NHS Mortgages

Michael Webb shares his expertise on NHS mortgages.

Are there specific mortgages tailored to the NHS? 

There aren’t specific mortgages, but sometimes lenders’ criteria is more applicable to how the NHS works, how contracts are structured and how employees are paid, particularly on the medical side. 

While there’s no such thing as a specific NHS mortgage, you may find that lenders bring out key worker mortgages that may well be relevant to NHS staff. 

Is it easier to get a mortgage if you work for the NHS?

There are certain things that would make your application easier – you’re working for a government organisation, for example, which means that your employment is fairly secure. Nurses are never made redundant – there’s actually a shortage of them. So it’s a very stable employment which gives lenders more confidence in your situation.

There’s always debate around pay in the NHS but typically people have stable and good pay. These tend not to be not minimum wage jobs. You’ve also got to consider the individual, however. You would still need to have good credit and manage your finances well – these factors are almost more important than whether or not you work for the NHS.

How do I know if I qualify for an NHS mortgage?

As I say there’s no specific NHS product, but we do get lots of NHS staff asking for them. We work with a lot of NHS staff. If a lender did bring in a product that is NHS specific, you would need to have an NHS payslip or be able to prove you’re a key worker as defined by the lender.

But as an NHS worker you would potentially qualify for many mortgages, provided you have the relevant deposit available for the purchase price or remortgage value that you’re looking at. Your income will need to match the lender’s affordability calculators and credit profile. 

That doesn’t mean that you have to have perfect credit. Some lenders will consider you if you don’t. Obviously the better your credit file, typically the better the interest rates you can achieve.

Can I get a mortgage as a foreign national working for the NHS?

We deal with a lot of foreign nationals who work in the NHS, it’s a huge employer for people coming to the UK. The government is actively seeking highly skilled migrant workers to come and work here, particularly in medical fields. 

The answer to the question is yes, with some caveats to that, of course. You can get a mortgage as a foreign national working for the NHS with some considerations. Typically you will need the right to remain in the UK. Many foreign nationals, particularly those from the EU will have indefinite leave to remain or will be working on a five year scale to get that. That’s a very common thing that we work with. 

If you’re here on a highly skilled migrant visa that is also acceptable. Those visas are typically set for a period of time. Lenders might want to see that that visa has a certain amount of time left to run on it, or confirmation that it will be extended. These visas are fairly easy to renew for doctors and consultants wanting to stay within the UK. 

Another consideration if you are a foreign national is where your deposit is coming from. You can still have a gifted deposit from your family, but if that gift is coming from outside the UK there will be a lot more due diligence required on its source. Some lenders will ask for it to be in your UK bank account for a period of time and have gone through all the money laundering checks required. Usually that’s not a small sum of money, so some lenders will not lend at all when there’s a gift coming from outside the UK. 

If you’re a foreign national without permanent right to reside in the UK and working for the NHS, my recommendation is not to go direct to a bank. Speak to a mortgage broker – ideally a whole of market mortgage broker – that can put you with a lender that would be right for your situation, your visa and your employment type. You might be a contractor rather than a permanent employee. 

There’s some really stringent and difficult to navigate criteria here. We have worked with people that have come unstuck by going to banks direct. When the application has reached the underwriters it’s been declined because it hasn’t quite fit their criteria. We would have been able to navigate in the right direction from the start and avoided wasting several weeks.

Can I get a mortgage for five times my salary?

When we look at multiples of a salary, it’s all about lenders’ affordability calculators. Whilst that affordability calculator will work out a multiple of your salary, a lot of the time it’s not a round number any more. It factors in lots of other things. Your total salary is one of those factors, because if you’re earning £90,000 a year as a GP, compared with £30,000 as a nurse, the percentage of your net salary spent on a mortgage payment is a lot lower. 

Other considerations are your costs. Things like loans, car finance, credit card debts, childcare, private school fees…. All of those are outgoings that will factor into how much you can borrow. 

But the answer is yes, you can get five times your salary and there are potentially lenders that will go to more than that, particularly if you are a highly skilled, highly paid individual within the NHS.

How much can I borrow and what deposit do I need?

How much you can borrow will be very much dependent on your salary, your outgoings and your family situation. Deductions from your gross salary are also considered – such whether you’re paying large pension contributions. 

Some lenders will take that as a cost, but some lenders won’t. That can be important when we’re looking at NHS mortgages that maximise your borrowing. Pension contributions can be quite high for the NHS because staff get decent pensions when they retire, but they do pay a chunk of their salary each month towards that. It’s the same for the police and fire service. So we know to look at lenders who are a bit more flexible and understanding of that. 

The deposit you need will depend on your affordability and credit score, but there are still 5% deposit mortgages in the market.  The more deposit you put down, the better, as it will unlock lower interest rates. There are also opportunities if you’re buying from a family member or from your landlord as a sitting tenant. Lenders will allow those individuals to gift you a deposit from the equity, in which case you don’t necessarily need any cash deposit.

