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Nurse Mortgage Frequently Asked Questions
Listen below as Michael Webb talks all all about mortgages for nurses.
Michael Webb talks us through nurse mortgages.
How do I get a mortgage if I’m a nurse?
The process is exactly the same for anyone applying for a mortgage, whether they are employed or self-employed. Most nurses are going to be employed and working within the NHS or a private medical organisation.
The typical process is first to meet and speak with a mortgage broker and have your documents and affordability assessed. That would involve supplying your payslips and then a skilled mortgage broker assessing your income and the deductions you have on your payslips. Your pension will be a key one, especially if you work for the NHS, and also potentially student loans.
Then we assess your overall affordability, looking at what deposit you’ve got available and then placing you with the most appropriate lender. A mortgage broker is also going to be able to look at any potential other income you can use from your payslips. NHS nurses, for example, will work a shift pattern that may take them over weekends, night shifts, bank holidays and public holidays – and they will get different shift allowances for each.
An experienced broker like ourselves who often works with NHS employees – particularly nurses – will have a lot more detailed knowledge of how that NHS payslip works and what income can and can’t be used. That way we can help you maximise how much you’ll be able to borrow.
What discounts or schemes are available for nurses?
Broadly speaking the same rules apply to nurses as anyone else. But nurses are classed as a key worker, and very often there are key worker schemes that come in. There are no specific mortgage products at the moment, but I wouldn’t be surprised to see a couple of banks launching a deal for NHS staff or nurses. Nurses are constantly in the media so it would be a very good PR move from a bank to do that.
There are also various property schemes to look at.
Some shared ownership properties are only available to people assessed as key workers, or people who have a geographical attachment to the local area. Nurses would be eligible in most cases for that.
Many NHS staff and nurses may well take shared ownership properties, particularly in the more expensive areas of the UK. It’s a good way to get onto the property ladder and then you can staircase your ownership up over the years.
Joint Borrower Sole Proprietor
You may also consider a Joint Borrower Sole Proprietor (JBSP) mortgage. These are the equivalent to a guarantor mortgage, and use two incomes but only single ownership. The Joint Borrowers may be the individual borrowing, plus a parent. Then sole proprietor means single ownership, which avoids the stamp duty issues of it being a second home to the person who is the joint borrower or guarantor on the mortgage.
This scheme works very well for nurses, as when they start their career their salaries may be lower but they have clear career progression. Your salary will progress quite quickly over the initial years of your mortgage – perhaps over a five-year period. At that point you might look to remove the joint borrower.
Right to Buy
Right to Buy would be relevant if you’re a council tenant or live in a housing association property. It gives you the right to purchase your home with a significant discount, depending on how long you’ve lived there.
Help to Buy
Help to Buy is now something in the past – it has now ended both on resale properties and on new builds. There’s nothing in the pipeline from the government to replace it. The recent budget in autumn 2022 didn’t bring anything new in. They may well announce something depending on how the housing market is progressing in the spring of 2023, but there’s nothing at the moment. So on new build properties you would now look at what deals are available from the builder.
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What mortgage options are available for nurses?
The options available will be the same as for any other borrower. So you’d be looking at a mortgage term up until retirement, with a deposit starting at 5% depending on your income, affordability and credit score of course.
In terms of products you have the same options of a fixed rate mortgage, a tracker mortgage, a capped rate mortgage, discounted mortgages or lifetime trackers. All the usual suite of products will be available – unless of course a bank decides to bring out a product specific to the NHS or nurses.
Can agency nurses get a mortgage?
This will come into how much a nurse can borrow and what income can be used. We frequently deal with NHS nurses and the NHS do not pay overtime. So if you want to work additional hours, you would do that by doing bank hours as a nurse. This is very common. You would get another payslip stating those hours and your pay. Bank hours can be used towards your mortgage if there’s a regular track record of that work.
Very commonly, lenders will ask for a whole year’s worth of evidence rather than just a couple of months – so it needs to be something that is consistent and regular. It’s not enough to do a few bank hours in the three months before you apply. It might be that some months of the year you haven’t done any bank shifts, but the lender would take an average of the whole year.
Some people will also take agency contracts on top of their NHS work, or they may just have an agency contract. Agency contract nurses can get a mortgage, but it can prove more tricky than if you’re on a permanent NHS contract.
The fact that you may not be needed by the agency tomorrow poses a risk to lenders. So what they look for is a track record of your agency work, and usually they want to see your P60. But that’s not to say you wouldn’t be able to do something if you had less than a full year as an agency contract, especially if it is additional income.
You’re definitely going to need at least three month’s payslips to use agency work as a nurse to get a mortgage.
What else do we need to consider when getting a mortgage as a nurse?
The key thing is to work with a mortgage broker that understands how NHS payslips work, because they can be complex. They list additional income, deductions for pensions and things like that – so brokers need to really know how to read them.
A good broker will understand the income you’re receiving and why it fluctuates so much based on your shift pattern. We know that shifts change over a three month period depending on whether you’re working weekends on that rota schedule, or whether there have been any bank holidays.
Having a mortgage broker with that knowledge enables you to get a mortgage as a nurse that will be the most suitable for you. That could mean helping you borrow more, or getting you a better interest rate. We can pitch it to the right lenders in the right manner, because we understand how your income works and how to present that to your best advantage.
Your home may be repossessed if you do not keep up with your mortgage repayments.