95% Contractor Mortgage

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 whether you’re a limited company, working under an umbrella or you’re self-employed. We’ll be looking at the same things. If someone is taking a cut of your income, we allow for that – we’ll only look at the amount you receive. There are things we can do for all of those scenarios, so don’t worry about that.

Are there any government-backed schemes that offer 95% mortgages?

As we speak today in May 2026, there aren’t any particular government schemes.

Lenders just offer 95% mortgages individually – you don’t need a government-backed scheme as they’re available anyway.

What are the typical interest rates and associated arrangement fees for a 95% mortgage?

I won’t quote any rates because obviously they’d disappear by tomorrow. Regardless of whether you’re contracting or not, 95% mortgage rates are the highest because it’s the biggest risk for the lender. It’s the lowest deposit they will accept. 

If you could put in 10%, you get quite a difference on the rate and that’s quite noticeable on your monthly payments. 

Associated arrangement fees very much depend on the lender and what’s most cost effective for you – and also how long that rate will last. Let’s say we’re fixing for two years and borrowing £100,000 – it’s unlikely to be cost effective to pay a higher fee to get a lower rate.

If you’re borrowing £500,000, though, you’d be better off with a low rate, even if that means paying a fee. You can add fees to the loan, by the way, and they typically range from zero to £1,000. That doesn’t vary for contractors – it’s the same for everyone.

What if I have bad credit? Can I still get a 95% mortgage as a contractor?

As always, it depends on how bad your credit is. If you missed a credit card payment three years ago, no one will care about that.

But if you’ve racked up defaults and County Court Judgements (CCJ’s), we’re in trouble. Contractor or not, 95% mortgages are hard to get without clean credit. There are lenders we can go to, but they’re more specialist and you will pay more.

Again, a bigger deposit is better if you have adverse or bad credit. It’s tricky to ask a lender to give us 95% of a property’s value while you have missed and late payments on your file. It’s not going to fill them with confidence. 

If you don’t pay it back, they will repossess you – and they want to get their money back after all the costs it takes to sell that property. At 95% there’s a risk they will lose out. Getting a 95% mortgage with bad credit is tricky, but it depends how bad it is.

Can I remortgage my 95% contractor mortgage? 

Yes, you can. If you took out a 95% mortgage as a contractor a few years ago, the chances are it won’t be 95% any more – because the mortgage balance will go down and the house price will hopefully have gone up. You might now be at 90%, which makes things easier.

But if you are still at 95% or you need to top it back up to that level for whatever reason, you can get a remortgage.

Is a 95% product portable if you move house? 

Generally, yes. Most lenders’ mortgages are portable. It could depend on you having money in the background, because if you have a 95% mortgage now and you’re looking to move, once you’ve paid estate agent fees, solicitors fees and stamp duty on a new property, you’re not going to have a 5% deposit any more. 

There are endless scenarios, but in general terms, most mortgages are portable. Just be careful about whether you can actually move or not – as there are lots of fees to pay.

Can I get a 95% Buy-to-Let mortgage?

No. You need at least a 20% deposit for Buy-to-Let – and in my experience, it rarely works at that level. You normally need 25% or more.

Lenders factor in how much rent you’re going to get for the property, and that needs to cover the mortgage payment plus a margin that depends on that lender’s calculations. It’s very hard to make that work with less than 25% deposit.

You’ve demonstrated how a mortgage broker can help, have you got anything else to add? 

With any form of complex income or anything slightly out of the ordinary, it’s very hard to go and find a suitable mortgage yourself. We know where to start, who to go to and who not to bother with. That’s why you should always speak to a mortgage broker.

Key Takeaways:

• Contractors are absolutely eligible for 95% mortgages and are not discriminated against based on their employment status.
• While a 5% deposit is required, the interest rates are generally high, making a 10% or 15% deposit more financially beneficial.
• Lenders can calculate a contractor’s income by using their day rate and multiplying it across 46 weeks of the year, which often results in a higher borrowing figure than using limited company profits or salary/dividends.
• A minimum contracting history is necessary, with 12 months being the standard, although six months with a renewed contract may be accepted by some lenders.
• You cannot obtain a 95% Buy-to-Let mortgage; a minimum deposit of 20% to 25% is usually required for this type of property loan.
  
  

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY-TO-LET MORTGAGES. 

For specialist tax advice, please refer to an accountant or tax specialist.