scottish widows offset mortgage

Scottish Widows is a highly regarded lender known for accommodating applications from day rate and hourly rate contractors.

A notable feature of Scottish Widows is their offset mortgage products, an advantageous option for contractors and freelancers. This involves opening a linked savings account, which can be used to reduce either the monthly payment or the mortgage balance, according to your preference.

Scottish Widows is open to considering applications from contractors operating either through their own limited company or a payroll umbrella.

Scottish Widows’ Approach to Day Rate Contractors:

  1. IT Contractors: Scottish Widows has no minimum daily rate for IT contractors. Even if you have a day rate as low as £100, Scottish Widows will consider your application. They are particularly keen on IT contractors and freelancers.
  2. Non-IT Contractors: For non-IT contractors, a minimum day rate of £312.50 is required for Scottish Widows to consider the application under their contractor policy.
  3. First-Time Contractors: Scottish Widows will consider day rate contractors who are on their first contract, provided they have been working in a similar role for the previous two years.
  4. Remaining Contract Duration: The lender requires a minimum of four weeks remaining on your contract. They understand the short-term nature of contracts and do not insist on a lengthy remaining period. For contracts with less than four weeks left, they may ask for an extension or a new contract.
  5. Employment Gaps: Continuous work over the preceding 12 months is preferred, with allowances for holidays or brief breaks. However, extensive gaps may necessitate considering other contractor-friendly lenders.

Calculation of Gross Contract Value by Scottish Widows:

  • Scottish Widows calculates the gross contract value by multiplying the daily rate by five (for a standard working week) and then by 48 weeks.
  • They do not use the average of the previous year to determine the daily rate.

Example Calculations:

  • Day Rate: £350 per day x 5 days x 48 weeks = £84,000 gross contract value.
  • Hourly Rate: £42 per hour x (stipulated or 37.5 hours default) x 48 weeks = £75,600 gross contract value.

Application Requirements:

  • Proof of ID (such as a Passport or DVLA Licence).
  • Proof of Address (such as a Utility Bill and Council Tax Bill).
  • Current Contract with Terms and Conditions, signed and dated.
  • Three months of personal and business bank statements.
  • Lender’s Direct Debit Mandate, Offset Declaration, and Telephone Banking Form.
  • For property purchases, proof of deposit or a gifted deposit letter, with a template provided by us if necessary.

Having all required documents at the outset aids in efficiently presenting your application to Scottish Widows’ contractor mortgages department, ensuring a swift and favourable outcome.

At Mortgage Knight, we specialise in guiding contractors through the mortgage application process. Trust our expertise to provide the professional advice and support your application needs.



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