Fixed-term Contract Mortgages
Getting a Mortgage if you work fixed-term is possible. Get matched to specialist broker who can help you
Firstly, are you currently working on a fixed-term contract?
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Working outside of a permanent contract doesn’t have to be a barrier to getting a mortgage. Here we explain how to go about applying for a mortgage when on a fixed-term contract, which lenders accept applications from such workers and where to go for expert advice.
Can you get a mortgage on a fixed-term contract?
Yes. A fixed-term contract may not be as reassuring to lenders as a permanent contract, but as long as you meet other criteria and apply to the right lenders, a mortgage should be possible to obtain. In fact, your contract type is just one of many factors lenders consider as part of your application. What matters is that you can prove that, regardless of your length and stability of contract, you’ll be able to repay a mortgage each month.
Working with the right mortgage broker would help you to submit a stronger application and increase your chances of approval.
Speak to a fixed-term contract expert
Maximise your chance of approval with a dedicated specialist broker
How to get a mortgage on a fixed-term contract
The first thing to do is find a mortgage broker who specialises in arranging mortgages for people on similar contracts as this will boost your chances of approval and landing a favourable rate.
Make an enquiry with us to access our free matching service and be paired with a specialist advisor.
They will then guide you through the following steps to full application:
- Download and optimise your credit records. You can do this right now by signing up for a free credit report trial, and your broker will help you identify any inaccuracies or out of date information held on your reports, reducing the risk of being rejected.
- Collect all the necessary paperwork and documentary evidence. With this kind of application, it’s key to show that regardless of being on a fixed-term contract you’re not going to be too high a risk. Extra documentation could help in this regard; think of previous relevant employment contracts in the same field, up-to-date accounts – including your SA302 tax return forms – and a copy of your current employment contract which would ideally have a significant amount of time left.
- Submit the application to the right lender. That means a lender who is right for you, is open to applications from temporary workers and likely to offer you the best deal. This is something a broker would be able to help with, tapping into their unique database of both high street and specialist lenders, some of which only work with brokers.
Why is it more difficult?
A lender likes to know you’ll be able to meet your mortgage repayments. Having long-term employment assures them that’s likely to happen. A shorter working contract raises the question of how you’ll pay once the contract ends. With this in mind, the longer you’ve been on fixed-term contracts, and the fewer employment gaps you have, the better the deal you’re likely to find.
What if your contract only runs for 12 months?
You can still potentially get a mortgage. This is a common fixed-term contract length and many lenders are open to applicants on this type of contract. Applying for a mortgage prior to the six-month mark could help as some mortgage providers will only lend if there are at least six months remaining on your contract.
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How much can you borrow?
There’s no clear answer to this question as lenders will base how much they think you can afford on their own internal criteria. It’s common for lenders to multiply an applicant’s yearly income by 4.5 or even beyond 5 times a salary. To do that with those on a fixed-term contract, they’ll likely assess your current, historic earnings and potential future earnings. With this in mind, a strong employment record and evidence of consistent earnings will help.
Other questions they’ll ask to determine what kind of income multiple and deal you might qualify for are…
- How long is left on your current contract?
- Do you have any gaps in your employment history?
- How many similar contracts have you had before?
- How likely is it that you’ll get a similar contract when the current one ends?
Calculate your maximum borrowing
To get an indication of what kind of mortgage size might be available to you, use our contractor mortgage calculator. It allows you to specify your employment type and then insert either your wage or day rate to give an estimate of what the majority of lenders are likely to offer.
Mortgage Affordability Calculator
Our mortgage calculator will tell you how much you can borrow, whether you work in an employed or self-employed capacity. Select your trading style below, enter the relevant details about your income and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on a multiple of 3-4.5 times your income, a standard calculation used by the majority of UK mortgage lenders. You should speak to a mortgage broker for bespoke calculations if you have been contracting for less than 12 months, your contract is coming to an end, or there is uncertainty around your long-term employment.
This is based on a multiple of 3-4.5 times your income, a standard calculation used by the majority of UK mortgage lenders. You should speak to a broker for bespoke calculations if you’ve been self-employed for less than 2-3 years, have declining profits or fluctuating income.
Some lenders would consider letting you borrow
This is based on 5 times your income, a calculation only some lenders are willing to offer. You may struggle to find a lender who will offer this income multiple to an employed contractor without the help of a broker, and you should seek advice from one regardless if there is any uncertainty around your employment situation.
