Can I get a mortgage on a fixed term or zero hours contract?

Q: “We’ve been refused by our bank for a mortgage as my husband is on a fixed term contract. Will anyone lend to us?”

Having a fixed term contract does not preclude you from getting a mortgage but lenders will want to see that there is some track record of earning on this basis. Just as with self employed borrowers it’s about proving the level of income, so that the mortgage will be affordable now and going forward.

Record of contract employment history

Mortgage lenders will usually want to see a history of contracting, usually with at least a 12 month history and 6 months remaining on the current contract. Alternatively, some lenders may be able to consider a continuous history of working in that field over a couple of years, which can be helpful where the borrower has switched from full time to contracting but remains in the same industry.

Some lenders can be more flexible about how they look at the income, particularly where the contractor is a higher earner or in IT where contracting is commonplace and are targeting that market.

Zero hours contracts have become more common in recent years and can be a real problem when trying to demonstrate income to a lender. However, some lenders are adapting and will again want to see some evidence of income built up over 1-2 years in order to be able to consider lending.

David Hollingworth, London & Country Mortgages

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