Published 2026-07-13 · Contractor Mortgage Guide

Limited company (PSC) contractor mortgages: day rate vs dividends

Quick answer: If you run your own limited company — a personal service company, or PSC — you're not automatically treated as a contractor for mortgage purposes, even if that's exactly what you are. Lenders split into two camps. Some will annualise your day rate directly, the same way they would for an umbrella contractor, largely ignoring how little salary and dividends you actually draw from the company. Others treat you as a standard self-employed applicant: two years of company accounts, assessed on your salary plus dividends (or sometimes salary plus retained/net profit) — a figure that, for most contractors who leave money in the business rather than drawing it all out, is far lower than your day rate would suggest. Which route your chosen lender takes is the single biggest factor in how much you can borrow.

The PSC dilemma, in one example

Most limited-company contractors are deliberately tax-efficient: draw a modest salary, take dividends, and leave some profit in the company rather than extracting everything as income. That's sensible tax planning. It's also exactly the behaviour that self-employed-style mortgage underwriting punishes, because a lender assessing two years' accounts is looking at what you drew, not what your day rate was capable of producing.

A day-rate lender sidesteps that problem entirely — it looks at your contract rate, not your dividend voucher, and annualises from there using the same mechanics covered in our day-rate annualisation explainer: day rate × days worked × a fixed weeks-per-year figure. For a PSC contractor who pays themselves modestly, the difference between the two routes at the same lender can be the difference between qualifying for the mortgage you want and not.

Lenders that will day-rate a limited-company contractor

Two lenders on the panel have clearly documented PSC day-rate routes:

• Barclays offers a day-rate route specifically for sole-director PSC contractors: you need to be earning at least £218 a day, have no employees, and the route is capped at 90% LTV. Outside those conditions — multiple directors, employees on the payroll, or a lower day rate — Barclays doesn't extend the same treatment.
• Skipton will annualise a limited-company contractor's day rate where the applicant is the sole shareholder or a spouse is the only other shareholder. It pro-rates the calculation for gaps in contract history longer than four weeks, and wants 12 months of contracting history plus two years' relevant experience.

A handful of other lenders also extend day-rate treatment to limited-company directors, with their own conditions: Halifax will day-rate a single PSC contract, but pushes you toward its self-employed route if you pay your own tax directly, run multiple concurrent contracts, or employ others through the company. NatWest offers its day-rate tier to high-income limited-company contractors, gated at the same roughly £75,000-a-year threshold that applies to its umbrella route. Virgin Money will day-rate a sole contractor operating a single contract through their limited company, up to 95% LTV. Accord includes limited-company contractors in its day-rate policy alongside umbrella and fixed-term applicants, though its published criteria carry a minor conflict over minimum contract history (some pages say six months, others twelve) worth confirming directly with the lender before you rely on it.

Lenders that route PSC contractors to self-employed underwriting

This is the half of the picture that's easy to miss if you only read a lender's headline "contractor-friendly" marketing:

• Nationwide does not day-rate limited-company directors at all. Its 52-week day-rate multiplier — the most generous weeks-per-year figure on the panel — is reserved for umbrella and fixed-term contractors specifically. A PSC contractor applying to Nationwide is assessed as standard self-employed, on two years' company accounts.
• Coventry Building Society will day-rate a limited-company contractor, but only if you clear its conditions — a minimum £50,000 income and either six months left on your current contract or 24 months in the same profession. Fall short of those, and Coventry doesn't decline you outright; it simply falls back to assessing you as a standard self-employed applicant instead, on accounts rather than day rate.
• Metro Bank routes limited-company directors to its standard self-employed underwriting rather than a day-rate calculation, even though it does offer day-rate treatment to umbrella and fixed-term contractors.
• Santander doesn't operate a day-rate route for any contractor structure. Limited-company directors are assessed as self-employed on two years' evidenced income, up to 90% LTV — worth knowing before you assume Santander will look at your day rate at all.

A few lenders' treatment of limited-company contractors isn't clearly documented either way in their published criteria — Clydesdale, Leeds Building Society and Kensington all accept contractor income in some form, but their public criteria don't spell out the limited-company-director position as explicitly as the lenders above. Treat those as ones to confirm directly rather than assume either way.

Why the self-employed route usually produces a lower figure

When a lender assesses you as self-employed, it's typically working from either salary plus dividends, or salary plus the company's net (retained) profit, averaged — or sometimes the lower of — the last two years. For a contractor who has been sensible about not stripping the company of every pound of profit, or who has only recently pushed their day rate up, both of those figures usually land well below what a day-rate annualisation would produce. It isn't that the self-employed route is being unfair — it's answering a genuinely different question ("what has this business historically paid you") rather than "what is this person currently capable of earning."

What to do with this

Before you apply, it's worth finding out — for the specific lender you're considering — whether limited-company contractor income gets the day-rate treatment or the self-employed treatment, and whether you meet whichever route's conditions (shareholding structure, contract history, minimum day rate or income). Our lender criteria tables carry the day-rate, umbrella and limited-company-director treatment for each lender on the panel, including the lenders above that route PSC applicants to self-employed underwriting. The day-rate calculator applies each day-rate lender's published gates and multiplier to your actual rate, and our affordability check gives a wider read on borrowing potential once you know which figure a lender is likely to use.

Criteria verified against published lender intermediary sources on 13 July 2026; lender policies, gates and figures change, and some items above — Clydesdale, Leeds Building Society and Kensington's limited-company-director treatment in particular — aren't fully confirmed in published criteria and are flagged as such. Confirm the current position directly with the lender or a whole-of-market broker before applying. Information, not advice.