Tools
Contractor mortgage calculator
Day rate lenders work out a contractor’s income as the day rate × 5 days × a set number of weeks, often 46 or 48. This calculator shows the annual income that produces and an illustrative borrowing range.
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Turn your day rate into an annual income
Enter your day rate to see how a day rate lender might annualise it.
Illustrative only. This is not a mortgage offer, an agreement in principle or a recommendation. Income is worked out as day rate × 5 days × the weeks you choose, and the range uses simple income multiples of 4.5 to 5.5 times; the upper end is only offered by some lenders in some cases. Lenders also check your contracting history, your current contract, outgoings and credit history. All lending is subject to underwriting and valuation.
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The calculator above annualises a day rate the way many day rate lenders do. For a limited company contractor who keeps profit in the business, that figure is often higher than the income shown in the accounts.
When is the day rate route used?
UK lenders that use the day rate usually want a current contract, some contracting history and bank statements showing the contract income. The route tends to suit limited company contractors with low drawings, contractors who have recently increased their rate, and some umbrella and inside IR35 contractors. Other lenders assess contractors on their accounts instead, like any company director.
Our comparison of day rate vs accounts based lending sets the two routes side by side, and turning a day rate into income shows how the weeks change the figure.
How should I fill it in?
- Day rate: the rate on your current contract, before tax.
- Weeks: 46 is the more cautious assumption many lenders use; 48 is used by some. Try both to see the difference.
The calculator assumes five days a week. If you work fewer days, or your contract is hourly, talk to us, as lenders treat those differently.
Why is the result only a starting point?
A real assessment also looks at your contract type, history and any gaps, your outgoings and credit, your deposit and the property. Our page on contractor mortgages explains what lenders usually ask to see.
Common questions
How do mortgage lenders calculate a contractor's income?
Day rate lenders multiply the day rate by the days worked each week, usually five, and by a set number of weeks, often 46 or 48. Other lenders use accounts or tax returns instead. All lending is subject to underwriting and valuation.
Why do some lenders use 46 weeks and others 48?
Each lender sets its own allowance for holidays and gaps between contracts. Using 48 weeks rather than 46 adds two weeks of income, which on a £450 day rate is £4,500 a year.
What else do lenders check for contractors?
Lenders usually check contracting history, often around 12 months, the time left on the current contract, gaps between contracts and the usual affordability checks on outgoings and credit.
Is the calculator result a mortgage offer?
No. It is an illustration based on simple income multiples, not an offer, an agreement in principle or a recommendation. An adviser would look at your contract, history and full circumstances first.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All lending is subject to underwriting and valuation.
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