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NHS Mortgages | What You Should Know
Respect and support for key workers exists across all sectors of the UK, including that of the mortgage industry. This leads to unique mortgage options for NHS staff, with specialist NHS mortgages representing a superior deal with higher value loans and potentially better mortgage rates than are available for those on other career paths.
What is an NHS Mortgage?
The term ‘NHS Mortgage’ simply refers to a range of specialised property finance loans that are tailored to take into account the many advantages and unique needs that exist for NHS employees.
This includes:
- Higher Loan-to-Income (LTI) values
- Mortgage affordability checks that consider future career progression
- Lower rates thanks to superior job security
- Understanding of multiple and irregular income streams
- Flexibility regarding length of time in your role
- Support for workers in fixed-term contracts
An NHS mortgage is one provided by a specialist mortgage lender who truly understands your position, unlocking a greater range of potential products and offering superior levels of flexibility that really takes your career path into account.
At Clifton Private Finance, we have the experience and know-how needed to understand your individual mortgage needs and support you through your mortgage journey, working with you to find a mortgage provider and specialist deal that offers you the best rates and the highest loan-to-income ratio - getting you the buying power you need to get the home you truly love.
The Benefits of an NHS Mortgage
With greater job security, a defined and well-understood career progression, and the respect given essential worker status, NHS staff are generally attractive to mortgage lenders and supported accordingly.
The Boost to LTI
One of the greatest advantages this unlocks is the potential for higher loan-to-income (LTI) multiples. While most traditional mortgage offers are limited to a multiple equal to 4x salary, occasionally stretching to 4.5x, NHS workers can command LTI multiples as much as 5.5x their salary.
Consider a junior resident doctor in foundation training, who might earn as much as £42,008 p.a.. A standard mortgage lender would consider this income viable for a mortgage of around £168,000. By comparison, a specialist NHS mortgage lender could offer a mortgage in excess of £230,000 - a difference of more than £60,000.
When it comes to buying a home in the UK, this boost is more than just considerable - it’s essential. With the average price of a UK home continuing to rise, the ability to raise your buying power sufficiently to meet the average cost of a home makes all the difference.
Understanding Irregular Income
Not all NHS staff are on a simple ‘one size fits all’ salaried income. With shift work, locum work, and overtime all factors that are common for NHS staff, you really need someone who can get their head around the complexities - most traditional mortgage lenders would consider it a stretch to even count 50% of overtime income, and would likely ignore it entirely.
With their understanding of the stability of NHS work combined with our ability to line all the numbers up properly on the page, you will be able to show your true income, accurately showcasing your strong levels of affordability.
With our help, you will obtain a mortgage that’s larger and with a better interest rate than you could achieve by simply going to your local bank with nothing more than a salary payslip.
Considering Your Future
Another benefit that comes from a specialist NHS mortgage is the lender’s appreciation for your career path. Specialist lenders will consider your stable trajectory and many will offer mortgages based in part on your future earning potential - unlocking larger mortgages and giving you access to a better home today.
How Your Role at the NHS Impacts Your Mortgage Options
It is important to understand that not all NHS jobs provide the same benefits, nonetheless, there are advantages for NHS staff no matter their role.
Doctors and Dentists
With strong future career potential, doctors and dentists are in a favourable position when securing a mortgage. These may include:
- Improved buying power based on future consultant-level salaries.
- Greater understanding regarding variable earnings from both locum and private-based work.
- More flexible approval process for junior and newly-qualified doctors based on understanding of future earnings.
Nurses and Midwives
The stability of a nurse or midwife occupation is not to be underestimated. Lenders understand your dedication to your career and will consider this when evaluating your mortgage application. While pay is typically lower than that for doctors, nurses offer a greater level of consistency which is a key component of lender risk assessment.
This can lead to:
- Faster and more flexible mortgage agreements.
- Access to superior mortgage rates and longer fixed term mortgage periods.
- Understanding of shift work that can boost base salaries in affordability calculations.
