85 Ltv Mortgage Approved For Umbrella Company Contractor

The Clients:

The clients approached us while selling their existing residential property and looking to upsize to a larger family home. The purchase required a high-value mortgage and careful structuring to ensure the borrowing remained affordable over the long term.

One applicant was employed via an umbrella company and operating inside IR35, meaning their income did not fit standard employed or self-employed underwriting. As a result, the case required a lender comfortable assessing non-traditional income structures.

The Challenge:

The primary complexity centred around income assessment and mortgage structure.

Because one applicant was inside IR35 and paid via an umbrella company, many lenders either reduced usable income significantly or declined the application entirely. Correctly evidencing and presenting sustainable earnings was essential to achieving the required borrowing level.

In addition, the clients wished to structure the mortgage on a part-and-part basis, combining interest-only and capital repayment. The overall borrowing was at 85% loan-to-value, and many lenders restrict higher LTV lending where a portion of the loan is interest-only. There were also lender requirements regarding the level of equity that must remain in the property at the end of the mortgage term.

The case therefore required:

• A lender comfortable with umbrella/IR35 income

• Acceptance of high-LTV borrowing

• A part-and-part mortgage structure

• Careful affordability assessment to meet underwriting criteria

The Solution:

Following a detailed review of the applicant’s income documentation and contract structure, we identified a lender experienced in assessing umbrella company earnings and contractor-style employment.

We structured the borrowing across repayment and interest-only elements to balance affordability and long-term equity requirements while still achieving the necessary loan size.

The agreed mortgage facility was:

• Purchase price: £1,400,000

• Loan amount: £1,190,000

• Loan-to-value: 85%

• Interest-only element: £700,000

• Capital repayment element: £490,000

• Term: 20 years

• Interest rate: 4.10%

• Monthly payment: £5,389

The Outcome:

The clients successfully secured their onward purchase and were able to upsize without compromising affordability. By placing the case with a lender that understood umbrella employment and carefully structuring the mortgage on a part-and-part basis, we overcame both the income complexity and the higher LTV restrictions.

 

The final structure provided manageable monthly payments while ensuring a clear path to long-term equity in the property. This case highlights how specialist knowledge of lender criteria can make complex income and higher-value borrowing achievable where standard lending routes may not succeed.