Your fixed rate is ending. You need to remortgage. For most PAYE borrowers that's a comparison exercise. For limited company contractors it's also a lender selection exercise — and if your day rate has grown since your last mortgage, you may have significantly more options than you think.
Day rates typically increase over a contracting career. If your current lender used salary and dividends from accounts to assess you originally, they may not have captured your real income. A new lender using day rate assessment on your current contract may see a substantially higher income figure — unlocking better rates, higher loan amounts, or both.
When your fixed rate ends, your existing lender will offer you a product transfer. These retention products are competitive to keep you from leaving — but they're rarely the best available rate in the market. A whole-of-market remortgage search almost always produces a better outcome than accepting the first retention offer.
Switching to a new lender on remortgage triggers a full income assessment. If your original lender used salary and dividends and your new lender uses day rate methodology, the change in assessment basis can be material — even if your income hasn't changed, you may now qualify for significantly more.
The right time to start is 6 months before your current fixed rate ends. This is longer than the window most PAYE borrowers use — but for contractors, lender selection and income evidence packaging takes more time, and starting early protects you from rate movements.
Many lenders allow you to secure a rate 3–6 months ahead and complete when your fix ends. If rates rise between now and completion, you're protected. If rates fall further, your broker can review whether switching to a better product before completion makes sense.
Don't wait until the last 6–8 weeks. If you fall onto your lender's standard variable rate while the process is underway, you'll be paying a higher rate unnecessarily — and potentially for longer than you realise, because SVRs can take time to unwind once you're on them.
See our fee structure — standard remortgages are handled at zero broker fee.
Almost certainly higher than when you took your original mortgage. If your new lender assesses on day rate, your increased rate translates directly into a higher income figure and potentially better terms. This is one of the primary reasons to switch lender rather than take a product transfer.
Equity is your property's current value minus your outstanding mortgage. If values have risen or you've made overpayments, your LTV may have improved significantly. A lower LTV bracket unlocks materially better rates — and this improvement compounds with any income assessment uplift.
You now have more contracting history than when you took your first mortgage. This is broadly positive for lender assessment — a longer track record, more contract renewals, and an established professional career are all points in your favour.
More years of trading history are available — which is helpful if a lender does want to see accounts. However, if you move to a lender using pure day rate assessment, accounts may not be required at all, removing one administrative complexity from the process.
Staying with your existing lender and switching to a new rate product. No new affordability assessment, no credit search, no income re-verification. Simple and fast — typically completed within a few days.
The rate offered is competitive enough to retain your business, but usually not the best available in the market.
For contractors: If your original lender used salary and dividends to assess you, a product transfer keeps you on the same cap — you can't increase the loan amount based on a higher day rate. You're locked into the original assessment basis.
Moving to a new lender or taking a new product with your current lender that involves a full affordability review. More work, but almost always a better outcome — particularly for contractors whose income has grown or who were originally assessed incorrectly.
A new lender using day rate assessment sees your current income, not what you were drawing 2–5 years ago. That difference in assessment can unlock a better rate tier or a higher loan amount for capital raising.
Worth checking both, but for contractors: a product transfer with a lender that used salary + dividends originally means you're still capped at that assessment. A remortgage to a day rate lender changes the basis entirely.
Some contractors remortgage not just to secure a better rate, but to release equity — for home improvements, investment, or business purposes.
Day rate assessment applies here exactly as it does for a standard remortgage. If your income has grown since your original mortgage and your new lender assesses on day rate, you may be able to raise more capital than you expect — because the assessment basis produces a higher loan ceiling.
The purpose of capital raising matters to lenders. Home improvements, debt consolidation, and property investment are typically accepted. Business capital injection into a limited company requires more documentation and may reduce the pool of available lenders.
Speak to us before assuming what's possible. The combination of higher day rate, reduced LTV from equity growth, and correct income assessment often produces a more favourable outcome than contractors expect.
Common capital raising purposes for contractors
Home improvements and extensions — widely accepted by lenders. Property investment and buy-to-let deposit — typically accepted with explanation. Day rate assessment applies to the affordability calculation in all cases.
Day Rate Finance will find the best remortgage deal based on your current day rate — not the income figure your original lender used. Start the process 6 months before your fix ends. The earlier you start, the more options you have.