Helping A High Income Contractor Secure The Right Remortgage

The Client

Our client was a highly skilled inside IR35 day-rate contractor earning £1,000 per day. They were looking to remortgage their £1.4 million home before their existing fixed rate expired and reverted onto the lender's standard variable rate.

With a new contract due to commence within a matter of weeks, the client wanted to secure a competitive deal that reflected their true earning potential.

The Challenge

Despite the client's exceptional income, the case wasn't as straightforward as it first appeared.

The new contract had not yet started and was only for an initial six-month term, making many lenders cautious. To complicate matters further, the client had already been declined elsewhere after a lender assessed their income using the credits showing on their bank statements, rather than the contractual day rate.

The lender annualised the bank statement income using a 5-day week over 46 weeks, which significantly understated the client's actual earning capacity. As is often the case with contractors, the amounts received into the bank did not perfectly align with the contractual day rate due to payment timings and invoicing cycles.

The Solution

Drawing on our experience with contractor lending, we identified a lender whose underwriting approach was far more appropriate for the client's circumstances.

Rather than relying on historic bank statement credits, the lender assessed affordability using the contractual day rate itself, annualising the income over 52 weeks. This provided a far more accurate reflection of the client's ongoing earning potential and removed the issues that had resulted in the previous decline.

By presenting the case correctly and matching the client with a lender that understood contractor income, we were able to secure the funding required.

The Outcome

By matching the client with a lender that understood the complexities of contractor income, we successfully secured a competitive remortgage before their existing deal reverted onto the lender's standard variable rate. Rather than being restricted by an underwriting approach that understated the client's income, the new lender assessed the case on its true merits, delivering a flexible solution that met both the client's affordability needs and future plans.

Lender: Nationwide

Property Value: £1,400,000

Loan Amount: £750,000

Loan-to-Value: 53.6%

Term: 15 years

Product: 2-Year Tracker (No Early Repayment Charges)

Interest Rate: Bank of England Base Rate + 0.19%

Monthly Payment: Approximately £5,525 (based on the prevailing Bank of England Base Rate at completion)

This case highlights AWS Private Finance's expertise in arranging mortgages for contractors. Our in-depth knowledge of lender criteria meant we knew exactly which lender would assess the client's income correctly, despite a previous decline elsewhere. By matching the client with the right lender and presenting the case effectively, we secured a competitive solution that accurately reflected their true affordability and met their long-term objectives.