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Mortgages for People on Zero-Hour Contracts

See how expert advice can help secure a mortgage whilst on a zero hour contract

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 9, 2021

Getting a mortgage on a zero-hour contract isn’t always easy, but we’re here to help. We work with a network of expert mortgage brokers who specialise in customers with complex income, and they’ve helped countless people get on the property ladder under these exact circumstances.

In our guide to zero-hour contract mortgages, you’ll learn how mortgage lenders assess this income type, what your chances of getting a mortgage with it are, and where to find the advice you need.

Can you get a mortgage on a zero-hour contract?

Yes! Getting a mortgage on a zero-hour contract can be tricky depending on your situation, as many mortgage lenders require more stable income to approve applications. But the good news is that every lender is different in who they do and don’t approve for a mortgage, and there are lenders happy to lend to people on zero-hours contracts.

These lenders can be difficult to find, and this means the chances of rejection or an unfavourable interest rate are high – but there’s a quick and easy way to tip the odds of mortgage success in your favour: speak to a mortgage broker who specialises in people with complex income. They know exactly which lenders offer mortgages to zero-hour contract workers, and they can boost your chances of getting the best deal available,

How mortgage lenders view zero-hour contracts

People who work these contracts may be looked upon less favourably by mortgage lenders compared to someone on a permanent contract, as there’s no guaranteed income. This could mean you’re considered higher risk and potentially more likely to miss mortgage payments in future.

This means that some mortgage providers might not lend to you at all, while others may only offer you a higher interest rate and expect you to put down extra deposit.

What are the key criteria mortgage lenders will look at?

Mortgage lenders will decide whether to consider you for finance based on their general eligibility criteria, along with the factors below related to your employment…

  • How long you’ve been in your current contract for:
    Most lenders require a minimum of 12 months working in the current position for most employment sectors.
  • Your experience prior to your current contract:
    If you have been working in your industry for a long time, there may be lenders more willing to consider your application than if you have just started.
  • What sector/role you’re working in
    Those in certain professional positions such as doctors / nurses / barristers etc. may be approved with a shorter history than others.

Some mortgage lenders will never consider someone on a zero-hour contract, whilst others are happy to accept providing the applicant has a history of working on these contracts. It’s all about finding the best lender for you, which is the job of the specialists we work with.

If you’ve been declined on a Zero hour mortgage application, don’t lose hope – there are brokers in our network who specialise in customers in this type of employment, and they can offer you bespoke advice, help you get the best rates and assist you with your paperwork.

Deposit requirements for zero-hour contract mortgages

It’s possible to be approved for a mortgage with just 5% deposit on a zero-hour contract, but this is only usually possible if every other aspect of your application is stellar or you’re using a scheme such as Help to Buy. Most lenders who consider offering mortgages to zero-hour contract workers will, however, ask for at least 10% deposit.

That said, there are more factors than just your income type in deciding which mortgage lenders will consider your application. For instance, if you also have bad credit (read more about adverse credit mortgages in our standalone guide), you may need 15% as a minimum, perhaps more, depending on the severity and how recent the issues are.

Zero hour contract mortgage lenders

There is a whole range of lenders that may consider a zero-hours contract mortgage, all with different lending policy. If you have been declined by high street lenders such as Natwest or Nationwide then it doesn’t mean there are no other options, as certain specialist lenders can have a more flexible policy. For example…

  • Leeds Building Society will lend if you can prove your income is sustainable over a 12-month period and can evidence it with a P60 and at least three months’ wage slips
  • United Trust Bank usually only considers zero-hour contract wage as a secondary income, but can potentially make exceptions on a case-by-case basis
  • Norton Home Loans can lend if you have at least 12 months’ employment history, but may consider borrowers with less on a case-by-case basis
  • Atom Bank asks for at least 24 months’ trading history from applicants on zero-hour contracts

To establish the best mortgage lender and deals available to you, make an enquiry and we’ll refer you to one of the specialist advisors who handle these applications every day. They have deep working relationships with lenders who offer mortgages to customers on zero-hour contracts and know exactly how to get the best rates for people just like you.

Get a mortgage with bad credit history and a zero-hour contract

If you have adverse credit, your mortgage options can be more restricted, but that doesn’t mean there’s no hope of approval! There might be lenders available depending on the age and severity of your bad credit, as well as the amount of deposit/equity you have and the security of your employment.

Generally, the more deposit you have and the older the registration date of the credit issue, the more likely it is you’ll be approved.

The type of credit issue can have a big impact. For example, a few late payments are easier to overlook than a recent bankruptcy or repossession, but some bad credit mortgage lenders also take the reason for the credit problem into account.

You can read more in our guide to bad credit mortgages.

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Buy to let mortgages for zero-hour contract workers

If you’re on a zero-hours contract and are either an experienced landlord or looking to buy your first buy-to-let (BTL) property, it can be tricky.

Some lenders may require a minimum personal income through employment or self-employment, and assess this using a copy of your company accounts/payslips/contract etc.

If this is your first BTL property and you’re on a zero-hour contract, the lending policy is likely to be much the same as for a residential mortgage, in that most BTL lenders would want to see a minimum of 12 months’ income before they’re happy to lend. That said, there are some specialist lenders that could consider lending if you have less than 12 months’ income proof, so it’s is worth making an enquiry to speak to a specialist to find out.

If you’re an experienced landlord, however, it’s more likely you could be approved, as often lending policy is more flexible and your personal income is less important – some buy-to-let mortgage lenders don’t require proof of personal income at all, and others have no minimum requirement.

You can read more about this in our guide to proving income for buy-to-let mortgages.

Speak to an expert

If you’re applying for a mortgage on a zero-hour contract, seeking professional advice before you get started can be vital. It’s more difficult to get approved and land the best rates with complex income, but the right mortgage broker can offset the risk and tip the odds in your favour.

Our free broker-matching service will take your needs and circumstances into account and pair you with a hand-picked expert with the knowledge and experience you need. They can boost your chances of approval, help you get the best rates and guide you through your application.

Call 0808 189 2301 or make an enquiry and we’ll arrange a free, no-obligation chat between you and a broker who specialises in zero-hour contract mortgages today.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the 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.

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