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Michael Webb talks us through the mortgage process for teachers.
In less than 20 minutes, you’ll know a lot more about Professional Mortgages.
What is a professional mortgage and how does it differ to other types of mortgages?
A professional mortgage is exactly the same as any other mortgage. It’s a first charge loan on a home. The professional element is based around what you’re doing as a career, and that will trigger some criteria which we will come on to later.
In essence, it’s a standard mortgage for people of certain job roles that are seen as more secure. You might have a clear career path with reliable salary progression over a five to 10 year period.
A lot of the people that qualify for professional mortgages will have salaries that escalate quite quickly, and therefore lenders are willing to flex their criteria in ways that they wouldn’t for people in other jobs.
How do I know if I qualify for a professional mortgage?
It depends on your occupation. Banks that have a professional product will state within their criteria what you have to be doing as a job. Usually they will require you to be registered with the body that regulates that industry.
People who can get professional mortgages include accountants, architects, barristers, chartered surveyors, engineers, financial advisors and the medical profession – all the way from paramedics and ambulance technicians to dentists, doctors, nurses and NHS staff, depending on your banding.
There are also professional mortgages for lawyers, solicitors, teachers, vets, police officers and pilots. That should give you an idea of the kind of jobs that banks class as professional.
Do professionals or key workers get better mortgage rates?
This is a tricky question to answer. A bank that offers professional criteria may well price their products better for people with those professions. But a good mortgage broker will check whether those rates are the best and most appropriate for the borrower in comparison with the whole marketplace.
You might be getting a discount with lender A with a professional mortgage, but lender B – which doesn’t do professional mortgages – could still have a more appropriate or cheaper product for you. We need to look at the whole market.
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Can I get a mortgage for five times my salary?
Most of the professions I listed earlier will have career paths where salaries escalate quite quickly over five to 10 years as they become more experienced and more qualified.
Professional mortgage criteria typically do offer larger income multiples within their affordability calculations. Those income multiples can go all the way up to six times your salary, especially at the top end.
Lots of these professional mortgages will have a minimum salary requirement, and these can change. So it’s worth touching base with us if you’re in one of those roles, to see if you qualify and your salary’s over the threshold.
One lender, for example, would require a salary of over £200,000 to give you six times your income. But there are plenty of professional mortgages offering five times or 5.5 times now.
It’s also worth noting that on a joint mortgage some of these lenders will only use that multiple on the individual who is classed as a professional. So if one person is a professional and one isn’t, you would get five or 5.5 times the professional salary and only, perhaps, four times the other person’s. But if they were both professionals, they would both get the higher income multiple.
How can a mortgage broker like Mortgage Republic help with professional mortgages?
Don’t be blinded by the fact that you qualify for a professional mortgage. It doesn’t mean that’s going to be the overall best deal for you. You still need a mortgage broker to research the marketplace to ensure that that professional mortgage is the most appropriate option.
It’s almost a marketing tactic from banks, to bundle things up as professional mortgages and offer larger income multiples or a discount on the rate. But then when you compare that with the whole of the market it may not be the best deal.
There may be someone offering an ordinary mortgage with no additional criteria that’s still cheaper overall for you. So talk through your situation with a mortgage broker for a good recommendation on how you move forward.
Your home may be repossessed if you do not keep up with your mortgage repayments.