Zero Hour Contract Mortgages

What is a zero hours contract?

Where  the employer does not commit to provide a minimum number of hours and the worker is not under obligation to accept work offered, this is known as a zero hours contract.

Very often the employer will offer a regular working environment for minimal hours with an option to vary the hours worked during busy or quiet times.

Mortgages for people on a zero hours contract

There is no difference in the type of mortgage or amounts available to borrow for clients who are a zero hours contract. Lenders will expect you to demonstrate a reasonable track record, normally a minimum of 12 months which shows a consistent level of working hours and earned income.

If the income from a zero hours contract forms only a small part of the overall income, for example if it is either a part time job for a 2nd borrower or maybe a 2nd income stream for the main income earner, lenders may adopt a more flexible approach.

Can I get a mortgage on a zero hours contract?

Getting a mortgage with income solely from a zero hours contract is more difficult than with a regular permanent contract, due to the fact that both the employer and the employee have no contractual obligation and may choose to offer or accept work.

However, it is not an impossible situation and provided you have a track record of at least 6 months, although 12 months is more widely expected, certain lenders will consider an application and view the income a “permanent and regular”.

How much deposit do I need on a zero hours contract?

As with any other type of mortgage, the minimum deposit is generally 5%. However, a larger deposit will result in potentially lower interest rates and also allow the lender a greater flexibility in considering the overall case.

Can I get a zero hours contract mortgage with bad credit?

It is definitely possible to get a mortgage using a zero hours contract income and at the same time have a less than perfect credit profile.

The severity, frequency and type of any past or current credit issue will need to be fully discussed in order to establish the options available to you.

Can I get a help to buy mortgage on a zero hours contract?

The simple answer is Yes. The primary issue is the eligibility for a mortgage. Provided you can meet a lender’s income assessment requirements, there is no reason why you cannot apply for a Help to Buy mortgage.

Can I get a buy to let mortgage on a zero hours contract?

This may be possible with the correct information gathering and application packaging.  Some lenders do require a minimum level of earned income regardless of the rental income, although it is the rental yield which is used primarily to assess affordability.

For an existing landlord, the experience in the market will definitely help smooth the process.

As a first time landlord on a zero hours contract, you are likely to need at least 12 months history in the current position.

Zero hours contract mortgage rates

Mortgage rates for these types of applications are no different to any other kind of business and do not carry a premium or loading.

Zero hours contracts mortgage lenders

There is no easy selection or choice of lenders for zero hours contractors. Every case is individual and needs careful assessment before being put in front of a lender for a decision.

Speak to one of our experts or complete the enquiry form and we will discuss your requirements in more detail.

Are specialist mortgage lenders safe?

Specialist mortgage lenders are just as safe as any traditional high street lender. They are governed by the same laws and regulations.

If for some reason a specialist mortgage lender were to fail and therefore enter into administration, your mortgage would be passed onto another provider or mortgage administration company. The original terms of your mortgage would still be honoured and your payment terms would remain the same as if you were with the original company. Under no circumstance will your mortgage be recalled. This is all protected under the current laws and regulations.

The situation would be exactly the same with a traditional high street lender. So exactly like a high street lender, specialist mortgage lenders are safe.