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


Fixed term contracts have recently become increasingly popular as they enable companies to maintain a degree of flexibility when it comes to cover for certain absences. 


Much like the way lenders deal with professional contracting, there is no set way that a lender will deal with fixed term contractors as each one has their own set of parameters. 


So, why have I had my application declined? 


You may have had your mortgage application declined for a number of reasons, including:  


  • If your contract was cover for a short period of time e.g. maternity leave, leave of absence or cover for a short sabbatical 


  • If your earnings don’t meet the minimum required for a contractor mortgage 


  • Inexperience in the field you are now working in 


  • Mortgage lender has no criteria for contractors 


The benefits of a fixed term contract when it comes to a mortgage 


Whilst lenders’ appetites vary for fixed term contract borrowing, they are usually unaware of the legalities surrounding fixed term contractors. 


One interesting note is that, legally, the end of a fixed term contract, is a dismissal. This means employers have to issue a reason for not offering a run-on contract. If they chose not to, they usually justify it with redundancy, but they must justify their decision. 


Of course, the employer may consider redeployment, but if you were to appeal any decision taken by your employer, your mortgage repayments would be up in the air, from a lender’s point of view, which is where their hesitation comes into play. 


What can I do with my employer? 


There are changes you can make with your employer before talking to us: 


  • Talk to your employer about the possibility of offering you a different contract 

  • Stick to the same industry when serving fixed term contracts, as lenders take this into account 

  • Consider becoming self-employed, as at this would mean that you’d have access to other mortgage products previously inaccessible to you. 


For advice on how you can get a mortgage whilst on a fixed term or zero hours contract, speak to one of our expert advisers who will be able to help you with the next steps.