NHS mortgage (A complete guide)

NHS mortgages are very common. But to be very clear, there actually isn’t anything like an “NHS mortgage” but rather it is simply a term which was formed due to many people asking for NHS mortgages. Some mortgage lenders now offer these NHS mortgages through incentives for NHS staff.

As an NHS staff, you will be able to apply for any mortgages on the open market.

Some mortgage lenders will offer discounts to current and past NHS workers as a way to entice them to their mortgage products.

 If you are an NHS worker with good mortgage affordability then you may be able to get an NHS mortgage to buy your property.

To be considered for an NHS mortgage you will usually need to be employed by the NHS on a permanent contract. The roles considered include:

GP surgeries

Ambulance Trust

Health Protection Agency

Mental Healthcare and Social Care Trusts

Primary Care Trusts

NHS Direct

National Blood Transfusion Service

Dental practices that have NHS body status

Other NHS trusts

Some mortgage lenders run NHS mortgage schemes but your position at the NHS will affect your eligibility for these mortgages.

Usually, all clinical staff are considered for all the NHS mortgage schemes which a mortgage lender may run but if you are a medical staff such as a dentist or doctor then you won’t be eligible. You will also not be eligible if you are a porter, in an admin role or a domestic position.

You should not that the NHS key worker scheme is no longer running but you may be able to find other affordable housing schemes from housing associations and mortgage lenders which may require smaller deposits, offer lower rents or mortgage rates.

What you need to get a mortgage on your own

If you are single or you simply want to get a mortgage on your own then this is very possible.

As long as you have a good credit score, a mortgage deposit and your salary meets the mortgage lenders mortgage multiple requirements then you may be able to get an NHS mortgage.

The alternative to getting an NHS mortgage alone will be to get a joint mortgage. The benefits of joint mortgages are of course the fact that you may be able to combine the mortgage affordability of more than one borrower meaning you could potentially build a mortgage deposit faster and get on the property ladder quicker.

What mortgage deposit do you need for an NHS mortgage?

When getting an NHS mortgage you may find out that the mortgage deposit requirement is the same as a normal residential mortgage but depending on the way you work and how your hours are allocated you may be required to put a bigger mortgage deposit down. 

The typical mortgage deposit you can be expected to pay when you are an NHS staff getting a mortgage or two people getting a joint mortgage is the same. Most mortgage lenders will require a mortgage deposit of 5% these days but some may request as much as 20% or upwards.

Example of a mortgage deposit which you may need to put down for an NHS mortgage:

You want to buy a house for £400,000

The mortgage lender wants a mortgage deposit of 20% and due to that a loan to value of 80%.

This means you will need a mortgage deposit of £80,000. This may seem too much for you to save at first but you may have some help.

If you are planning to get a mortgage alone then it is better to start your mortgage planning far in advance as it may take you longer to save when it is just you saving. If you have family members or friends who may be able to help you with their savings then you may have some family deposit mortgage options such as the family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.

These mortgages act like a form of guarantor mortgages but they aren’t exactly. You may still be able to find some guarantor mortgages which could reduce the strain of a mortgage deposit for you.

Aside from the family springboard mortgages your family members or friends could also simply gift you a mortgage deposit but not all mortgage lenders are keen on lending to borrowers who have been gifted their mortgage deposit and the ones who accept this may insists in a gifted deposit letter which ensures that the gift is indeed a gift and not a loan which may have some claim on the first charge mortgage if the mortgage lender ever had to reposssess the property.

If you aren’t able to find any family members who may be able to help you then there is help from the Government with its first-time buyer and home mover government schemes

Government help for NHS mortgages?

If you are an eligible first-time buyer or home mover then you may be able to get an NHS mortgage with a government scheme. You can use the scheme alone or with multiple people but the scheme rules will still apply.

If you are a first-time buyer then you will likely need to sign a first-time buyer declaration

Example:  if the maximum property price on a property is £500,000 then even if there were two of you the maximum property price the government scheme will accept is £500,000.

Some of the Government schemes you may be able to use with a NHS mortgage include:

• Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy- allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

How much can you borrow for an NHS mortgage?

When working out how much you may be able to borrow if you are borrowing alone the first thing you may want to do is check the mortgage lenders mortgage multiple.

