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Gary Boakes from Verve Financial talks us through NHS mortgages.
Are there specific mortgages tailored to the NHS?
Actually no, there aren’t any specific mortgages for NHS people. But there are certain things lenders can do for professionals in the NHS.
There used to be an NHS Key Worker scheme, but that unfortunately ended in 2019 and it hasn’t really been replaced.
Is it easier to get a mortgage if you work for the NHS?
It really depends on the situation and what level you work at within the NHS. If you are a medical doctor then there are some really good affordability options out there for you – potentially offering five and a half times your income as a doctor, which is obviously way above normal criteria for most lenders.
Aside from that, it can be a little bit tricky. Obviously nurses specifically have a range of incomes, whether that be overtime shifts or bank work. Some lenders will specifically understand how that works in the NHS, and some will take 100% of bank work as part of your income. On the other hand, some lenders won’t, or will restrict overtime to 40% or 50%.
It’s best to go to a broker to find out which lenders are going to be best suited for your specific circumstances. If you go to your own bank, for example, you could find they are one of the lenders that doesn’t understand NHS income.
How do I get a mortgage if I work for the NHS?
As I mentioned there are no specific mortgages for the NHS. The only one was brought out by Kensington, called their Hero Range, which was designed specifically for NHS clinicians and other key workers. That offered five times income and 100% of overtime – so there are one or two schemes out there.
But generally there isn’t much difference for key workers. You’re not getting any better rates, although there might be a bit of an advantage in terms of criteria and affordability. That’s actually good news – some people are worried that their profession makes it more complicated, but it’s our job to know which lenders are going to best suit your set of circumstances for the type of income you receive.
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We want to give you peace of mind, knowing that no matter what happens, you’ll enjoy a financially secure future.
Can I get a mortgage for five times my salary?
Yes – medical doctors can certainly get even five and a half times their income. We can do that with a number of lenders now as part of their professional range of mortgages.
Various lenders will offer up to five times your salary depending on a number of criteria. That might include your level of income, your Loan to Value and whether you’re taking a two -year or five-year product. So, yes, definitely in the market at the moment there is the possibility to get five or five and a half times your income.
How much can I borrow and what deposit do I need?
How much you can borrow will depend on your individual circumstances – your income, expenditure and your specific situation. Come and speak to us for a clear idea of what you can borrow based on your personal circumstances.
At the moment the maximum in the market is a 95% Loan to Value [podcast recorded in May 2023], although there is talk of a 100% mortgage potentially coming out with Skipton Building Society. So at this moment in time you will need at least a 5% deposit, but that could change.
Do NHS mortgages have any restrictions or limitations?
No, it’s the same with any other occupation. It’s all about finding the right lender that understands the way your income works and takes everything into account – ideally 100% of your overtime, 100% of shift allowances and 100% of bank shifts. Lenders will always have restrictions, so it’s just about working out which lender we should go to.
Do NHS workers get better mortgage rates or special discounts?
Unfortunately not. Even with the Kensington Hero Range it’s not about the rate, it’s more about the criteria. That’s what lenders generally do – mortgage rates are set. You’re not going to get discounts on them. It’s just how they look at underwriting and your affordability that can differ from lender to lender.
Builders and developers are a little bit different. You can find NHS key workers discounts on some new build developments. That varies from site to site, so I can’t be specific, but we have known that to happen in the past.
What schemes are available to NHS workers?
The big one at the moment is the Shared Ownership scheme, where you can part rent, part buy a home. But there may potentially be some exciting news that Rishi Sunak mentioned recently – he is considering bringing back the Help to Buy Equity Loan, which would be fantastic.
Also, the First Homes scheme launched in June 2021, aimed at First Time Buyers and key workers. It offers them a discounted price on properties – starting at 30% up to potentially 50%, depending on the value and location.
I have to admit, it’s not something I’ve seen much of and I don’t think there’s been massive uptake on it. Some schemes are really successful while others take a time to warm up – this potentially might be one of them.
Hopefully we will see some changes over the next six to twelve months to help key workers and First Time Buyers in general.
How can a broker like Verve Financial help me with an NHS mortgage?
We understand that working in the NHS can be difficult. It’s a challenging job, and your work patterns and shifts make it hard to find the time to discuss these life-changing things and buy a house.
We know that your time can be limited, so we go out of our way to make appointments easy. I’ll see you wherever – on Zoom, face-to-face, we can come to your place of work or arrange evening appointments.
I always try to offer you that time, plus speed and a good understanding of your situation. We’re here to make your life easier, because you’re in a busy work environment and you have some big decisions to make. We’ll support you all the way.
Your home may be repossessed if you do not keep up with your mortgage repayments.
Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 19/05/2023