You dedicate so much to your students – dealing with tight budgets and stacks of paperwork. Getting a great mortgage shouldn’t add to the workload.
Luckily, many lenders offer special mortgage deals designed with teachers in mind.
Your profession may give you access to:
- Larger loans: Qualify for greater borrowing amounts
- Easier affordability checks: More flexible assessments, considering your secure profession and income potential.
A mortgage broker specialising in teacher mortgages can simplify the process and locate these exclusive deals.
Let us put our expertise to work for you – you’ve earned the right to a hassle-free mortgage experience!
Understanding teacher mortgages
Teacher mortgages are part of a range of deals aimed at qualified professionals.
They’re not available from all lenders, only those that recognise the value in your profession and career stability.
These schemes can provide enhanced income multiples or lower deposit requirements.
The mortgages are offered by lenders that appreciate teaching and the education sector, and understand that teachers are less likely to experience problems gaining employment.
Eligibility criteria
Your dedicated work in education can offer unique advantages when applying for a mortgage. Let’s break it down:
While the best mortgage deals often go to experienced educators with outstanding credit, lenders welcome teachers at various career stages.
- Fully Qualified Teacher/Lecturer: Holding formal teaching qualifications is a significant factor.
- Teaching Assistant (NVQ Level 3): Possessing relevant certifications demonstrates skills and experience.
- Newly Qualified Teacher (NQT): Starting your career opens doors to mortgage possibilities.
- Supply Teacher (Established): A consistent work history strengthens your application.
- Nursery Nurse (NVQ Level 3): Your role in early childhood education is valued.
Don’t get discouraged if you don’t precisely fit the above profiles. These may also be potential routes to mortgage approval:
- Trainee Teachers: Lenders sometimes accommodate those currently completing qualifications.
- Retired Teachers: Your stable pension income creates potential access.
- Part-time or Agency-Based Work: Income history within the profession is still beneficial.
Each lender assesses your application individually. Besides your role, they consider:
- Affordability: Your overall income and spending patterns are crucial.
- Credit History: Maintaining a healthy credit score maximises your options.
NGT Mortgages
If you’ve recently completed your teacher training and obtained your first teaching job, the idea of buying a home may feel far away. However, it’s important to know that securing a mortgage as a Newly Qualified Teacher is possible.
In many cases a teaching career starts with a 12 month contract.
While your initial contract may be temporary, many lenders who specialise in teacher mortgages understand the high likelihood of NQTs securing permanent positions. They are often more flexible than traditional lenders when assessing your application.
Lenders will factor in the standardised starting salary for NQTs but are often willing to project your borrowing power based on potential earnings growth as you progress through your career.
Even before securing a permanent contract, consider seeking a pre-approval for a mortgage (called a ‘decision in principle‘). This demonstrates your potential lending power and can increase your credibility when making an offer on a property.
A mortgage broker familiar with teacher mortgages can be invaluable to NQTs. They can guide you towards the most understanding lenders, help you with the paperwork, and potentially secure better terms.
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.
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How much can a teacher borrow
Determining how much you can borrow for a mortgage as a teacher depends on several factors specific to your individual circumstances. However, the stability associated with a career in education will work in your favour.
Here’s a breakdown of what helps shape a teacher’s borrowing potential:
- Income Multipliers: Lenders use multipliers to determine borrowing amounts based on your salary. Since teachers have predictable salary scales and potential for advancement, the income multipliers applied could be higher than some other professions.
- Affordability: Your gross income may make you eligible for a certain size of mortgage, but you need to be able to prove that it is affordable.
- Contract-specific Considerations: Even if you’re on a fixed-term or a supply contract, lenders may look at your experience and qualifications to see if you’re likely to secure continuous employment. Lenders specialising in teacher mortgages tend to be more understanding in assessing temporary and supply contracts.
- Additional Sources of Income: If you have sources of income outside of your base teaching salary, some lenders may factor this in, potentially impacting your maximum borrowing amount. This could include earnings from supplementary tutoring.
As a rule, most lenders will calculate a borrowers maximum mortgage at 4.5 times gross income. A professional teacher mortgage could use a multiplier of 5 or 5.5 times gross income.
Let’s see how this works:
- £40,000 gross salary x 4.5 = £180,000
- £40,000 gross salary x 5.0 = £200,000
- £40,000 gross salary x 5.5 = £220,000
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.
How to apply
While the basic mortgage process is the same, there are some considerations for teachers depending on your employment status. Here’s what you need to know:
Newly Qualified Teachers (NQTs)
Clearly specify your NQT status on your application. Lenders understand initial contracts are often temporary but will assess your earning potential and career path. Be prepared to show that you’re on track to secure a permanent teaching position, as this will strengthen your application.
Supply Teachers
Providing consistent proof of income is key. Gather payslips, tax documents, or contracts covering several months or even years to demonstrate your earning history. Don’t underestimate your experience – lenders recognise the flexibility and value of supply teaching.
Retired Teachers
Your pension is a valuable income source – don’t let it be overlooked! Most lenders readily accept pension income as proof of financial stability.
Your mortgage adviser will be able to guide you on the paperwork needed, such as ID, proof of income and bank statements.
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 who is experienced in dealing with professional mortgages. 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
Your status as a professional may grant you access to exclusive rates or bespoke deals that general mortgage products don’t offer.
The best way to find and compare these specialist deals is by using a qualified whole of market mortgage broker. An experienced broker will do the research on your behalf, finding your ideal professional mortgage from over 100 lenders.
They will understand your industry, your pay 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.
To benefit from these specialised mortgages, you typically need to be employed in a recognised profession. Here are some of the key career paths that may qualify:
- Medical: including NHS doctors, dentists, and vets
- Legal: such as solicitors and barristers
- Financial: comprising roles like accountants and actuaries
- Education: for instance, teachers
- Engineering and Architecture: including civil engineers and architects
You will need to be fully qualified, registered and practising in your profession.
Certain lenders may also consider other roles if they involve comparable levels of professional qualifications or responsibility.
As a qualified teacher you should be eligible for standard mortgage products plus the enhanced professional teacher mortgages.
This gives you a greater choice of lenders and the ability to secure a great mortgage deal.
Teacher specific mortgages can also allow you to borrow more, with a lower minimum deposit requirement.
A mortgage broker familiar with teacher mortgages can be invaluable. They can guide you towards the most understanding lenders, help you with the paperwork, and potentially secure better rates.
Yes, professional mortgages are available for first-time buyers.
Supply teachers can get competitive mortgages, but you can face some challenges if you are on a temporary or zero-hour contract.
The best option would be to work with an experienced broker, and let them find you a lender that understands how a supply teacher’s income works.
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.
