HSBC simplifies limited company remuneration and contractor mortgage policies

by Aaron Strutt

Jan 27 2019

HSBC for Intermediaries has simplified its limited company remuneration and contractor mortgage policies.

HSBC required fixed and short term contractors to have been contracting for a minimum of two years in the same type of employment and with history suggesting their current contract is likely to be renewed.

The policy has been enhanced to include borrowers employed on fixed-term or short-term contracts with 12 months or more continuous service. The will need to have been in the same type of employment, with six months of the contract remaining. To qualify for the mortgage, applicants will need to provide their latest P60 and their last current employment contract plus their latest payslips. 

There have also been improvements for sub-contractors who pay their own tax as they will be treated as self-employed. Their income must be evidenced in line with HSBC's policy for self-employed customers.

For sole traders and partnerships, HSBC typically asks for the average net profit over the last two years. If the latest year is lower than the average, the latest figure will be used. Tax calculations from an online print out from HMRC will be accepted or SA302's - or the computation produced by accountants using accountant systems and submitted to HMRC.

Where there are multiple directors within a business, and the financial accounts do not confirm the distribution of salary to each director, HSBC will request either the last two years P60s or previous two years Tax Calculations and corresponding Tax Year Overviews. This applies to directors of limited companies with a shareholding of more than 10%. 

Aaron Strutt, product director at Trinity Financial, says: “The lenders have been pushing to attract IT workers, consultants and project managers. Our brokers have access to another large bank offering highly competitive fixed rates and an attractive lending policy for contractors whose income is more than £500 per day or £75,000 per annum. Whether they are employed or self employed it accepts the gross value of the contract as evidence of income."

Call Trinity Financial on 020 7016 0790 to secure a contractor mortgage