Santander Contractor Mortgages

Santander are one of the largest mortgage lenders in the UK, with almost 1 in 10 mortgages in the UK being with this bank. This is partly because of the acquisition of Abbey and Alliance & Leicester into this group during the early 2000’s. Abbey previously recognised that contractors were low risk for mortgage funding than most of their competitors assumed and offered bespoke contract-based underwriting as a result.

Unfortunately, these arrangements came to an end when Santander took over, as they wanted to streamline their risk assessment process. Case-by-case bespoke underwriting ceased at this point and they reverted to standard employed and self-employed criteria.

Do I qualify for a Santander mortgage?

A Santander mortgage is quite difficult to qualify for if you cannot prove your income in a conventional manner, i.e. via trading accounts or pay slips. Working on the contract value is not an option. The only slight flexibility that exists for contractors is for those who can provide payslips showing all taxable income, together with a reference from the agency or end client confirming long term renewal prospects.

For those individuals utilising their own limited company, income is verified via trading accounts or an accountant’s reference over the latest two years. Salary and dividends combined are the basis of defining income. A dim view is taken where income has dropped in recent years over previous ones.

Do CMME recommend Santander?

At CMME, we rarely recommend Santander, due to the restrictive approach they have taken to underwriting mortgage funding. While the income multiples adopted by the lender are often generous, their decision to limit income assessment to more traditional methods has meant that Santander do not feature as an option for the majority of our clients.