Contractor Mortgages with a Low Deposit – What Are Your Options?

Contractor Mortgages with a Low Deposit – What Are Your Options?

Blog Article

One of the biggest hurdles for contractors looking to buy a home is saving for a large deposit. The good news is, there are mortgage options available even if you only have a small deposit. Whether you're a first-time buyer or looking to move, contractors can still secure a mortgage with as little as 5–10% deposit.

Here’s what you need to know about getting a contractor mortgage with a low deposit.

1. How Much Deposit Do You Need?
While traditional advice suggests a 20% deposit, many lenders now accept:

5% deposit (95% Loan-to-Value or LTV)

10% deposit (90% LTV)

As a contractor, you may still qualify for these low-deposit deals, provided you meet the lender's income and credit requirements.

2. Government Schemes That Can Help
Several government-backed schemes support buyers with small deposits, including:

Help to Buy (England – limited availability): Offers a 20% equity loan on new builds, reducing the mortgage amount.

Shared Ownership: Buy a share of the property and pay rent on the rest.

First Homes Scheme: Offers discounted prices for eligible buyers.

These schemes can lower your upfront cost and make homeownership more achievable.

3. Specialist Contractor Mortgage Lenders
Specialist lenders understand contractor income and are more likely to offer low-deposit mortgages. They assess your earnings based on:

Daily or hourly contract rate

Annualised income (e.g., £400/day × 5 days × 48 weeks)

This method often enables higher borrowing amounts than standard PAYE assessments.

4. Tips to Strengthen Your Application
With a smaller deposit, lenders may view your application as higher risk. Strengthen it by:

Maintaining a good credit score

Reducing any existing debts

Having a consistent contract history

Using a mortgage broker who can access exclusive low-deposit deals

Final Thoughts
A small deposit doesn’t have to stop you from getting a mortgage as a contractor. With the right support, specialist lenders, and government schemes, homeownership is well within reach.

At Contractor Mortgage Solutions, we help you find the right low-deposit mortgage and guide you through every step of the process.