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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 4th December 2020*

If you’re on a temporary contract, you’re probably used to hearing how difficult it is to get a fixed-term mortgage without an employment contract.

Sure, an unconventional income can impact your choice of lenders and rates but does that mean that getting a mortgage on a fixed term is impossible?

Fortunately not. In fact, more and more people in the UK who earn a less generic income are finding that, with the help of a broker and the right information, getting a mortgage on a fixed-term contract is easier than they thought.

You can contact an expert directly if you have any questions about mortgages on fixed term contracts.

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Can I get a mortgage on a fixed-term work contract?

Getting a mortgage with a fixed-term contract can come with its difficulties and often this can put some prospective homeowners off.

But worries about whether a fixed-term contract will affect your mortgage application shouldn’t stop you from pursuing a purchase.

Speaking to a mortgage broker can help to answer any concerns regarding your deposit size, Loan to value ratio and choice of lenders.

Lots of freelance or temporary workers also share worries about their credit history and the impact that it could have on an already temperamental application.

Whilst it’s true that multiple ‘issues’ on an application can reduce your overall choice of lenders, it may be possible for a trained broker to find you a provider who is happy to lend to you, subject to you passing their eligibility criteria.

Make an enquiry if you have any questions. One of the brokers we work with will be happy to give you free and confidential advice about getting a mortgage on a fixed-term employment contract.

How can I get a mortgage with a fixed-term employment contract?

Some lenders can be cautious when it comes to providing mortgages to borrowers with fixed-term employment contracts as this type of employment is less predictable.

The nature of this employment can leave some lenders with concerns about how a borrower will pay their mortgage in the event that their fixed contract ends and they cannot find additional work.

That being said, there are some things that you could do to limit the risk of a mortgage rejection if you are applying with a fixed-term employment contract.

  • Provide the lender with a history of relevant employment contracts. This will evidence that you have been able to source work consistently.
  • Ensure your accounts are up to date and correct. Errors with your accounts can cause serious delays and could affect the likelihood that you’ll be approved.
  • Present the lender with a copy of the employment contract. Some lenders prefer contacts with minimum employment of six months although this can vary. Lenders tend to require a minimum fixed term contract history, or at least evidence of being employed in the same/similar sector, along with a minimum time remaining on the current contract. All lenders have different rules around this, however. An employment contract can show that your work is stable until the near future and can also provide further evidence of your income.

Top tips before making a fixed-term contract mortgage application

Applying for a mortgage is a huge decision that could affect your future finances, so always ask a professional for their opinion before you proceed.

Follow our top tips below if you’re considering applying for a mortgage when on a fixed-term contract.

Do your research

Navigating your way through hundreds of lenders is time-consuming but it is necessary if you want to find the best deal based on your circumstances. Every lender offers varying terms, conditions and rates and each of these factors could significantly affect your ability to get approval for a fixed-term contract mortgage.

A lot of people simply don’t have the time or the lender knowledge to source and compare numerous lenders but there is an easier way.

In fact, a mortgage broker can do this all for you. The brokers we choose to work with have access to a database with rate tables as well as all of the other relevant lender information. Using this as well as their experience of mortgages, they can quickly determine which lenders are worth your time and which ones it may be best to avoid.

Avoid applying to multiple lenders

If you are looking for a mortgage with a fixed-term employment contract, you might find it a little more difficult to gain approval and so it can be tempting to apply again to another bank or lender.

But that would be a mistake, especially if you were to apply again within a short period of time.

When lenders assess your eligibility for a mortgage, they will look at factors such as your affordability and credit history to determine what kind of borrower you are.

If you have a history of mismanaging money or applying for multiple sources of credit, this can make you a less appealing borrower.

In the event that you are rejected for a mortgage, don’t make a rash decision to apply to another lender – too many hard searches on your credit file could jeopardise future credit applications.

A mortgage broker can assess your situation and advise you on the best steps to take and introduce you to the right lender for the first time.

Can you remortgage on a fixed-term contract?

Your current lender should usually be your first port of call when you are considering remortgaging although working with a broker can help to compare the various other deals that may be available.

This can be especially helpful if your employment status has changed and you are now on a fixed-term work contract.

A change in income can significantly affect your choice of remortgage lenders as some may determine that your type of employment is too risky or that your average income is now lower, low-income mortgages are available but it’s best to speak to a broker who will be able to approach the best lender for your circumstances and affordability.

If you want to remortgage whilst on a fixed-term contract it can be helpful to know that there may be a number of options available based on your circumstances. Before applying to any lender, speak to a broker, be aware of any associated costs and then take the time to carefully consider the pros and cons of each choice.

Can a guarantor help me get a mortgage with a fixed-term contract?

In some cases, it may be beneficial to have a guarantor on your mortgage application, especially if you are finding it difficult to find a lender who will accept your employment status.

That being said, some lenders require the guarantor to afford the whole of the loan, with a select few just requiring the guarantor to afford the shortfall and because of this, many lenders also require that your guarantor is a relative.

To learn more about whether a guarantor could help you get a mortgage whilst on a fixed-term contract, get in touch.  One of our experts will be in touch ASAP but if you require help immediate assistance please call 0808 189 2301.

Can I get a Help to Buy mortgage if I have a fixed-term contract?

There are many variations between the lenders offering mortgages for the government’s Help to Buy mortgage scheme.

As with any mortgage, your affordability will be assessed based on your annual income, the source of the income you earn, your debt to income ratio and your credit history.

It can be a relief to know that your employment type might not necessarily stop you from getting a Help to Buy mortgage as some lenders specialise in providing mortgages for freelancers, mortgages for agency workers or temporary workers.

Make an enquiry to speak with a Help to Buy expert to find out what your next steps could be or see our Help to Buy guide for further details.

Would it be possible to get a fixed-term contract mortgage in Ireland?

Your location, as well as the location of your property, can affect your ability to find a lender who is willing to accept applicants on fixed-term contracts.

In some rural areas where there may be a refined choice of lenders, it can be more tasking to find one that specialises in such a niche area.

The good news is that whether you’re located in England, Ireland, Scotland or Wales, we can put you in touch with a broker with the knowledge and experience needed to find you a good lender.

Which mortgage lenders might accept fixed-term employment contracts?

The appetite to lend to borrowers with fixed-term employment contracts can vary between lenders but working with a broker can help to identify which ones are more likely to approve your mortgage.

The brokers we work with have successfully arranged mortgages for fixed-term contract workers with the following lenders…

  • Halifax
  • Nationwide
  • Barclays
  • HSBC
  • Santander
  • Natwest
  • Coventry
  • First Direct
  • Virgin
  • Lloyds
  • Leeds Building Society
  • Yorkshire Building Society
  • RBS

To discuss any of the above fixed-term mortgage lenders in the UK, make an enquiry with us.

Want help in getting a mortgage on a fixed-term contract?

If you’re still wondering, “Can I get a mortgage if I have a fixed-term contract?” then that’s ok! Mortgages can be a lot to take in and can often leave borrowers with lots of questions.

There are so many factors that could affect your chances of getting a mortgage with a fixed-term contract so for the right advice, speak to an expert.

Call 0808 189 2301 or make an online enquiry and one of the specialists we work with can talk you through the process of a fixed-term mortgage application.

Updated: 4th December 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.