Can I get a mortgage on a zero-hours contract? Advice and options

A record number of working age people remain on zero-hours contracts in the UK – 1.1 million according to this research from Lancaster University’s Work Foundation. With no ties to a specific employer and no financial stability, how you’ll meet milestones like purchasing a property may carry a huge question mark as a zero-hours worker.

In this blog post, we shine the spotlight on zero-hours mortgage applicants and the likelihood of achieving that home buying dream.

Am I classed as a zero-hours worker?

A zero-hours contract is essentially a work agreement with an employer that offers no guaranteed minimum hours. This means, as a zero-hours worker, you are only paid for the hours you actually work, and the employer isn’t obliged to offer these hours as regular shifts.

Zero-hours work is more common in some industries than others as Good Housekeeping explains:

“Zero-hours contracts are more common in certain types of work than others. A relatively small percentage of the workforce (3.4%) work on zero-hour contracts, but they are more common across certain sectors including care work, hospitality and delivery driving. For many workers, you are paid for the work you do — for example, the number of parcels you deliver — rather than the number of hours you work.”

What does this mean for my finances?

While zero-hours arrangements offer flexibility for both employers and workers, they can lead to income uncertainty and make it harder for individuals to plan financially.

Essentially, having a zero-hours contract can make your finances more unpredictable with your income rising and falling at various stages. As a zero-hours worker, you may struggle to build savings, budget confidently and access credit.

How will this affect my mortgage application?

You may find it more challenging to access credit, loans and mortgages as a zero-hours contract worker. As a rule of thumb, lenders want to see proof of steady earnings and stability that will help you fulfil the monthly repayments long into the future.

That being said, the flexibility of a zero-hours role could just help you prepare your finances. The financial and lifestyle freedom can help balance work with study, caring and other commitments, while the busier periods could enable you to save more than a worker with a set salary.

Is it possible to get a mortgage as a zero-hours worker?

Yes! It may be more difficult to obtain finance, but it isn’t impossible. More lenders than you might think are open to applications from zero-hours workers. A successful mortgage application is all about finding the best mortgage lender for your circumstances and getting the timing just right.

Lenders will want to see at least 12 months of consistent income, even if it’s not guaranteed with your contract. They also prefer applicants with a continuous employment history. You’ll need to provide bank statements, payslips and other documentation to support your mortgage application. A healthy credit score, decent deposit and good overall financial health will also help.

Any tips for securing a zero-hours mortgage?

Consulting a mortgage broker is what we’d recommend! Here at The Mortgage Bureau, we assist people from all walks of life, including individuals with zero-hours contracts, and we know the lenders who can help.

With our support, you can increase your chances of mortgage approval, secure the finance you need to proceed with your purchase, and look forward to life in your brand new home.

Find your local mortgage advisor today to discover your mortgage options as a zero-hours worker.