While there aren’t specific mortgages aimed at nurses, there are a number of products and schemes available for individuals in this profession, and a range of UK lenders who are happy to consider applications from those with unconventional income arrangements.
This guide explains the common issues that can inhibit nurses getting a mortgage, what schemes may be of interest to someone in this profession, and advice on how to best go about securing a competitive mortgage as a nurse.
Why do nurses struggle to get a mortgage?The main reason nurses can find it difficult to find a suitable mortgage provider is due to the typically unpredictable nature of their working arrangements and corresponding fluctuations in earnings.
As a nurse you may be paid a basic fixed salary, but work flexible shift patterns and pick up overtime to supplement your earnings. You may also hold two independent positions, one with the NHS and another through a private nursing agency.
This type of working can have a big impact on your income, which makes it hard for mortgage providers to determine your exact salary and affordability. This could result in not being able to borrow as much as you’d hoped, or even a mortgage rejection.
Can I get a mortgage as a nurse?Unless you go through a specialist, many lenders won’t take the time to understand the complexities surrounding the way a healthcare professional is paid.
Fortunately, we have a team of experts who are familiar with these more complicated situations, and access to lenders who are willing to be flexible with their lending criteria. We can help:
Nurses who regularly work overtime or variable shiftSome lenders may only consider a basic salary or are cautious of those whose work irregular hours. A specialist broker can present your situation to a suitable lender who will assess applications on a case-by-case basis.
Nurses on temporary or short-term contractsLenders can be wary of certain medical professionals such as nurses and locums who may have gaps in employment or do not have a steady, regular income.
Our team of advisors can provide banks and building societies with a full, comprehensive overview of your employment history so that they can make a fair appraisal of your financial situation.
Medical practitioners who are self-employed or work as a private healthcare professionalIncome paid in a way that is tax-efficient may make it difficult to provide a true reflection of your earnings. We work with lenders to present your case in such a way that your full earnings are taken into account.
Seeking specialised mortgages for medical professionals can present opportunities for trainee, newly qualified and student nurses, as well as those who have previously struggled to get a mortgage because of their job type, or other factors such as bad credit.
Are there NHS mortgage discounts for nurses?When you hear the term ‘NHS mortgage’, this generally refers to the way a mortgage broker packages your application.
While there aren’t specific nurse mortgage products, many lenders do specialise in loans for clinical staff. There are also a number of housing developer schemes that offer staff discounts and incentives to NHS employees.
Key worker mortgage schemes for nursesThe ‘Key Worker Living Programme’ was discontinued in 2019, but there are plenty of alternative affordable housing schemes geared towards nurses and other key workers.
First HomesFirst Homes was launched in June 2021 with the intent on assisting first-time buyers, specifically NHS staff and veterans, onto the property ladder by offering properties at a discount of at least 30% of the market price.
The scheme aims to help people who struggle to afford market prices in their local area, and follows on from the 95% mortgage guarantee scheme and the government’s ‘Own Your Home’ flexible homeownership campaign.
Help to Buy: Equity Loan (2021 - 2023)The Help to Buy: Equity Loan is in place to help first-time buyers (FTBs) struggling to save onto the property ladder with just a 5% deposit.
The government lends eligible borrowers up to 20% (40% in London) of the cost of a new-build home, which allows FTBs the opportunity to bulk their deposits, buy bigger properties and access better interest rates.
The loan is interest-free for five years, but after this time you'll be charged 1.75% on the outstanding amount as interest, increasing each year by RPI plus 1%.
Shared ownershipShared ownership is another government-backed scheme which aims to help those with low incomes and smaller deposits onto the property ladder.
Eligible applicants can purchase a share of a property, typically 25 - 75%, and pay rent on the remaining share. Later down the line you have the option to buy additional shares, often up to 100%.
Because buyers only have to secure a mortgage on the share of the property they’re buying in the first instance, it can be a far more affordable option.
Rent to buyRent to Buy is another government scheme designed to ease the transition from renting to buying a home by providing subsidised rent.
It’s offered by local authorities and councils who set an agreed sale price for a property, as well as a reduced rental rate which is payable in the time leading up to the purchase date.
Even if the value of the property increases in value during the period in which the applicant is paying reduced rent, they will still pay the original agreed amount.
How much can nurses borrow for a mortgage?
Most lenders use income multiples, varying between 3.5 - 5.5x your annual income, as a starting point to determine how much they are willing to lend.
Fortunately, nurses and other NHS workers are considered fairly low-risk due to their stable positions as healthcare professionals, and as such, many lenders will stretch the standard lending limit to 4.5x, with some offering up to 5.5 - 6x income mortgages in exceptional circumstances.
This table illustrates the impact different income multiple caps have on how much a nurse earning £23,000 a year may be eligible to borrow:
While we’ll do our best to match you with a lender who will consider 100% of your nurse income, lenders will also take a number of other variables into consideration when determining your affordability and how much they are willing to lend, if at all:
How much you earn in a year (if this fluctuates, an average may be taken across the previous two years).
The regularity and predictability of your income.
How much your outgoings are (including any outstanding debts).
Your credit history.
The type of property you want to buy.
Generally speaking, the higher your outgoings in relation to your income, the less you will be able to borrow.
Mortgage providers assess affordability by looking at your debt-to-income ratio, which is calculated by dividing the total sum of your monthly outgoings by your monthly income, multiplied by 100 to get a percentage.
Generally, a DTI of 36% or below is deemed ‘excellent’, 43% or below ‘good’, 45% ‘acceptable’ and 50% the absolute maximum that will be considered - for typical lenders.
If, as an example, you earned an average of £2,200 a month from your basic NHS salary plus bank work, and your outgoings (rent, bills, car finance, etc) came to £920, your DTI would be 42%, which would put you in good stead with many lenders.
Can nurses with bad credit get mortgages?
If you’re a nurse struggling to find a mortgage due to poor credit history, our team is best placed to advise as they know which lenders are most likely to approve you - helping you avoid a rejection and further damage to your credit file.
When it comes to bad credit, lenders are usually more concerned about how long ago the instance occurred, and the action you’ve taken since to improve your financial situation.
Often it’s possible to find affordable mortgage deals for bad credit applicants - although this will depend on the severity of the issue, as lenders can be reluctant to lend to those who have received a CCJ, IVA or bankruptcy.
For more information, take a read of our guide to NHS mortgages and bad credit, or if you’d rather speak to someone you can ask one of our bad credit brokers.
Speak to an advisor for the best nurse mortgage rates
At The Mortgage Hut, we have access to over 100 highstreet lenders and specialist mortgage providers, and established relationships with those who are sympathetic towards borrowers with unusual income arrangements.
We can recommend lenders with flexible criteria who will consider offering mortgages to nurses who supplement their basic salaries with overtime and bank work, as well as those who are self-employed or work solely through agencies.
We’ve helped hundreds of medical professionals secure residential, buy-to-let and commercial mortgages, and can also provide assistance to those with low incomes, small deposits, or bad credit history.
Not only will we do our best to keep your requirements and individual circumstances front of mind when matching you with appropriate lenders, we work on your behalf so that you don’t have to take time out of your working day to negotiate with mortgage lenders.
Call us on 02380 980304 or submit an enquiry via our online form, and a member of the team will be in touch to learn more about your nurse mortgage requirements.