If you’re employed on a zero-hour contract (ZHC), securing a mortgage can be challenging, but it’s not impossible. At The Mortgage Pod, with over 35 years of combined industry experience, we specialise in helping people with non-traditional income sources—such as hospitality workers, NHS bank staff, locum or other care workers, freelancers, and many other flexible roles—secure the mortgage they need.
While lenders may view zero-hour contracts as risky due to the lack of guaranteed income and inconsistent hours, we aim to draw from our professional experience to guide you through everything you need to know to secure a mortgage as a Zero Hour Contract worker.
What Are Zero Hour Contracts (ZHC)?
A zero-hour contract means that your employer is not guaranteed to offer you a set number of hours. While this flexibility benefits some workers, it can pose difficulties when applying for a mortgage. Lenders may struggle to assess your ability to repay a loan when income is irregular, making it harder to secure approval without the right support.
Is It Harder to Get a Mortgage as a Zero-Hour Contract Worker?
Securing a mortgage on a zero-hour contract is possible, but it can be challenging. Lenders typically view these contracts as risky due to the lack of guaranteed income and inconsistent hours. This can make it difficult to prove financial stability and affordability. However, with the right lender and advice, zero-hour workers can find viable solutions that fit their specific circumstances.
How Do Lenders Assess Income for Zero-Hour Contract Mortgages?
Lenders generally assess your income by looking at your average earnings over the past 6 to 12 months. They may also consider the consistency of your income, the number of hours worked, and any other sources of income you may have. It’s important to show a stable income history, even if your hours fluctuate. Lenders will want to see that you have the ability to afford the mortgage over the term.
How Much Can You Borrow with a Zero-Hour Contract?
The amount you can borrow on a zero-hour contract depends on your income history, credit score, and financial stability. Most lenders look at your average monthly income over the past year. They will also consider any other income sources. For zero-hour workers, demonstrating a consistent track record of earnings is key to determining how much you can borrow.
Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.
What Deposit is Needed for a Mortgage on a Zero-Hour Contract?
The deposit required for a mortgage on a zero-hour contract varies depending on the lender and your financial situation. Typically, a higher deposit may be required to offset the perceived risk of inconsistent income. While most lenders ask for a minimum of 5% deposit, some may request 15% or more for applicants with irregular earnings. A professional mortgage broker will help you understand your required deposit based on your individual circumstances.
Essential Documents for a Zero-Hour Contract Mortgage Application
When applying for a mortgage on a zero-hour contract, you’ll need to provide documents that prove your financial reliability. This typically includes:
- Bank statements
- Pay slips
- Evidence of ongoing work
Some lenders may also request a letter from your employer or other supporting documents to help them assess your application. Having these documents ready can streamline the application process.
How to Find the Best Mortgage Deals for Zero-Hour Contract Workers
Finding the best mortgage deals requires working with lenders who understand flexible employment. Many high street banks may be reluctant to lend to zero-hour workers, so it’s essential to work with an experienced mortgage advisor who knows which lenders are more open to these types of contracts. By seeking the right advice, you’ll increase your chances of securing the best terms available.
Get Started with The Mortgage Pod today.
Can The Mortgage Pod Help Me Secure a Zero-Hour Contract Mortgage?
At The Mortgage Pod, we have over 35 years of experience helping clients on zero-hour contracts secure mortgages. Our team understands the challenges of non-traditional employment and can connect you with lenders who are familiar with how to assess fluctuating income. We’re dedicated to helping you find the right mortgage solution for your specific needs. You can Get Started Here.
Examples of Zero-Hour Contract Roles
Zero-hour contracts are common in various industries, especially in hospitality, healthcare, and freelancing. Examples of roles include:
- NHS bank staff
- Locum doctors
- Care assistants
- Freelance writers
- Delivery drivers
- Event coordinators
These positions may offer flexibility but can create challenges for securing a mortgage. Knowing how lenders assess these roles can help you prepare for a successful mortgage application.
FAQs: Zero Hour Contract Mortgages
Can I Get a Mortgage with a Zero Hour Contract?
Yes, it is possible to get a mortgage on a zero-hour contract, though it can be more challenging. The key is finding the right lender who understands your unique employment situation and is willing to assess your income history.
How Do Lenders Assess Income for Zero Hour Contract Workers?
Lenders typically look at your average earnings over the past 6-12 months to assess your affordability. They may also consider other factors like savings, your credit score, and any additional income or financial stability.
What Documentation Do I Need for a Mortgage on a Zero Hour Contract?
Common documentation includes bank statements, pay slips, and evidence of consistent earnings. Some lenders may ask for proof of ongoing work or a letter from your employer.
Are There Any Specific Lenders for Zero Hour Contract Workers?
Yes, certain lenders specialize in offering mortgages to people with non-traditional employment, including those on zero-hour contracts. At The Mortgage Pod, we have relationships with these lenders and can help match you with the right one based on your specific financial situation. Get Started here.
