The IR35 reforms have transformed how contractors work – but many don’t realize these changes also impact mortgage applications. Whether you’re inside or outside IR35, here’s how it affects your borrowing power and what you can do about it.
How IR35 Status Changes Your Mortgage Options
If You’re Outside IR35:
✅ Stronger application – Lenders typically treat you as a "true" contractor, meaning:
Higher multiples (up to 5.5x annualized day rate)
More flexibility with retained profits (if limited company)
Better interest rates from specialist lenders
If You’re Inside IR35:
⚠ Treated like a permanent employee – This can limit your options because:
Lenders may only consider your "deemed salary" (not full contract rate)
Some high-street banks apply stricter affordability checks
You might need a longer contract history to qualify
3 Smart Strategies to Secure a Mortgage (Regardless of IR35 Status)
Use a Specialist Lender
They understand contracting and assess applications differently than high-street banks.
Some even consider a blend of salary + dividends if you’re inside IR35.
Extend Your Contract
A 12+ month contract (even inside IR35) strengthens your case.
Shows stability, which lenders prefer.
Optimize Your Financials
If outside IR35, ensure accounts are up-to-date and clearly show earnings.
If inside IR35, maximize your "deemed payment" to improve affordability.
Common IR35 Mortgage Myths – Debunked
❌ "I can’t get a mortgage if I’m inside IR35."
✅ False – You still qualify, but the process differs.
❌ "My day rate doesn’t matter anymore."
✅ False – Some lenders still factor in future contracts.
❌ "I have to accept worse rates."
✅ False – Specialist lenders offer competitive deals for all contractors.
Need an IR35-Friendly Mortgage?
At Contractor Mortgage Solutions, we’ve helped contractors in all IR35 scenarios secure the right mortgage.
Get a free, no-obligation quote today!
Why This Article Works for Your Site:
✔ Relevant to 2024 – Addresses current IR35 concerns.
✔ Actionable Advice – Gives contractors clear next steps.
✔ Leads to Conversions – Encourages them to contact you for help.
Next Article Idea:
"First-Time Buyer Mortgages for Contractors: A Step-by-Step Guide"
"How to Remortgage as a Contractor and Save Thousands"
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