NatWest updates mortgage criteria for high earning contractors

by Aaron Strutt

Dec 07 2016

NatWest for Intermediaries has changed the way it assesses self-employed contractors earning more than £75,000 each year.

The bank will calculate the maximum mortgage loan size using the average weekly contract income multiplied by 46; previously it used salary and dividends and preferred limited companies to have been trading for more than two years.

NatWest is offering a range of highly competitive fixed rate mortgage. To qualify, borrowers need to demonstrate they have received or will receive sufficient income for one or more contract over a 12 month period that incorporates the date of application.

They will also need to provide their latest three months consecutive personal bank statements, and prove they have not had more than a six-week break between contracts in the 12-month period.

Aaron Strutt, product director at Trinity Financial, says: “More of the mortgage lenders are providing contractor mortgages and we are helping more IT and banking contractors.

“Employment patterns have changed over the last few years and more worked are switching from PAYE to contractors.”

Committed expenditure

NatWest’s mortgage underwriters may want to know about contractors committed expenditure, such as professional fees and expenses relating to their role that will need to be covered on an annual basis.

These may include but are not limited to costs such as indemnities, subscriptions, professional memberships and training expenses to complete their duties. Extended travel and accommodation costs that are not reimbursed via a contract should also be seen as an expense.” 

For help to secure a contractor mortgage, call Trinity Financial on 020 7016 0790.