mortgageUmbrella SolutionSeptember 10, 2023Getting a Mortgage in an Umbrella Company: An In-Depth Guide

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In today’s ever-evolving job market, non-traditional employment structures such as freelancing, contracting, and umbrella companies are becoming the norm rather than the exception. But what does this mean for essential financial milestones like securing a mortgage? Navigating this landscape can be complex, but you’re in good hands.

At PamGro, we specialize in understanding the intricacies of the payroll market, including how umbrella companies function. In this in-depth guide, we’ll delve into everything you need to know about getting a mortgage when employed through an umbrella company.

At PamGro, We understand the specific challenges associated with umbrella company employment and can provide personalised guidance, from accurate tax calculations to streamlining your payslips and financial statements, making your mortgage application process a smoother ride.

The Role of an Umbrella Company

An umbrella company essentially acts as an intermediary between the contractor and their clients or recruitment agencies. By doing so, the umbrella company takes on the responsibility of handling taxes, National Insurance, and administrative tasks. You receive a net salary, similar to what you’d get as a regular employee, but with the flexibility of a contractor.

Related: How Umbrella Companies Simplify Global Payroll Operations?

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What Is An Umbrella Company Mortgage?

These mortgages are mortgages which are geared specifically toward workers working in umbrellas and can also serve as agency workers or contractors. Each bank has its own criteria for the income it wants and they also know the way to estimate if your mortgage is going to be approved.

Earnings may be complicated, due in part to your umbrella companies’ compensation. Some of those clients receive basic pay rates and then extra wages that add to the revenue.

What are the documents required for an umbrella contractor mortgage?

  • Payslips: Regular payslips can be your strongest asset when applying for a mortgage. These serve as proof of a stable income, and the more history of monthly payment you can show a lender, the better. Lenders will often ask for 3 to 12 months’ worth of recent payslips.
  • Contracts and Invoices: A long-term contract can serve as evidence of job security, making you a more attractive borrower. Additionally, presenting invoices can back up your earnings claims for potential borrowing.
  • Bank Statements: 2 to 3 years of bank statements can offer a comprehensive look at your financial habits, displaying consistency in earnings and responsible financial behavior.
  • Tax returns from the previous three years
  • Proof of identity and address


  • Speak to a Specialist Mortgage Broker

This can’t be emphasized enough. Specialist brokers understand the unique challenges contractors face and can guide you through the lender’s requirements.

  • Deposits

A substantial deposit, ideally 20% or more of the property’s value, can make a significant difference in how a lender views the value of your application.

  • Improve Your Credit Score

A stellar credit score can offset many of the perceived risks associated with umbrella company contractors. It can also qualify you for better interest rates.

  • Timing Matters

The state of your current contracts and work history may have an impact on credit rating and your chances of approval. Lenders prefer borrowers who have a steady work history and ongoing contracts.

  • Multiple Income Streams

If you have more than monthly payment from one contract or additional income streams, document them thoroughly. The more income you can prove, the less risky you appear to lenders.

  • Transparency 

Sometimes, lenders may ask for personal details or additional proof of your professional reputation. In some cases, client testimonials and personal details can provide extra assurance of your professional credibility and stability.

Long-term Planning: The Umbrella Company Advantage

One overlooked advantage of working through an umbrella company is the financial discipline it can instill. Since taxes and National Insurance are deducted before you receive your pay, it encourages a disciplined approach to finances, helping you with long-term financial planning. This can be especially useful when saving for a large deposit or paying down debts to improve your credit score.

Benefits of Getting a Mortgage as an Umbrella Company Contractor

While the process of securing a mortgage through an umbrella company may initially seem complex, it does come with distinct advantages that are worth considering. Let’s delve into some of these benefits in greater detail.

