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Mortgage on a Zero Hours Contract

Full guidance about applying for a UK mortgage on a zero-hours contract, the lender affordability assessment process and the deposit and interest rates you might expect to pay.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2023-05-09
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Mortgage on a Zero Hours Contract

Zero-hours contracts can make it tough to find a mortgage, as lenders will need some assurances that you can keep up with the mortgage payments.

Let's run through how the assessment process works and how likely you are to find a mortgage lender on a zero-hours contract.

For more help finding a mortgage in this situation, contact the Revolution Brokers team on 0330 304 3040, or send us a message to [email protected].

How Do Zero Hours Contracts Work with Mortgage Applications?

A zero-hours contract means that your employer doesn't guarantee any minimum number of hours - but that you are only paid for the hours worked.

These contracts are becoming much rarer since they demand employees work on short notice but do not provide stability.

However, they can be ideal for people who are happy to accept ad hoc work, such as students or retirees who are flexible with their time and don't want the commitment of regular hours.

When it comes to a mortgage, lenders are often reluctant to lend against zero-hours work since they need evidence that you have the financial stability to keep up with your repayments.

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What are the Eligibility Criteria for a Zero Hours Mortgage?

Some lenders will be happy to lend to applicants on zero-hours contracts. They will assess:

  • How long you have been in the contract, usually with a minimum of one year.
  • Your experience in your role - if you have years of experience in your industry, for example, it's more likely you will continue to be offered hours.
  • The sector you work in. Sectors such as medical services and legal professionals are often more stable and comfortable to approve for a mortgage lender.

A lot depends on the lender. Some will automatically reject any zero-hour contract, whereas others will consider the circumstances before making a decision.

What Deposit is required for a Zero Hours Mortgage?

The minimum deposit is usually around 5%, although this depends on the lender and how risky they perceive your application.

If there are higher risk factors, such as bad credit, you might be asked for a 15% deposit or higher.

Which Lenders Offer Zero Hours Mortgages?

Many lenders will consider your application, but typically these will be specialist lenders rather than high street banks.

The best way to find a lender is to get in touch with the business finance broker team, who will help you decide on the ideal mortgage provider to apply to.

Can I get a Zero Hours Mortgage With a Bad Credit History?

Having bad credit will always make a mortgage application more difficult, but by no means makes it impossible. Lenders will usually ask for a higher deposit or quote higher interest rates to offset their risk.

They will look at what sort of credit issues you had, when they occurred, and whether you've since been able to get your affairs back in good order.

In some cases, a specialist bad credit lender might be the best option, depending on the severity of the problem.

One recommendation is to access a copy of your credit report before starting the application process. You can request any errors be corrected and see how long it is before credit issues are removed from your record.

This takes six years, so if you have, say, arrears that will be removed from your report in three months, it might be wise to delay your mortgage application for that period.

Can I Get a Buy to Let Mortgage on a Zero Hours Contract?

Potentially, yes. Lenders might require a minimum number of years of experience as a landlord or might need you to earn a minimum value per year - often from £15,000 to £25,000.

The rental income is the primary factor, so if the property generates more than enough rent to cover the mortgage costs, you might be able to find a competitive offer.

Expert Support with Zero Hours Contract Mortgages

Having a zero-hour contract might mean that you're less likely to find mortgage approval through a mainstream lender, but doesn't mean that there isn't a mortgage out there for you.

Give us a call on 0330 304 3040, or drop a message to [email protected] for an independent assessment of your circumstances and the best lenders to apply to.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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