The amount of mortgage made available can differ massively depending on both the individual circumstances and the lender involved. 

For instance, let’s consider a scenario where you’re a contractor earning a daily rate of £500. Over the past three years, you’ve been paying yourself a combination of salary and dividends totaling £50,000 per annum through your limited company.

A lender treating you as self-employed might use this £50,000 figure to calculate affordability based on your salary and dividends. However, another lender may have specific criteria tailored for contractors. For instance, they might multiply your daily rate by five to derive a weekly amount, and then annualise it (allowing for annual leave).

In this illustration, assuming 46 weeks of work per year, this method would yield an income of £115,000—more than double the income determined by the first lender.

While ensuring affordability both now and in the future remains paramount, the significant difference in lender selection is evident for contractors seeking a mortgage.