Can Contractors Get Buy-to-Let Mortgages?
Can Contractors Get Buy-to-Let Mortgages?
Blog Article
Yes—contractors can absolutely get buy-to-let mortgages. In fact, many lenders are open to working with contractors who want to invest in property, whether as a long-term strategy or to supplement their income.
That said, buy-to-let (BTL) mortgages have different criteria than standard residential ones. Here’s what contractors need to know.
Key Differences with Buy-to-Let Mortgages
Lenders focus on rental income, not just your personal income
Higher deposit requirements—usually 20–25%
Typically interest-only (you repay the capital at the end)
You must meet minimum income requirements—usually £25,000+
Some lenders are more flexible if you're applying as a contractor, especially if you're experienced and have a strong financial profile.
Contractor-Specific Considerations
Lenders may still want to see:
A history of contracting
Your daily rate or company accounts
A clean credit history
Even though rental income is the primary focus, your personal finances still matter—especially if you're a first-time landlord.
Rental Income Requirements
Most lenders use a rental stress test to ensure the rent covers the mortgage. Common criteria:
Rent must cover 125–145% of the monthly mortgage payment
Assumes an interest rate of 5–6% (even if your rate is lower)
For example:
If the monthly mortgage payment is £800, the rent should be at least £1,000–£1,160.
Tips for Success
Save a bigger deposit—the more you put down, the better the rates
Use a specialist broker to access contractor-friendly BTL lenders
Consider using a limited company structure for potential tax benefits (seek advice first)
Final Thoughts
Buy-to-let can be a great opportunity for contractors looking to diversify their income. With the right guidance, it's entirely possible to secure a competitive BTL mortgage—even if you're not in a permanent job.
At Contractor Mortgage Solutions, we help contractors invest in property with confidence and clarity.