Bank of Ireland is known for its contractor-friendly approach, readily accepting and considering applications from both day rate and hourly rate contractors.
Whether you’re a contractor operating through your own limited company or via a payroll umbrella, Bank of Ireland will assess and consider your application.
Bank of Ireland’s Guidelines for Day Rate Contractors:
- Minimum Gross Contract Value: Bank of Ireland requires a minimum gross contract value of £50,000 for contractor applications. This is equivalent to a daily rate of £193 or an hourly rate of £25.65, based on a standard 37.5-hour week.
- Contracting History: Applicants need to have at least 12 months of contracting experience. Bank of Ireland requires proof of this one-year minimum contracting period.
- Remaining Contract Duration: The bank expects to see a remaining contract duration of at least four weeks. Understanding the short-term nature of contracts, Bank of Ireland does not insist on a longer duration. However, for contracts with less than four weeks remaining, they may request evidence of an extension or a new contract.
- Continuous Employment: Bank of Ireland prefers a continuous work history over the previous 12 months. Short breaks, like holidays, are acceptable, but extended gaps may necessitate exploring other contractor-friendly lenders.
- Shareholding Consideration: The bank takes into account the applicant’s relevant shareholding in a limited company when calculating gross contract value.
- Gross Contract Value Calculation: To determine gross contract value, Bank of Ireland multiplies the daily rate by five (for a working week) and then by 52 weeks, using 80% of this value for affordability assessments. They do not use the previous year’s average for daily rate calculations.Example Calculations:
- Daily Rate: £193 x 5 days x 52 weeks = £50,180 (80% of this value used for affordability).
- Hourly Rate: £25.65 x (stipulated or 37.5 hours default) x 52 weeks = £50,017.50.
Required Documentation for Application:
- Proof of ID (e.g., Passport or DVLA Licence).
- Two proofs of address (Utility Bill and Council Tax Bill).
- Current contract with terms and conditions (signed and dated).
- Previous contract to evidence a 12-month contracting history.
- An up-to-date CV demonstrating a strong work record.
- Three months of personal and business bank statements.
Providing all necessary documentation upfront facilitates a smooth application process and enables Bank of Ireland’s underwriters to make a prompt and favourable decision.
For property purchases, proof of deposit or a gifted deposit letter is required. We will provide the template for the letter if needed.
Bank of Ireland Contractor Mortgages
Contractor mortgages cater to those with variable incomes from day rate or hourly work, providing the flexibility that standard home loans lack.
Bank of Ireland is noted for its contractor-friendly mortgages, carefully considering applications from individuals whether they operate under limited companies or payroll umbrellas. This considerate assessment simplifies the process of securing financing that matches the contractor’s professional situation.
What Sets Bank of Ireland’s Contractor Criteria
Bank of Ireland has established specific criteria for day rate and hourly rate contractors seeking mortgages, ensuring clarity and consistency in how applications are assessed.
Key Eligibility and Assessment Criteria:
Minimum Gross Contract Value
Applicants must have a contract with a minimum value of £50,000, equating to a daily rate of £193 or an hourly rate of £25.65 over a standard 37.5-hour week.
Contracting History
A minimum of 12 months contracting experience is required, with necessary documentation to prove this duration.
Remaining Contract Duration
At least four weeks of remaining contract duration is expected, with flexibility shown towards the contract’s short-term nature.
Continuous Employment
A consistent work history over the last 12 months is preferred, though short breaks like holidays are permitted.
Shareholding Consideration
The applicant’s shareholding in any limited company is considered when calculating the gross contract value.
Understanding the Bank’s Approach
Bank of Ireland’s approach to contractor mortgages is designed to accommodate the unique financial profiles of contractors. By setting clear guidelines, the bank ensures that the mortgage process is as straightforward and accessible as possible for contractors.
How Does Bank of Ireland Calculate Contractor Mortgage Affordability?
Bank of Ireland utilises a specific formula to assess mortgage eligibility for contractors, considering either day rates or hourly wages, which reflects the flexible earnings typically associated with contract employment.
Calculating Gross Contract Value
Day Rate Calculation
Your daily rate is multiplied by five and then by 52 weeks, with 80% of this total used to evaluate your mortgage affordability. For instance, a daily rate of £193 leads to a gross contract value of £50,180, of which 80% is considered.
Hourly Rate Calculation
Hourly wages are calculated by multiplying £25.65 by your weekly hours (either the standard 37.5 or as stipulated), and then by 52 weeks to determine your affordability.
Required Documentation for a Streamlined Application Process
Gathering the correct documents is vital for a streamlined mortgage application with the Bank of Ireland, helping ensure a quick approval process.
Required Documents:
Valid ID (e.g., Passport, DVLA Licence)
Two proofs of address (Utility Bill, Council Tax Bill)
Signed and dated current contract
Previous contract for 12-month history
Up-to-date CV demonstrating work record
Three months’ personal and business bank statements
This clear and concise approach allows the Bank of Ireland to efficiently process contractor mortgage applications, accommodating the unique financial profiles of contractors.
How Mortgage Knight Facilitates Bank of Ireland Contractor Mortgages
Mortgage Knight simplifies the application process for Bank of Ireland contractor mortgages, making it easier for contractors to proceed. They understand the unique aspects of contractor income, effectively managing applications to meet Bank of Ireland’s requirements.
Their support includes personalized guidance and committed assistance, helping contractors access competitive mortgage rates. Through collaboration with Bank of Ireland, Mortgage Knight effectively connects contractors’ specialized needs with conventional mortgage solutions.
