As a musician, your unique income structure often comes with a set of challenges – especially when it comes to securing a mortgage.
Traditional lenders might struggle to understand the mix of gigs, royalties, and teaching fees that form your financial picture.
The good news, is that there are lenders that are happy lending to musicians, you just need to know where to find them!
Understanding musician mortgages
Your income as a musician might include live performances, session work, royalties, music lessons, and maybe even merchandise sales.
While this diverse income stream shows your dedication and talent, it can look unconventional to traditional mortgage lenders.
However, lenders specialising in mortgages for self-employed individuals understand this dynamic. They’re looking for a consistent pattern of income, even if it comes from multiple channels.
While there isn’t actually a ‘musicians mortgage’, there are brokers and lenders that understand how you earn your living and appreciate that it is often a little bit unpredictable.
It’s rare for a musician to have a simple annual PAYE salary to show a prospective bank.
While some of your income could come from an employed position, almost all musicians have some form of variable or self-employed income.
It’s the mixture of sources along with the varied level of earnings that prevents many lenders from approving loan applications. They need things a bit tidier.
The brokers that we work with have a great deal of experience helping musicians, writers, singers and actors.
They ‘get’ your style of work, the travelling, unconventional working hours, and the need for discretion.
Eligibility criteria
While lenders will be empathetic to how you earn your living, there are still some basic details that all borrowers need.
The basic mortgage eligibility criteria:
- Minimum age 18
- Good credit score
- At least a 5% deposit
- Low debt to income ratio
- Good affordability
Don’t forget that the lender needs to approve you and your property.
The reason we mention this is that not all properties are acceptable to all lenders. The most obvious aspect to watch out for is how the property is constructed.
If it is made from concrete, or has a steel frame, then you will find it more difficult to secure a mortgage. Equally, if the property has a recording studio or an annex then a specialist lender may be required.
Read more about non-standard construction mortgages
Pop in a few contact details and a qualified broker will call you back when convenient.
Types of mortgage
You will have the full range of mortgages available to you. Although the specific choices will differ between lenders.
Residential
Residential mortgages are for the home that you live in. A purchase mortgage will allow you to buy a property and a remortgage switches an existing mortgage to a new lender.
Options are available for first time buyers, guarantor mortgages and JBSP mortgages.
Investment
Investment property mortgages would be for:
Interest rates
The actual rates will always depend on the lender but the main interest rate options are:
Fixed rate: Fixed interest rate mortgages are available in a range of different terms, usually between one and ten years. Once the fixed rate starts your monthly payments won’t be affected by interest rate changes.
Tracker rate: A tracker rate mortgage is a type of variable rate mortgage, which means that the interest rate you pay can go up or down in line with the Bank of England’s (BoE) base rate. Unlike fixed-rate mortgages, a tracker rate can change so the amount you pay each month could go up if interest rates rise.
Variable rate: Variable rate mortgages are linked to the lender’s Standard Variable Rate (SVR). The interest rate you pay will be set by your lender and won’t necessarily rise or fall in line with changes to the Bank of England Base Rate. Your repayments will change when the SVR changes.
Repayment methods
The repayment method is the way that you will pay the mortgage back. There are actually three different options but not all of these will be permitted by your lender.
- Repayment – The traditional capital and interest mortgage where you pay back some of the mortgage each month.
- Interest only – With an interest-only option you only pay the mortgage interest each month and nothing towards the capital sum.
- Part and part – A part and part mortgage is a combination of 1 & 2 above.
Mortgage term
The term is the number of years that your mortgage is setup for.
Traditionally, the standard mortgage term has been 25 years. With rising mortgage and housing costs borrowers are now choosing longer terms, such as 30 and even 40 years. These are sometimes called marathon mortgages.
The term will directly affect the monthly cost of a repayment mortgage, the longer the term, the lower the repayments.
How much can a musician borrow
You will normally be able to borrow a maximum of 4-5 times your provable earnings.
For your self-employed income this is after expenses (net) but before personal tax. If you have an element of employed income then the gross figure is used.
