Getting a Mortgage on a Temporary Work Contract
Are you an agency worker or on a temporary contract and looking for a mortgage? Read our in-depth guide for everything you need to know.
Firstly, what is your employment status?
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Author: Pete Mugleston - Mortgage Expert, MD
Updated: December 14, 2021
It’s quite normal to think if you’re employed on a temporary contract or work through an agency then your irregular income patterns will make it difficult to get a mortgage, but that doesn’t always have to be the case.
This guide looks at how you can get a mortgage if you work on a temporary basis and the steps you can take to make sure your application has the best chance of success.
The following topics are covered below...
Can you get a mortgage on a temporary contract?
Yes, of course you can. All mortgage lenders are looking for stability when they review applications.
They want to be confident that you can afford the repayments.
The more evidence you can provide, the better your chances will be.
This is true whether you’re a salaried employee or self-employed and it’s also the case if you’re employed on a temporary basis.
The challenge is finding the lenders who have experience dealing with applications from temporary contract workers and whose eligibility guidelines provide the best opportunity of getting the mortgage you need.
A broker can help you with this, but before you get started, it’s a good idea to work out how much you could potentially borrow.
Try our contractor mortgage calculator below to get a clearer idea of this.
Contractor Mortgage Affordability Calculator
Our contractor mortgage calculator will tell you how much you can borrow, whether you work in an employed or self-employed capacity. Select your trading style below, enter the relevant details about your income and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on a multiple of 3-4.5 times your income, a standard calculation used by the majority of UK mortgage lenders. You should speak to a mortgage broker for bespoke calculations if you have been contracting for less than 12 months, your contract is coming to an end, or there is uncertainty around your long-term employment.
This is based on a multiple of 3-4.5 times your income, a standard calculation used by the majority of UK mortgage lenders. You should speak to a broker for bespoke calculations if you’ve been self-employed for less than 2-3 years, have declining profits or fluctuating income.
Some lenders would consider letting you borrow
This is based on 5 times your income, a calculation only some lenders are willing to offer. You may struggle to find a lender who will offer this income multiple to an employed contractor without the help of a broker, and you should seek advice from one regardless if there is any uncertainty around your employment situation.
This is based on 5 times your income, a calculation only some lenders offer. You might need a broker to access this salary multiple and should take advice from one regardless if you’ve been self-employed for less than 2-3 years, have declining profits or fluctuating income.
A minority of lenders would consider letting you borrow
Only a small number of options are available for employed contractors who want to borrow based on this salary multiple. Few UK mortgage lenders offer mortgages based on x6 income under any circumstances, and you’ll almost certainly need the help of a specialist mortgage broker who knows this corner of the market inside out to access them.
Only a small number of options are available for self-employed contractors who want to borrow based on this salary multiple, as few mortgage providers are willing to offer 6 times salary deals. You’ll almost certainly need the help of a mortgage broker to borrow this amount.
Get Started with an expert broker to find out exactly how much you could borrow.
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What are the eligibility requirements?
The criteria mortgage lenders adopt when reviewing applications will vary depending on the type of temporary contract you’re currently working under.
These can range from:
- Fixed-term contract
- Seasonal contract
- Agency work
- Short-term renewable contract
- Probationary contract
- IT consultant
The table below provides a snapshot of what lenders tend to look for and the types of evidence you’ll be asked to produce when you submit an application, depending on your employment status.
|Temporary contract basis||Length of current contract:||Evidence of earnings required:||Employment history:||Bank statements required:||Other supporting evidence (that may be) required:|
|Fixed-term||12 months continuous with same employer and at least 6 months remaining||Latest full month’s payslip / Copy of existing contract||2 years continuous service in the same employment sector / No more than 4-6 week break between contracts||Latest full month’s bank statement showing salary credited / Some lenders may ask for 3-6 months statements||Employer/ Agency written reference to confirm long-term employment
|Seasonal||Typically 6 months to cover peak periods||3 months payslips / last 2 years P60s / Copies of previous contracts over three year period||2-3 years work experience||Latest full month’s bank statement showing salary credited||Some lenders may only accept seasonal work as a secondary income source|
|Agency Work||12 months continuous with same employer and at least 6 months remaining||Latest 1-2 months Payslips / Last 2 years P60s||2-3 years continuous service in the same employment sector||Latest full month’s bank statement showing salary credited||Some lenders may require a written statement from Agency confirming future employment opportunities|
|Short-term renewable||6-12 months continuous employment||Latest full month’s payslip / Copy of existing and previous contracts||2-3 years continuous service in the same employment sector||Latest full month’s bank statement showing salary credited||Employer/ Agency written reference to confirm long-term employment
|Probationary||6 months continuous employment||Latest 1-2 months Payslips / Last 2 years P60s||2 years work experience in a similar role||Latest full month’s bank statement showing salary credited||Some lenders may ask for 3 months payslips and employer reference*|
|IT consultant||Usually one year in total (can be made up of two six months contracts or three four month contracts, for example)||Latest 1-2 months payslip / Copy of existing and previous contracts||2 years work experience in a similar role||Latest full month’s bank statement showing salary credited / Some lenders may ask for 3-6 months statements||Some lenders will treat as self-employed, particularly if working on multiple contracts at same time and/or set up as a LTD company|
* = click the link to find out more about how probationary workers can secure a mortgage
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How to get a mortgage if you’re an agency worker or on a temporary contract
As you can see from the information outlined in the table above, getting a mortgage if you’re employed on a temporary basis, whilst not completely straightforward, is certainly possible.
In addition to gathering together all the evidence you’ll need to support your earnings history, there’s a number of other steps you can take to boost your chances of success.
1. Save as much deposit as you can
The higher your deposit, the less you’ll need to borrow.
As a result, your application will likely attract a larger number of lenders and can make a real difference when they assess your ability to meet the repayments.
Anything approaching 15%-20% is a good starting point. Building up a large deposit does take time, so try and save up as much as you can, whenever possible.
2. Speak to an experienced mortgage broker
Rather than trying to search for the lenders who will look at your application, the smarter move is to enlist the help of an experienced mortgage broker first.
They will already know which mortgage lenders are better placed to consider an application from someone who works on a temporary contract.
Your broker will also know what supporting evidence you’ll need and help you collect this information together.
The advisor-matching service we use is designed to select a broker with the right experience and knowledge to help with your specific circumstances.
If you get in touch we can arrange for an advisor to call you who has previously dealt with situations like this.
3. Check your credit history
Keeping a regular check on your credit score is good financial practice and is something everyone should do, regardless of your employment status.
Making sure your credit history has a clean bill of health will add a lot of credence to your mortgage application.
You can receive regular credit report updates from websites such as Clearscore and Experian, normally on a fee-free basis.
4. Applying with a partner
If you have a partner, applying on a joint basis can usually add more strength to your overall application, depending on their employment status.
This would certainly be the case if they have a solid employment history and healthy credit score.
Your broker will be able to advise both of you on what proof of income will be required and which lenders would look more favourably on your application.
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Get matched with a broker who specialises in mortgages for temporary workers
If you’re a temporary contract worker, getting a mortgage can be tricky.
Trying to plough through the process on your own, with no help or guidance, can make it even harder. This is where we can help.
The advisors we work with have a rich and varied skill-set and can bring in-depth experience and knowledge to a range of different scenarios, including circumstances such as this.
They can make a tough process much more straightforward.
If you get in touch we can arrange for a mortgage broker to speak with you who has previous experience of helping people in the exact same situation.
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Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!