Simplified Tax Documentation

One of the most significant advantages of working through an umbrella company is being classified as an employee for tax purposes. This is a game-changer when applying for a mortgage. Unlike self-employed individuals, who have to navigate the labyrinthine process of providing tax return evidence, P60s, SA302 forms, and business accounts, you only need to furnish payslips and perhaps a work contract.

This not only streamlines the application process but also reduces the administrative burden, allowing you to focus on other aspects of the mortgage application, such as scouting for the best interest rates or finding your dream home.

Acceptance by Mainstream Lenders

Many self-employed individuals find that their mortgage options are limited to specialty lenders, who often charge higher interest rates. The situation with mortgages is different for umbrella company contractors.

Mainstream lenders, such as HSBC, Halifax, and Barclays, are generally more willing to consider your application when you’re employed through an umbrella company. These banks have a broader risk appetite and established frameworks for dealing with such applicants, providing you with the chance to tap into competitive rates and beneficial mortgage terms.

Potential for Higher Borrowing

One of the less obvious but highly impactful benefits is the potential to borrow more than you would be able to if you were classified as self-employed.

Traditional self-employed mortgage assessments often focus on profit after expenses and taxes paid, which can reduce the income figure that the lenders use to calculate your borrowing limit.

In contrast, umbrella company contractors are assessed based on their gross income. Your earning potential, therefore, appears more substantial, giving you leeway to borrow more money.

Drawbacks of an Umbrella Company Mortgage

Traditional mortgage lenders often hesitate to consider the earnings of umbrella company contractors as proof of stable income. This reluctance stems from the irregularity inherent in contractor pay, leading many prominent lenders to shy away from extending mortgage offers to this demographic.

When seeking an umbrella company mortgage, contractors often face the dilemma of choosing between specialist providers. Some lenders may prefer contractors tied to a single umbrella company, while others may welcome those employed by multiple entities. Navigating this selection process requires careful consideration and may necessitate assistance from a mortgage broker.

Compared to salaried employees, umbrella company contractors encounter a significantly smaller pool of lenders willing to entertain their mortgage applications. Factors such as working for multiple firms simultaneously or having a less-than-perfect credit history further shrink the already limited options available.

How PamGro Can Help?

At PamGro, we offer comprehensive payroll solutions and services designed to simplify your financial life. We understand the specific challenges associated with umbrella company employment and can provide personalised guidance, from accurate tax calculations to streamlining your payslips and financial statements, making your mortgage application process a smoother ride.

Securing a mortgage as an umbrella company contractor can be complex, but it’s far from impossible. By understanding your unique employment structure and preparing accordingly, you can not only secure a mortgage but also avail yourself of competitive rates.

Whether you’re just starting on your contracting journey with right lender or are a seasoned professional, understanding how lenders view your situation can empower you to make informed decisions.

At PamGro, we are committed to demystifying the complexities of the payroll market. If you have any questions or need more personalized advice, feel free to reach out to us.


Can I get a mortgage if I work for an umbrella company?

Yeah. It’s possible. Umbrella company loan programs cater for the employment of contract employees, agencies and professionals in such a company structure. The loans are relatively specific and it’s vital to work with an independent broker.

How does umbrella payment work?

Umbrella businesses use employees on fixed term assignment jobs. They are intermediaries between you the contractor and the end client. Your agency pays umbrella companies that then pay you contract workers by PAYE like full-time employees.

How do umbrella companies avoid IR35?

No umbrella firms are contractors’ employers, therefore contractors are employees. IR35 is not intended to cover self-employed contractor workers working directly with specialized contracting services. Because of their employment, there’s nothing on the IR35 agenda.

What are the eligibility criteria for an umbrella mortgage?

Eligibility criteria for an umbrella mortgage typically include:

  1. Stable income through an umbrella company or self-employment.
  2. Satisfactory credit history.
  3. Ability to afford mortgage repayments.
  4. Documentation such as bank statements, tax returns, and proof of identity.
  5. Minimum deposit requirements.
  6. Consideration of specialist lenders who understand the unique needs of contractors.

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