Can I use bank hours to get a mortgage? 

This is a very common question from almost every NHS employee. The NHS doesn’t pay overtime, but has different shift rates, so payslips can be quite complex. Staff often work a shift pattern which might include weekends where their hourly rate will be increased. Night shifts also have a different hourly rate. 

Most lenders look for a track record of that shift pattern to include it. The base salary might be £38,000 but the shift rotation might take that to £45,000 thanks to uplifts at weekends, bank holidays and night shifts. We’re able to get lenders who are sympathetic to that shift pattern and can see the consistency in it. 

Bank hours are slightly different because they appear on a different payslip. But in basic terms, yes you can use your bank hours. An NHS contract is often three 12.5 hour shifts in a rotation of seven days. That leaves other days individuals can work if they want to, but they won’t be paid overtime. They’ll be paid on a separate bank hours contract. 

We have helped people use their bank hours as NHS employees to increase their income for a mortgage. Most lenders that accept bank hours will want to see consistency. So you can’t, for example, have never done bank shifts and then come with a single bank hours payslip and expect that to be annualised. We’d need to see three months’ bank payslips as a minimum.

Some lenders will want to see a P60 for bank hours because they’re not contracted. You can dip in and out. There are quite a lot of criteria around this so speak to a mortgage broker for help. 

Does private medical work count towards my income?

Doctors work a structured shift pattern in hospitals and many of them, particularly in surgical work, will have both NHS contracts and private medical contracts, where they do similar work in the private medical sector. 

Because of that they may have two PAYE payslips or potentially run their private work through a limited company. Both are very common situations. This income can all be used because there will be tax returns in place as well as payslips and P60s. 

It’s much easier to track the income in this situation compared to, say, a self-employed taxi driver where pay fluctuates seasonally. Lenders are quite comfortable with these multiple sources of income and some lenders will use all of it. Some may only use half of the private medical work. They might want to see the additional contracts. 

In summary, where there are private medical contracts in place for doctors or nurses, the income can be used towards your mortgage. 

Do NHS staff mortgages have any restrictions or limitations?

The things that are more specific to NHS staff getting a mortgage are really linked to lenders who are a bit more strict. They may not use all of the shift allowances that apply to you. They might be a bit stricter on foreign national workers in the UK, irrespective of the employer. 

NHS payslips can be quite complex, so having an understanding of these is really important. If you’re dealing with a mortgage broker that glazes over when they look at your payslip then they are probably the wrong broker for you. 

Your payslip can have money going in and out, shift allowances, sick pay, holiday pay and more. They can have ten or twenty rows on them over the course of one month. 

Other than that, the restrictions are only going to be those that apply to everyone. So how income is calculated, credit scoring are exactly the same. 

Do NHS workers get better mortgage rates?

This is something that drops in and out of the market. Relevant deals are usually not branded as an NHS mortgage. It’s usually ‘key worker’. Product rates come and go, so speak to a mortgage broker about whether there’s anything specific to your employment type at the moment. 

Key workers do sometimes get preferential treatment. Some shared ownership companies reserve properties initially for key workers before they go to open market. The same is true for affordable homes. That’s where there can be some benefits for NHS workers, rather than specifically on mortgage rates.

Are there any other schemes or help available to NHS workers?

Again it’s anything that is targeted towards key workers. A lot of the affordable housing and shared ownership schemes are initially launched by housing associations who say that you have to be a key worker to qualify for property. 

That can also be legacy moving on, meaning you can only sell it to a key worker which can sometimes be challenging. Some schemes require you to have a connection to the local area as well. 

As we sit at the moment there is nothing specific to get NHS workers into property ownership – it’s something of a gap in the market that lenders and the government should look at. It’s worth saying that NHS workers have access to the Lifetime ISA and all the benefits that these bring to help you save towards a deposit.

How can a Mortgage Republic help me with an NHS mortgage?

The main things to take from this episode are that most NHS workers have complex payslips, and you really need a mortgage broker who frequently deals with NHS workers. 

We’ve talked about other complex things like bank hours and having two sets of payslips and P60s for the same job. Private medical work is another complex area where understanding is required to place that mortgage. 

There are thankfully a lot of foreign nationals that work for the NHS with different rights to remain. We understand settled status or pre-settled status from the EU, and highly skilled migrant worker visas for those travelling from further afield. 

Trying to navigate all of this yourself is very challenging. It’s easy to trip up – particularly for foreign nationals trying to comprehend how the UK mortgage system works. As mortgage brokers, we can guide you through that and get you the best deal available. Importantly, we’ll get that right first time, without having to go to multiple lenders.

Your home may be repossessed if you do not keep up with your mortgage repayments.