’ evidence, while others just take the last three months’ CIS payslips.
If you’re a contractor preparing to get a mortgage, make sure all your accounting is up to date. If you use an accountant, make them aware of your plans to get a mortgage, so they can get the accounts prepared ready as evidence when you want to apply.
Speak To an Expert
Come on in and be quite forward with what you’re after – just be very honest with your mortgage broker. It’s good to make sure that we know absolutely everything about you. That way we can’t be blindsided by a lender. An open book policy is very good when coming to see your mortgage broker.
Does it make a difference if I’m contracting through a limited company, an umbrella company or I’m self-employed?
It doesn’t matter for the lender’s decision, but it will impact how we evidence the income. For limited company directors, it’s typically your salary plus dividends you take from the company.
Some lenders may look at using net profit rather than dividends, which could allow you to borrow more. Contractors in umbrella companies are almost treated as employed, and we might just need the last three months’ payslips.
For self-employed contractors in the Construction Industry Scheme, it might be the last three months or two years of tax calculations.
A day rate contractor may need invoices for the last two years. Some lenders are happy with the most recent contract – it’s very much case specific.
Are there any government-backed schemes that offer 95% mortgages?
The Mortgage Guarantee Scheme makes 95% mortgages available, and the government has no specifications around being employed or self-employed. It falls to the lender to evidence employment and income.
It’s not just about your income on the day of the application. Lenders typically want a two year track record for contracts, looking at the past, present and future. All those factors go into the lending decision [information correct at the time of recording in May 2026].
What are the typical interest rates and associated arrangement fees for a 95% contractor mortgage?
At 95%, rates are higher than with a larger deposit. It’s seen as risk based lending, and if the lender is taking on 95% of the risk against the property price, they will charge a little more.
But lenders won’t add a further premium for a contractor or the self-employed. The rates at a 95% Loan to Value are the same for everyone.
Mortgage arrangement fees typically range from 0 to £1,000, but fees are less common at a 95% Loan to Value because you can typically add that fee to the mortgage. That would then increase the Loan to Value even more, risking possible negative equity in the future. Again, not having an arrangement fee tends to push the rate a little bit higher.
Can I get a 95% mortgage as a contractor if I have bad credit?
Yes, and it’s quite common for people to have historic adverse credit. Lenders can be quite understanding about what’s happened. They tend to ask us to explain how that adverse credit came about, and more importantly, what’s happened since – to make sure it won’t happen again.
With adverse credit on your file, you can get a 95% mortgage. Every lender has their own risk profile and high street lenders’ attitude for a risk is less than a provider that’s charging a little more.
Can I remortgage my 95% contractor mortgage? Is the product portable if I move house?
Yes, typically you always have the chance to remortgage. You would look at the equity you’ve built up in the property – has your house price increased and the mortgage balance decreased?
If you want to move home, we need to factor in whether you have enough savings or equity to cover legal fees, moving costs, estate agency fees and Stamp Duty. But in theory, yes, it is possible, and most mortgages in the market come with an element of portability.
Can I get a 95% Buy-to-let mortgage?
Typically not, no. Most Buy-to-let mortgages require a 25% deposit, but some are available with 20%. You do need that bit more for a Buy-to-let.
You’ve demonstrated how a mortgage broker can help – is there anything else to add?
As brokers, we’re delving through different lenders criteria all the time – and it all changes very often. We’re here to take that frustration away from you and look at your whole scenario. We wouldn’t just find you a 95% contractor mortgage, we’d look at all the options based on everything you tell us. We speak to lenders about their appetite based on your income evidence.
Key Takeaways:
- Contractors are eligible for 95% mortgages and do not need to be first-time buyers, with many lenders willing to consider home movers as well.
- While a 5% deposit is standard, some lenders offer products that require only a 2% deposit or a minimum of £5,000.
- Lenders calculate income in several ways, including annualising a day rate (subtracting four to six weeks for annual leave) or assessing the income declared on your contract, company accounts, or tax calculations.
- Required documents typically include current and previous contracts; limited company directors need the last two years’ limited company accounts and bank statements.
- Interest rates for 95% Loan to Value mortgages are higher than those for larger deposits due to the higher risk, but lenders do not charge a further premium specifically for contractors.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
THERE MAY BE A FEE FOR MORTGAGE ADVICE. THE ACTUAL AMOUNT YOU PAY WILL DEPEND UPON YOUR CIRCUMSTANCES. THE FEE IS UP TO 1%, BUT A TYPICAL FEE IS 0.3% OF THE AMOUNT BORROWED.