M
MortgageOS
Contractor Guide

IT Contractor Mortgage Guide 2026

Everything IT contractors need to know about getting a mortgage in 2026: day rates, IR35, lender options, and maximizing your borrowing capacity.

Updated January 202612 min read

The 2026 IT Contractor Landscape

IT contracting remains one of the most lucrative contractor sectors in the UK, with strong demand for developers, cloud architects, data engineers, and security specialists. For mortgage purposes, IT contractors generally have excellent options — if they know how to navigate the system.

£450-650

Average day rate

Mid-senior level

85%

Outside IR35

For SME clients

4.5x

Income multiple

With right lender

IT contractors have options

High day rates, strong demand, and specialist lenders who understand tech contracting mean IT contractors often have better mortgage options than they realize. The key is avoiding mainstream banks that don't value contractor income.

What's Different in 2026?

  • Stable IR35 landscape: Five years post-reform, IR35 processes are now routine
  • Remote work normalized: Location-independent contracting is standard
  • AI/ML premium: Specialists in AI, ML, and data command significant premiums
  • More lender competition: Contractor-specialist lending has expanded

Income Assessment Options

As an IT contractor, you have multiple ways to present your income to lenders. The method used can dramatically affect your borrowing capacity.

Day Rate Annualization

Best for most IT contractors

Day Rate: £550

× 5 days × 48 weeks

= £132,000 assessed income

→ Borrowing: ~£594k

Best for: Contractors with current contract, 12+ months history, trading through Ltd company or umbrella.

Share of Net Profit

Good alternative

Company Net Profit: £95,000

Your Shareholding: 100%

= £95,000 assessed income

→ Borrowing: ~£427k

Best for: Directors with 2+ years accounts, especially if day rate doesn't meet lender criteria.

Salary + Dividends

Usually lowest

Salary: £12,570

+ Dividends: £50,000

= £62,570 assessed income

→ Borrowing: ~£281k

Avoid if possible: Only use lenders who assess on salary + dividends if other options aren't available.

Same contractor, 3x difference

The examples above show the same £550/day contractor could borrow between £281k and £594k depending on lender choice. That's why lender selection is critical for IT contractors.

IR35 Status in 2026

Five years after the private sector IR35 reforms, the landscape is now well-established. Most IT contractors understand their status, and lenders are familiar with both scenarios.

Outside IR35

Still the majority for SME clients. You trade through your Ltd company and extract income tax-efficiently.

  • • Day rate assessment available
  • • Share of profit assessment available
  • • Higher net income than inside IR35
  • • More lender options

Inside IR35

Common with larger clients, banks, and public sector. Usually via umbrella company or agency PAYE.

  • • Assessed like employed income
  • • Based on umbrella net pay
  • • Lower borrowing than outside IR35
  • • Some specialist lenders still helpful

Mixed Status Contractors

Many IT contractors have a mix — some contracts inside IR35 (especially public sector or large enterprise) and others outside (SME clients, startups). Lenders typically:

  • Assess based on your current/predominant status
  • May weight income from each category differently
  • Want to understand your likely future status

Status documentation

Keep your Status Determination Statements (SDS) organized. Lenders may ask to see these during underwriting to confirm your IR35 status.

Day Rate Tiers and Borrowing

Here's what typical IT contractor day rates translate to in mortgage borrowing capacity (using 5 days, 48 weeks, 4.5x multiple):

LevelDay RateAnnual (48 wks)Borrowing @ 4.5x
Junior/Mid£350-450£84-108k£378-486k
Senior£500-600£120-144k£540-648k
Lead/Principal£650-800£156-192k£702-864k
Specialist/Architect£800-1000+£192-240k+£864k-1m+

Hot Skills Premium (2026)

AI/ML Engineering

£700-1000

Strong demand, limited supply

Cloud/Platform

£600-850

AWS, Azure, GCP specialists

Cybersecurity

£650-900

AppSec, cloud security

Calculate your borrowing capacity

Best Lenders for IT Contractors (2026)

Tier 1: Contractor Specialists

Use day rate annualization at 48 weeks. Best for maximizing borrowing.

CMME

Broker only, 48 weeks

CLS Money

IT contractor focus

Kensington

Flexible criteria

Tier 2: Net Profit Friendly

Use share of company profit. Good if you don't meet day rate criteria.

Nationwide

Share of profit

Halifax

Net profit method

Accord

Flexible approach

Tier 3: Building Societies

Manual underwriting, often flexible for unusual cases.

Yorkshire BS

Case-by-case

Skipton

Contractor friendly

Leeds BS

Regional option

Avoid salary+dividends lenders

Standard high street banks (Barclays, HSBC, etc.) typically use salary+dividends calculations, which dramatically undervalue IT contractor income. Use these only if you have no other options.

Documentation Checklist

What You'll Need

Contract Documentation

  • Current signed contract (showing day rate, dates, role)
  • Previous 12-24 months of contracts
  • IR35 Status Determination Statement (if applicable)

Company Documents (if Ltd)

  • 2-3 years certified company accounts
  • Latest management accounts
  • Company bank statements (3-6 months)

Personal Documents

  • SA302s (2-3 years)
  • Tax year overviews
  • Personal bank statements (3 months)
  • ID and proof of address

If Using Umbrella

  • 3-6 months umbrella payslips
  • Umbrella employment contract
  • P60 (if available)

Be prepared

Having all documentation ready before applying speeds up the process significantly. Create a digital folder with everything organized — underwriters appreciate well-prepared applications.

Ready to explore your options?

Get matched with lenders who understand IT contractor income and can maximize your borrowing capacity.

Get matched

Frequently asked questions