NHS Mortgages

NHS Mortgage

Diarmuid Phoenix talks us through the mortgage process for NHS workers.
The information contained within was correct at the time of publication but is subject to change 30.04.2024.

What is an NHS mortgage and how does it work?

Just to avoid any confusion, there’s no such thing as an NHS mortgage specifically. But there are options available to mortgage brokers like ourselves that we can tailor towards key workers like NHS staff.

Some lenders might offer special rates for key workers including NHS employees, police and emergency services.

Can you explain the mortgage application process for NHS workers?

It’s not that different from the mortgage process for any other employed person. Lenders would still require documentation, and applicants still go through similar underwriting processes.

It’s initially about affordability checks, then conveyancing and then ultimately signing contracts. It’s essentially the normal mortgage application process.

What documentation do I need to provide for a mortgage as an NHS worker?

This is where it may slightly differ. It all also depends on what type of contract of employment the applicant has.

With healthcare workers and other key workers, employment contracts can differ quite significantly. If you’re on a permanent contract, it’ll be the traditional three months’ payslips and three months bank statements that we would ask for, plus proof of deposit.

Some lenders ask for less, but as a matter of course we always ask for three to cover our own due diligence. We also need proof of deposit.

Lenders will ask for your contract of employment if you haven’t been in the job for a particularly long time. For those who aren’t on permanent contracts, and are perhaps on a zero hour contract, there will be a much smaller pool of lenders to choose from.

They might require the applicant to have been in their position for at least 12 months and require a full year of months’ payslips and bank statements.

 

How can I find a lender that offers a mortgage as someone who works for the NHS?

We’re well up to date with the criteria for each lender, so we know which ones to look at initially when someone enquires. People have varying needs and circumstances and obviously we do this day in, day out.

We can cut out a lot of time compared to doing your own research. Speak to a mortgage broker, because we know exactly where to look.

What are the typical interest rates and loan terms on a mortgage for someone who works for the NHS?

Interest rates change all the time, and particularly in this economic climate where rates have been cut so far this year, and all of a sudden they’re starting to wind back up again [podcast recorded in April 2024].

But certain lenders offer incentives and discounts for key workers. Again, speak to a mortgage broker on that one – I’ll be able to give you up to date information on that.

Also, most key workers work in the public sector and can provide evidence of a pension. That means more flexibility around longer mortgage terms that extend into retirement.

Self-employed people, for example, who are paying into a private pension can’t borrow past state retirement age – they’re restricted that way. But most public sector workers have a good pension which means some lenders may lend to them into their 70s and beyond. That can keep your monthly payments down, and it’s a key difference for those types of workers.

Can I use a mortgage to buy a property jointly with someone else as an NHS worker?

Yes, that’s fine. The other applicant will obviously have to go through the normal lending criteria for their employment type.

That criteria might be different to that of the key worker, but it shouldn’t prevent you from securing a mortgage provided both applicants meet all of the relevant requirements.

What happens if I am no longer employed by the NHS after obtaining a mortgage?

Like any mortgage, the application is underwritten using your employment status at the time of the application. If you change jobs, it’s important that your lender is made aware, especially when you’re making changes to your mortgage at a later stage – perhaps switching lenders when you come to the end of your product.

Also, if you’re aware of any pending changes to your employment status prior to the completion of your mortgage, you have to disclose that to the lender. They have to make an informed decision based on any changes.

But for the most part, none of us can predict what’s going to happen in the future. If you have no knowledge of any changes to your immediate employment status, your mortgage will remain in place until the end of the product.

After that, your mortgage advisor will assess all your circumstances and make the appropriate recommendations at that time.

Can I port my mortgage if I need to move to a different property as an NHS worker?

It will depend on the lender’s criteria. Most will allow that – there shouldn’t be any restrictions specifically for key workers.
Are there any additional fees or charges associated with a mortgage as someone who works for the NHS?
No, there are no particular additional fees or charges outside what is normal for any other type of employment.

There can be proverbial hoops to jump through depending on your role or contract type. As we mentioned earlier, on zero hour contracts you’re going to have to dig a bit deeper and get more payslips in place. That can sometimes be frustrating for some people, but there are no extra costs.

What happens if I’m unable to make my mortgage payments as an NHS worker?

Certain lenders might take a more sympathetic view with key workers, and particularly ones that are not on permanent contracts. Lenders are supposed to try to do their best for any borrower who can’t keep up their payments, and help them as much as possible if they get into financial difficulty.

I would urge anyone to talk to their lender and broker as soon as they run into any of these issues. They can put measures in place to make things a little bit easier for borrowers, and that includes key workers.

Can I get a Buy to Let mortgage as an NHS worker?

The criteria would be much the same as for any other type of buyer, including a minimum 25% deposit.

One of the more flexible things, particularly for key workers who might be on a low income, is that most lenders calculate the affordability for Buy to Lets using rental yield. Some do have a minimum income of perhaps £25,000, but there are lenders out there such as BM Solutions and Bank of Ireland that don’t set a minimum income.

You might be a part-time worker on a lower income, but if you’ve got the deposit saved up and the property meets the rental calculations, there’s no reason why you shouldn’t get a Buy to Let mortgage as a key worker.

What if I have bad credit? Will this affect somebody getting a mortgage if they’re working for the NHS?

Yes – no matter what your employment status is, bad credit is going to affect whether you will be accepted by a lender. It will certainly restrict the number of lenders that will consider you.

So speak to your mortgage broker beforehand and save pain and time. We’ll be able to give you guidance on how to improve your credit file and get yourself into a better position as quickly as possible.

There could be certain things on your credit file, such as defaults, that might disappear from your record soon. There are ways and means to boost your score if that’s the issue. We’ll share some guidance on what to do in that situation.

How do I apply for a mortgage as an NHS worker?

Brokers can help. We know our way around the mortgage market and have many years’ experience. We can assess your affordability and identify lenders based on your needs, your employment status and your circumstances. Plus, we’re there to provide advice and assistance through the entire journey of the mortgage process.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.