If your main job is on a zero hours contract and you are thinking about buying a property, you are probably wondering whether you will be able to get approved for a mortgage.
Similarly, if your employment has changed to a zero hours contract and you are coming up to the end of a fixed mortgage term, it may be more difficult to find a new mortgage product.
However, there are specialist mortgages available to meet the needs of zero contract hours employees. We explain how the assessment process works and how you can improve your chances of getting your mortgage approved on a zero contract hours income.
What is a zero hours contract?
A zero hours contract is a flexible work agreement between an employer and employee, with no guaranteed number of working hours. Employers who require a flexible approach to staffing often have zero hours contracts to adjust around seasonal demand. For example, they might require a lower number of hours for parts of the year but require employees to work a higher number of hours during busy periods.
From an employee perspective, hours are sometimes unpredictable, with fluctuating income. This is why it is often difficult to find a mortgage deal if you have a complex income based on this type of employment.
Can you get a mortgage on a zero hours contract?
While the mortgage options will be more limited, using a specialist mortgage broker can help to find a suitable mortgage product on zero hours contract income but certain criteria will need to be met.
On standard mortgages, lenders assess whether applicants have a steady, guaranteed income as part of their risk assessment. There is an estimated 1.17 million people now on zero hours contracts in the United Kingdom and the number of workers on zero hours contracts has quadrupled since 2012.
Therefore, many lenders are taking a more flexible approach to assessing affordability, to provide mortgages for this growing population of zero hours contract employees.