The mortgage lenders mortgage multiple will be the first indication of if the mortgage lender may be willing to lend you the amount of mortgage you want based on your income.

Mortgage multiples are essentially a number by which the mortgage lender multiplies your annual income by to let you know the maximum they will be able to lend to you. When you apply for a mortgage in principle a mortgage multiple is likely what is used as a first indication of if a mortgage lender will lend to you.

Different mortgage lenders have different mortgage multiples so comparing for every mortgage lender may be hard and this is why a mortgage broker who may have experience of the mortgage multiples being used by a mortgage lender.

Mortgage multiples can be a bit misleading as when you get a mortgage in principle you may think that this is some guarantee that you are going to get a mortgage but it isn’t.

After you have found a property which you want to buy, you will usually then go back and make a full mortgage application so the mortgage lender can give you a formal mortgage offer.

At this point, the mortgage lender will request your financial documents such as:

Your p60 tax return

Your SA302 tax calculation form if you are self-employed

Bank statements for at least 3 months

And 3 months worth of payslips

Your identification documents

With all this information the mortgage lender will analyse your finances to see how much you have in disposable income per month and if this can cover the cost of your monthly mortgage repayments.

If you can’t cover the cost of your monthly mortgage as you are a single borrower then you may want to consider finding a co-borrower who can split the mortgage deposit with you or who will split the monthly mortgage repayments with you and apply for a joint mortgage.

You should seek independent legal advice when doing this as you may need to go into a tenants in common agreement, a cohabitation agreement and have a declaration of trust agreement if necessary.

When getting a joint mortgage you should ensure that your co-borrower is also eligible as a first-time buyer if you intend to use a home buying government scheme as an eligible first-time buyer. If your co-borrower isn’t an eligible first-time buyer then you won’t be eligible for any of the governments home buying schemes which require you to be.

This is also the case for the first-time buyer stamp duty relief.

Can you get an NHS mortgage with supplementary income?

When getting an NHS mortgage you may be able to increase your mortgage affordability with supplementary income. Supplementary income could be overtime, bonuses, stipend income and benefits.

Mortgage lenders don’t all accept supplementary income but those who do may only accept a percentage of it rather than all of the supplementary income.

If most of your earnings as an NHS staff are of supplementary income then you may need to find a mortgage lender who is willing to lend you the amount you are after and also accept most of your supplementary income.

Some mortgage lenders may also accept benefits whilst some will not accept benefits. If benefits play a significant stake in your income then you will want to find a mortgage lender who accepts a higher percentile of benefits as income.

Supplementary income could include:

Pension income

Investment Income

Overseas earned income

Maintenance Payments

Rental Income

Bursary

Stipend

• Attendance Allowance benefit
• Carer’s Allowance benefit
• Child Benefit
• Child Tax Credit benefit
• Disability Living Allowance (DLA)
• Incapacity Benefit (IB)
• Industrial Injuries Benefit (IIB)
• Maternity Allowance benefit
• Pension Credit benefit
• Severe Disablement Allowance
• Widow’s Pension benefit
• Working tax credit benefit

How many debts can you have when applying for a mortgage alone?

If you are applying alone for a mortgage as an NHS staff then the number of open debt accounts the mortgage lender may be willing to see open on your credit file may be limited.

Mortgage lenders may like to see that people could keep up on their debt obligations by paying back their debts on time but too much debt may not be good for anybody.

Usually, before a mortgage lender will give you a mortgage offer they will take a deep dive into your credit file to see how many debt accounts you have open and your repayment history on the debts.

As an NHS staff, the mortgage lender may focus more on your disposable income after your committed expenditures which includes your debt.

Some mortgage lenders may prioritize the fact that you can make all your debt repayments each month and still have enough disposable income to cover your monthly mortgage repayments.

Other mortgage lenders may look at the current amount of debt accounts you have open as a single borrower and determine that they are too many.

Can you get an NHS mortgage with bad credit?

Getting a mortgage as a single borrower with bad credit may be difficult as mortgage lenders may usually want to lend to borrowers who have a good credit score and have shown a good repayment history on all their previous debts.

There are however mortgage lenders who will offer an NHS mortgage to a borrower depending on what type of bad credit was and what the circumstances were.

If it was a CCJ which was satisfied and is a certain age then some mortgage lenders may be willing to lend. Other mortgage lenders may lend if the CCJ was a maximum amount.