This is based on 5 times your income, a calculation only some lenders offer. You might need a broker to access this salary multiple and should take advice from one regardless if you’ve been self-employed for less than 2-3 years, have declining profits or fluctuating income.
A minority of lenders would consider letting you borrow
Only a small number of options are available for employed contractors who want to borrow based on this salary multiple. Few UK mortgage lenders offer mortgages based on x6 income under any circumstances, and you’ll almost certainly need the help of a specialist mortgage broker who knows this corner of the market inside out to access them.
Only a small number of options are available for self-employed contractors who want to borrow based on this salary multiple, as few mortgage providers are willing to offer 6 times salary deals. You’ll almost certainly need the help of a mortgage broker to borrow this amount.
Get Started with an expert broker to find out exactly how much you could borrow.
You can then consult a broker who’ll be able to take more than just numbers into the equation – think your credit history and deposit – to provide a more accurate estimation.
Very helpful for contract workers
They were the only ones out there who seemed to be interested in our particular mortgage need - we're both on short term contracts. Ashley, the advisor assigned to us, was invaluable in finding what we needed and guiding us through the process.
We can't believe how easy all this was…
We can't believe how easy all this was no pressure, no jargon, nice and simple, and just a phone call away. Every think was broken down. Omar was made call when needed. Everything was done by email too. And documents needed or information was easy. It was stressed free and friendly for us.
Gail Toni Marnell
My partner and I were both in temporary agency work with no contract and thought it would be impossible to get a mortgage as we were unable to obtain a mortgage through a 'normal' lender. I am so grateful for Online Mortgage Advisor for providing this service.
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Aside from your contract type, lenders will also be considering:
- Your type of work: Some professions carry more weight with a lender such as teachers, doctors, and lawyers; all of which sometimes operate on fixed-term contracts.
- Your deposit: Having a bigger deposit and a lower loan to value (LTV) ratio reduces some of the risks for a lender.
- Your credit history: A good credit history can show that you’re likely to be a reliable borrower. Should you have bad credit, talk to your broker about ways to remedy this and which lenders will still consider your application.
- Any debt you have: Lenders have different assessments for what level and type of debt they’ll accept from an applicant. A broker would be able to share whether any debt you have is likely to be an issue.
- Your age: Some lenders won’t offer mortgages to those over 75 or edging closer to retirement. Being below that threshold will count in your favour.
- The type of property you want to buy: The less risky the property, the more chance of approval. Risky properties include those that are non-standard and perhaps built of more unique materials such as timber or concrete.
Which mortgage lenders will accept fixed-term contracts?
Many of the biggest high street banks and building societies are open to applicants with fixed-term contracts, however, each will have different criteria around that that must be met. Nationwide, for example, requires an applicant to have no gaps between contracts in the past 12 months, TSB stipulates there must be at least 3 months left on the current contract and Halifax will accept applications from people on their first fixed-term contract as long as they have at least a 2 year history of doing the same kind of work.
A mortgage broker would be familiar with each lender’s criteria and advise on which might be best for you
There are also more specialist lenders they would have a direct link to and that might be offering different rates and mortgage terms.
Get matched with a mortgage broker
Rather than applying blindly to any lender, you’re more likely to get a better deal by working with a broker who specialises in borrowers with fixed-term work contracts. They’ll know which of the lenders in the market is currently offering the most favourable rates, which, if any, have extra stipulations as part of their assessment criteria that you’d have to meet and how to navigate the application process for each. They can also tap into their database of lenders, finding you options that wouldn’t be open to you if you were to apply alone.
Our broker matching services will see you swiftly connected to an expert in the field for a free first-time consultation on getting a mortgage with a fixed-term contract. Just call 0808 189 2301 or fill out our enquiry form to get started.
Speak to a fixed-term contract expert
Maximise your chance of approval with a dedicated specialist broker
Yes, it’s still possible to get a mortgage with a new job. Having previous employment contracts and significant time left on your new contract, if it’s fixed-term rather than permanent, would support your application.
The pool of lenders open to you may be smaller – many stipulate that there be at least six months left – but it is possible if you meet other criteria. This is especially so if you have a track record of similar and continuous employment.
Whether you’ve always been on this contract type or have recently transitioned, remortgaging could be an option but the first step would be to talk to your current lender about what’s possible. From there, a broker would be able to share whether you’d be likely to find a better deal with a new lender by comparing the market. If your income has significantly changed with the contract this could limit the number of lenders you could remortgage with.
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