Yes – most umbrella company contractors can get a mortgage, and many do. You’re not treated exactly like a full-time employee, but you’re not self-employed either. These days, lenders are much more familiar with flexible ways of working, especially if you apply through a broker who understands the contractor market.
This guide explains the process, what lenders look for, and how to prepare your application if you’re paid through an umbrella company.
You’re classed as employed – but not in the usual way
When you contract through an umbrella company, you’re technically employed by that company. They take care of your tax, National Insurance, and payroll. You get a payslip, just like any other employee.
The key difference is that your work is often contract-based, and your income may vary month to month. Some lenders still struggle with that, but many don’t. The important thing is how your income is presented.
Lenders assess your income differently
If you apply to a lender that understands umbrella workers, they may:
- Use your contract rate to estimate annual income
- Average your last few payslips
- Look at your contract history and CV
- Ask for payslips and bank statements going back 3–6 months
Some will also want to know how long you’ve been contracting and whether there have been any recent gaps between roles.
You don’t need to be self-employed or have years of accounts
Umbrella workers are not treated the same as sole traders or limited company directors. You don’t need to submit company accounts (as you don’t work through a limited company) or SA302s.
Instead, you’ll typically be asked for:
- Your current contract (with the daily or hourly rate)
- Recent umbrella payslips
- Matching bank statements
- Proof of ID and address
- Your CV or work history
If you’ve only recently switched to umbrella work, some lenders might want to see how long you’ve been in your industry overall.
How your income might be calculated
Some lenders will use a contract-based formula to estimate your gross annual income. This is commonly based on:
Day rate × 5 days × 46 weeks
For example:
£450/day × 5 × 46 = £103,500
They might then apply a borrowing multiplier – often around 4.5 – to calculate how much you could borrow, depending on other factors like your credit history and outgoings.
You can try different scenarios with our contractor mortgage calculator. It’s a simple way to estimate your borrowing power based on your day rate.
Why a specialist broker makes a big difference
This is where many umbrella contractors run into problems. You might go straight to your bank, only to find they don’t understand how to assess your income, or they treat you as a temporary worker with unstable earnings.
A broker who works regularly with contractors – such as Broadbench – can match you with lenders who look at your full income picture, not just what’s on your most recent payslip. This can make a big difference to how much you’re allowed to borrow.
Buy-to-let mortgages if you’re with an umbrella company
Many umbrella contractors also invest in rental properties, but buy-to-let mortgages have their own specific rules. You’re not applying as a regular homeowner, so lenders will assess the risk differently.
You’ll usually need a bigger deposit than you would for a residential mortgage. In most cases, that means 25 per cent or more of the property’s value. A few lenders may accept 20 per cent, but the choice is limited and the rates tend to be higher.
Most lenders also want to see that you earn at least £25,000 a year from your day job.
That includes umbrella income, but only if it’s stable and well-documented. If your payslips vary significantly, they may average your earnings over several months or request additional evidence, such as a contract or CV.
Other factors that can affect your application:
- The type of property (e.g. flat above a shop, ex-local authority, or HMO)
- Whether you already own any rental properties
- Your credit record and recent payment history
- Whether the expected rental income meets the lender’s coverage ratio
This is another case where using a broker can make life much easier. Some lenders won’t deal with buy-to-let applicants directly, and others may not fully understand how umbrella income works.
Want to check what your monthly repayments might look like?
If you already have a ballpark figure for the mortgage you’re aiming for, try our mortgage repayment calculator.
Enter the loan amount, interest rate, and term, and it’ll show you what your monthly repayments could look like.
This is useful whether you’re buying your own home or considering a buy-to-let investment.
Key things to keep in mind
- Umbrella contractors are classed as employees, but with non-traditional income
- You don’t need to be self-employed or have your own limited company
- The way your income is presented matters, especially if it goes up and down
- Some lenders are much better than others at handling umbrella applications
- A good broker can steer you toward the ones that understand your situation
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