However, several factors influence how much you can actually borrow:
Income: Your salary or self-employed income, ideally demonstrated over several years, is the primary factor. Lenders may also consider dividends, potential bonuses, retained profits or projected income growth.
Deposit: The larger your mortgage deposit, the lower the loan-to-value (LTV) ratio, potentially unlocking better interest rates and increasing the amount you can borrow.
Credit Score: A strong credit score indicates financial responsibility and may result in lenders being willing to lend you more.
Affordability Assessment: Lenders will thoroughly assess your income and outgoings (including other debts) to determine how much you can comfortably afford to repay each month.
QUICK EXAMPLE
Earnings of £50,000pa multiplied by 4 gives a mortgage of £200,000, or multiplied by 5 gives a mortgage of £250,000.
Affordability
All lenders will perform some affordability checks. This looks at how you would be able to afford the new mortgage monthly repayments.
They take your earnings as a starting point but then include what you spend your income on. This will include living and travelling expenses as well as debt repayment and other fixed commitments.
If you are over committed, the lender may decline the application or offer a lower mortgage amount.
Occasionally your income arrangements can be the problem. Some lenders may not include certain elements of your income into the calculations, or only use 50% instead of 100%.
This can be avoided by always using a mortgage adviser to find the right lender for your style of income.
How much do mortgages cost?
The cost of a mortgage is affected by the loan size, the interest rate and the loan term.
You can use our mortgage calculator to accurately calculate the monthly repayments.
These pages may also be of interest:
Average Mortgage Payments: Understand what homeowners across the country are paying and how property location can affect your mortgage outlay.
Mortgage Repayments Guide: Learn more about the monthly cost of different mortgages, including repayment and interest only.
How much do you need to earn: We explain mortgage affordability and give a guide on how much you need to earn.
Large mortgages
Large mortgages for high value properties, HNW & UHNW individuals. When your main borrowing exceeds £1m you will benefit from using a more experienced and discreet mortgage service.
Our advisers negotiate mortgages on multi-million-pound homes, secondary residences and property portfolios.
Private Bank Mortgages
Are you a high-net-worth individual looking for a mortgage lender that understands your complex requirements and unique property needs?
Private banks can provide far more than the rates advertised by high street lenders.
Bespoke private bank mortgages offer greater flexibility to suit your finances, taking into account your wealth as well as income when assessing your ability to fund your mortgage.
How to apply
Choosing the right lender is important as not every lender offers mortgages suitable for musicians.
Before applying, ensure you have the necessary paperwork.
- Employed:
- Payslips (last 3-6 months) to verify your income
- P60
- Employment contract to demonstrate job security
- Self-Employed:
- Certified accounts (ideally the last 3 years, though some lenders may consider less)
- SA302 tax calculation forms to show your income history
- Contracts
Partnering with a mortgage adviser who specialises in financing for musicians can be a game-changer.
It means they know where to look for lenders who cater to your unique needs instead of wasting time with those who may not fully appreciate your situation.
Before formally approaching a lender, you may want to test the water with a decision in principle (DIP). This is a mini application, that doesn’t affect your credit file, but does give a strong indication of how a lender feels about you.
It can then give you the confidence to move on to a full application, knowing what your borrowing limit is.
Whichever way you choose, your mortgage adviser will be there to help you.
Improve your chances of success
Getting yourself organised and ‘mortgage ready‘ before applying for a mortgage is one of the best things you can do.
Whether you are buying your first home or thinking of moving somewhere new, there are a number of ways that you can improve your situation, which will also speed up the mortgage process.
It’s really important to allow yourself enough time to gather everything together.
Credit status
Get a copy of your credit report. The report will show all sorts of credit related information and you need to make sure that it is all correct. Any errors need to be fixed.
Mortgage broker
Speak with a mortgage broker, they will be able to see how well you ‘fit’ a lenders criteria and can make practical suggestions and tips on how you can improve your situation.
Decision in principle (DIP)
Ask your mortgage adviser whether a Decision in Principle, or DIP, would be a good idea. Most first time buyers will benefit from one. A DIP or AIP will provide some extra confidence in your ability to borrow the size of mortgage you need.