When looking to get a mortgage with bad credit the requirements from different mortgage lenders will differ and a bad credit mortgage broker may be able to assist you in getting an NHS mortgage.

Bad credit could include:

A CCJ

An IVA

A debt management plan

A default

A bankruptcy

A home reposession

Can you get an NHS mortgage if you are classed as self-employed?

Getting an NHS mortgage if you are self-employed is certainly possible but most mortgage lenders may want to see your accounts for 3 years at the very minimum although there may be mortgage lenders willing to offer an NHS mortgage with less than 3 years worth of accounts but at least 12 months.

The documents you may need as a self -employed mortgage include:

Your P60 tax return

Your SA302 tax calculation form

Your company accounts if you work through a limited company

You may find using the services of a mortgage broker who has experience dealing with self-employed borrowers.

Other considerations a mortgage lender may take into account when offering an NHS mortgage to a self-employed are:

The Trading style: are you drawing a salary from a company or do you have a claim over a share of retained profits. These could make a significant difference on how much you may be able to borrow.

Your experience: how long have you been self-employed and what is your working history.

Can you remortgage an NHS mortgage?

For you to be eligible for a remortgage you will need to show the mortgage lender that you can keep up payments on your remortgage.

Can you remortgage into one name? (take someone off a mortgage)

Yes, you can remortgage to take someone off the mortgage but this is essentially getting a new mortgage on the property and the other person consenting to be taken off. It doesn’t have to be done with the same mortgage lender.

If you choose to stay with the same mortgage lender there may be some advantages like avoiding early repayment fees and in some cases, you may be able to stay on the same mortgage product but ensure you check it is still competitive.

Whether you are staying with the same mortgage lender or you are remortgaging to a new mortgage lender you will need to meet theirmortgage affordability requirements and prove that you can make the mortgage repayments on your own.

When remortgaging and removing someone from the mortgage there may be some costs due to the transfer of equity process. If you change to a new mortgage lender there may be fees associated with getting a new mortgage as well to consider.

You should also seek tax advice as there may be some stamp duty considerations to take into account/

What to do if you have been rejected for an NHS mortgage?

If you have been rejected for an NHS mortgage then the first thing you should know is that it isn’t the end of the world and you may still be eligible for a mortgage with a different mortgage lender.

Your mortgage broker will look to find out why the mortgage lenders have rejected you for an NHS mortgage and what you can look to do to increase your mortgage affordability before applying for a mortgage again.

It may be the case that you aren’t eligible for a mortgage at the moment and may need to save more or find a co-buyer to reduce how long it takes you to get on the property ladder but you may want to first consult your mortgage broker or the mortgage lender to get a full understanding of why you were declined for a mortgage.

Are there any benefits with joint mortgages than getting one yourself?

When comparing if to get a joint mortgage or get an NHS’s mortgage on your own you may see some advantages straight away.

Getting a joint mortgage will usually mean that you are able to get on the property ladder much quicker as you can pull the resources of two people rather than one person towards the mortgage deposit and the monthly mortgage repayments.

Joint mortgages may have some extra costs than a NHS mortgage as you may have to seek legal and tax advice(in some cases).

Joint mortgages also mean you may be able to ring-fence your ownership and mortgage deposit contribution to pass to your children or kids in your will. This will usually have to be through a tenants in common agreement and may require you to seek independent legal advice.

NHS mortgage calculator

Most mortgage lenders who offer NHS mortgages offer NHS mortgage calculators which can give you an idea of how much you may be able to borrow as an NHS staff but these calculators don’t show a true reflection of your mortgage affordability. You should speak to a mortgage advisor from the mortgage lenders mortgage department or an independent mortgage broker who may be able to advise you on all your NHS mortgage options in the market.

How to apply for an NHS mortgage?

To apply for an NHS mortgage you may want to first contact a mortgage broker.

Mortgage brokers are important as they can access NHS mortgage products from across the whole of the market in some cases. This could be over 11,000 NHS mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which NHS mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously. Once you have found a home you want to buy the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your NHS mortgage with the help of a conveyancer.

NHS mortgage FAQs

In this brief guide, we discussed how to get an NHS mortgage. If you have any questions or comments please let us know below.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.