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NHS Mortgage
George Stringer and Sam Hill talk us through how to get a mortgage if you work for the NHS.
Podcast approved by The Openwork Partnership on 15/01/2024.
What is an NHS mortgage and how does it work?
An NHS mortgage is a mortgage offered specifically for people employed by the NHS. Some lenders will offer specific rates or will potentially lend more than other lenders. You might gain five and a half times your income, for instance.
Currently, there aren’t actually any NHS options available due to market conditions. There are, however, some ‘professional mortgages’ that NHS employees may be eligible for. It’s worth looking into whether you do fall into those categories.
Can you explain the mortgage application process for an NHS worker?
The process is much the same as a normal mortgage application. It’s just that you are an NHS employee. To prove that you’d have payslips or, if you’re a new starter, perhaps a contract as well.
The most important thing when you consider applying is to speak with a broker and we’ll talk you through all the steps and what you need to do.
What documentation do I need to provide for a mortgage as an NHS worker?
It’s the same as any employee, really. Most lenders require your latest three months’ payslips and sometimes three months bank statements too. With all lending, banks may ask for different documents. They could ask for potentially more payslips or bank statements, a P60 or a contract.
How can I find a lender that offers a mortgage as someone who works for the NHS?
Speak with a broker – we’ll assess your situation. Our advice is personalised to the client, whether you’re in the NHS or not.
The best outcome might not be with an NHS mortgage or professional mortgage. It could just be down the standard route with a different lender. We’ll talk through your options and work out the most suitable approach.
What are the typical interest rates and loan terms for a mortgage of someone who works for the NHS?
The interest rate ultimately depends on a lot of different factors, such as the lender, the amount of deposit you use – 10% or 25%, for example – and a reflection of the current market.
As we speak in December 2023, there have been big changes in the market due to the cost of living crisis and high inflation.
The term would be dictated by your age at your age at your next birthday. Up to age 70, the maximum mortgage length is 40 years. If you are younger than 30, it may be possible to extend past 70 in some circumstances, but seek advice on this.
Length of term will also be reflected in the monthly mortgage payments – the longer you take a mortgage, the lower the payments are.
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Can I use a mortgage to buy a property jointly with someone else?
If you both work for the NHS or if one of you doesn’t, it won’t matter too much. You both just need to meet the requirements for the lender.
It’s possible to do a joint mortgage application for a professional mortgage, and only one of you needs to be in the qualifying role for that product. It’s always different case by case, so speak to us and we’ll work out the best thing for you.
What happens if I’m no longer employed by the NHS after obtaining a mortgage?
It won’t impact your current mortgage or mean you have to repay it early. When your current mortgage product, such as a fixed rate period, comes to an end after two or three years, you should speak to your broker about remortgaging.
We would look beyond an NHS specific product at that time if you’re no longer employed by them. It may need to mean moving to a more mainstream product with a new lender.
The main thing is to keep up your payments. It doesn’t actually impact your current deal if you had an NHS specific mortgage but now no longer work for the NHS.
Can I port my mortgage as an NHS worker if I need to move to a different property?
Porting is now quite a common theme, especially in recent times with interest rates being quite high compared to what they were a couple of years ago.
If people are looking to move, holding on to that deal is often the best advice and the cheapest outcome. If in the next two or three years you might look to move, or the job might take you to a different hospital trust, speak to us about it at the start of the process. We can make sure you have a mortgage that is portable. But most mortgages have the portability option these days.
Are there any additional fees or charges associated with the mortgage as someone who works for the NHS?
NHS mortgages may have reduced fees or charges, but this varies from deal to deal. As we mentioned, there aren’t any NHS options available currently. However, Yellow Brick Mortgages won’t charge any broker fees for NHS employees, as our way of giving back.
So there are benefits out there to NHS employees that aren’t specific to mortgage costs – you can get fee-free advice, for example.
What happens if I’m unable to make my mortgage payments as an NHS worker?
It’s the same for anyone with a mortgage who is struggling. We’re in difficult financial times at the moment. The best and first thing you should do is speak to your lender directly. They’ll have provisions in place and options to consider in making it easier for you.
Some lenders have signed up to a government scheme called the Mortgage Charter to help people in that situation. It’s all about making sure that there’s good, clear communication.
The one thing I would advise is not to just stop paying your mortgage. Speak to the lender and see what they say.
Can I get a Buy to Let mortgage as an NHS worker?
Yes, of course you can, subject to approval. Ultimately, there isn’t a specific NHS Buy to Let mortgage. NHS mortgages don’t tend to stretch into the Buy to Let market and are more for residential purchases for properties to live in. But subject to having the deposit and approval, there’s nothing to stop an NHS worker from getting a Buy to Let.
What if I have bad credit? Can this affect me getting a mortgage while working for the NHS?
It could limit the options a little. There are specific ‘adverse’ lenders that are much more lenient or accepting of bad credit. You might perhaps need a larger deposit or to meet other requirements with these.
With bad credit, it’s all about what’s showing on the credit file – not the score specifically. Talk to a broker, as we’ll be able to look across the market and find options for you with a lender that accepts this sort of situation. You could still get a mortgage, but there may be a slightly higher interest rate or higher fees.
How do I apply for a mortgage as an NHS worker? How can a mortgage broker help?
Seek advice from a broker, as we can source the most suitable options for you. That may be specifically an NHS mortgage, or it might be that a mainstream mortgage could be better for your situation at that time.
A broker can make sure you’re not overlooking the obvious by going for a specific NHS mortgage. There may be better options with another lender. The best thing you can do is make sure you’re getting sound advice.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages.
Approved by The Openwork Partnership on 15/01/2024.
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