Electoral roll
One factor that can greatly impact your mortgage application and creditworthiness is your presence on the Electoral Roll. The Electoral Register, is a comprehensive record of eligible voters in the United Kingdom. Am I on the Electoral Register?
Financial Associations
If you have previously applied for any type of credit with another person, the Credit Reference Agencies (CRA) will have ‘linked’ you to the other party. If an old or irrelevant financial association is still on your report, it is important to remove it.
Paperwork
Get your paperwork in order. The main documents needed are: Driving licence, Passport, Utility bills,
Last three/six payslips, Most recent P60, Company accounts, Self-assessment returns, SA302, CIS vouchers, Bank statements, Proof of deposit
Pay your bills
on time. (always)
Don’t apply
for any more credit before or during the mortgage application process. This could seriously damage your chances of being approved.
Credit limits
Stay well within your credit limits and if possible, reduce any debts held on credit cards or store cards.
Mortgage broker
Contact an experienced mortgage broker. Oh, we said that already. Don’t forget!!
How a broker can help
Independent advice
Specialist lenders
Moving home
Remortgage
Capital raising
Bad credit
Debt consolidation
Second property
The best way to find and compare deals is by using a qualified whole of market mortgage broker. An experienced broker will do the research on your behalf, finding your ideal mortgage from over 100 lenders.
They will understand your industry, your earning structure and the lender’s that favour careers like yours.
Searching for your own mortgage is very time-consuming and can also be quite confusing. While some people are happy to do this themselves, others recognise the advantages of using a qualified broker.
- What is a whole of market mortgage broker?
- What does a mortgage broker do?
- Do mortgage brokers charge a fee?
- Why should you use a mortgage broker?
- Why would you use a mortgage broker instead of a bank?
- How do mortgage brokers get paid?
- Mortgage broker vs Bank: Which is better for you?
- What are the advantages of using a mortgage broker?
- Ten Reasons to Use a Mortgage Broker
Yes, but it’s important to find lenders who understand the fluctuations. Focus on demonstrating consistent annual income over multiple years through tax returns and other income records.
While most lenders prefer at least two years of self-employment history, some might consider your application with one year of records and proof of previous consistent employment. A larger deposit can also strengthen your case.
You might find this interesting: Self employed mortgages with 1 years accounts
While a good credit score is ideal, some lenders specialise in helping borrowers with less-than-perfect credit. Focusing on improving your credit over time is always beneficial.
You might find this interesting: What credit score is needed for a mortgage?
Generally, a deposit of 10% or more demonstrates financial commitment. However, even smaller deposits might be possible with the right lender and a strong financial history.
You might find this interesting: Guide To Deposits
No. Many musicians have income from teaching or side hustles. Lenders will look at your overall income picture from all sources.
Yes! Consistent royalty statements, alongside other income proof, can demonstrate earning potential to lenders.
Not exactly, but there are certain lenders who have taken the time to understand the life of a musician and how they earn their income.
Yes, as long as your income can be reliably proven. Lenders understand that touring is a significant part of a musician’s income.
A mortgage broker specialising in musician mortgages can save you time, find better options, and simplify the process significantly.
You might find this interesting: Mortgage broker vs Bank: Which is better for you?
Typically, you’ll need at least two years of tax returns, bank statements, proof of any additional income sources (royalties, teaching), and identification. Your broker will provide a detailed list.
You might find this interesting: Applying For A Mortgage
Yes, mortgages are available for first-time buyers.
We work with one of the largest and most experienced independent mortgage brokers in the UK.
They have been experts in the mortgage industry for over 45 years, so they understand the challenges that clients can face when looking for a mortgage.
With qualified advisers based across the UK, they have the experience and expertise to help guide you through the complex process of buying a house, remortgaging, raising bridging finance or investing in the property market.
Fully FCA regulated, they have more expertise across more lending solutions than any other broker and have specialist teams in place to work with clients through every stage of their journey.
To get started please call us on 0330 030 5050 so we can match you to a specialist broker, or use the form below.