Lenders who do not understand the unique circumstances of NHS workers can often feel off-putting and dismissive to nurses and midwives, ignoring overtime when calculating mortgage sizes, and treating fixed-term contracts with less respect than those in permanent employment. For this reason, it’s vital that midwives and nurses approach specialist lenders to receive the respect and mortgage offers they deserve.
Paramedics, Physiotherapists, and Pharmacists - Other NHS Staff
There are many roles within the NHS that don’t fall under the categories of doctor or nurse. Lenders who specialise in NHS mortgages are also there to benefit other key NHS workers in their home-buying dreams with an understanding and flexibility that’s perfectly suited for your demanding job.
Depending on your role and the level of security it typically represents, a specialist mortgage may offer similar benefits as those enjoyed by other category of NHS staff. When you work with a mortgage broker who understands NHS pay structures and the unique nature of your income, you give yourself the greatest possible opportunity to secure a superior mortgage.
Speak to a specialist Clifton Private Finance advisor to understand the spread of powerful mortgage options available to you, and let us help you find an NHS-based mortgage to suit.
NHS Mortgage Rewards for Long Service
Because one of the key considerations lenders account for when assessing an NHS mortgage is how it reflects reliability and ongoing security, the longer you work in the NHS, the more mortgage perks you benefit from.
Lenders see experience as a sign of financial reliability, rewarding long-serving staff with potentially superior rates and larger borrowing amounts.
Newly qualified staff (under 12 months) - While lending options may be limited for those who are on probation or shorter fixed-term contracts, lenders are willing to consider superior mortgages even for newly qualified doctors.
Reliable staff (2+ years) - NHS workers who have been building their career will be able to enjoy higher LTI multiples than those new to their roles. Furthermore, once lenders see a couple of years of continued employment, the risk assessment regarding fixed-term contracts will relax considerably. At this stage, specialist NHS mortgage lenders will often consider a fixed-term contract no different to traditional full-time salaried employment.
Senior staff (5+ years) - NHS specialist lenders will quickly approve even the most complex income structures for long-term NHS staff, willing to consider multiple income streams such as a base salary with overtime, locum work, and other allowances. For senior staff, greater levels of LTI multiples will be offered and mortgage rates will be more preferential to reflect the lowered risk.
For newly qualified staff, working with Clifton Private Finance means a greater chance of higher LTI multiples, while long-term and more senior staff with a solid history behind them can achieve greater mortgage buying power and see significant drops in interest rate.
What You Need to Get an NHS Mortgage
Before applying for an NHS mortgage, you need to consider the following:
A 10% deposit - While it is possible to find 5% deposit mortgages, these are rarer and may limit some of the other benefits from getting an NHS specific mortgage. For example, a 5% mortgage may mean suffering a lower LTI multiple and limiting your overall buying power. For most NHS workers, a 10% saved deposit is an ideal target to getting the most from your mortgage.
A clean credit history - Your credit rating, or credit history, should be in good condition. The previous three months are of the most importance, though lenders will look back over the year and even further back to three years when assessing your mortgage. The larger a mortgage you are after, the more your credit history will matter. Specialist bad credit mortgages for struggling NHS workers do exist - speak to a bad credit specialist at Clifton Private Finance to find out more.
A low debt-to-income ratio - As part of your larger affordability stress testing, the lender will consider other debt obligations and how much of your monthly income is tied up in meeting existing debt payments. Clearing loans and credit card debt, as well as limiting other obligations such as car finance, will help you achieve the mortgage you’re after.
Full income paperwork - If you are looking for a specialist NHS mortgage that considers multiple income streams, such as private work or overtime hours, it is important that you have detailed documentation that can prove the viability and regularity of this additional income. When you work with Clifton Private Finance, we will help you gather together the documentation you need for a smooth application.
Applying for an NHS Mortgage with Clifton Private Finance
If you are an NHS worker and looking to make the most from the reliability and future career path of your role to obtain a strong position when house hunting, speak to Clifton Private Finance.
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