Many mortgage lenders are happy to offer enhanced mortgage terms to borrowers in professional jobs; that could make it easier and cheaper to secure a home loan.
Mortgage providers like lending to professionals. The structured career path in many professions makes it easier for them to assess your earnings, both today and in the future, particularly since the time and resources you’ve invested in qualifying make it less likely you’ll change career. Professional jobs also tend to be more secure – and if you do need to move, your professional qualifications increase your chances of getting another role.
This is why people working in a number of careers may qualify for a professional mortgage. A professional mortgage is not a different type of loan; rather, it’s a standard mortgage that comes with enhanced terms or reduced costs compared to what the lender would be prepared to offer other borrowers. The fact the lender regards you as a less risky proposition enables it to take this view.
Cheaper and more flexible
In practice, professional mortgages may differ from conventional products in several important ways. Cost is definitely part of the equation – you may qualify for a lower rate of interest on your loan, or reduced fees and charges. This can help with affordability.
In addition, lenders may be prepared to be more flexible. For example, with some professional mortgages, you can borrow up to six times’ your annual salary, particularly if you’re younger and have qualified within the past five years. Normally, lenders are reluctant to offer more than four times’ salary, but where they have a good idea of how your pay is likely to increase in the coming years, they feel more comfortable about lending more.
It may also be possible to borrow against income associated with your work that other lenders would not be prepared to consider. If your end-of-year bonus is relatively predictable, say, at least up to a minimum level, you may be able to use this as part of your professional mortgage application.
Professionals may also find that lenders do not expect them to put up the same levels of deposit as other borrowers. They may be prepared to lend to you even if you only have a small deposit – say 5% of the purchase price. And while many mortgages offer cheaper rates to borrowers with larger deposits, the thresholds to qualify for those reduced prices may be lower on a professional mortgage.
Finally, professional mortgages can also work very well for foreign nationals working in the UK and looking to buy a property. Lenders are often anxious about lending to foreign nationals unless they’ve been in the UK for an extended period and have a visa that entitles them to continue living here well into the future. These requirements may be less stringent for foreign nationals who qualify for a professional mortgage.
Who qualifies?
There is no mortgage industry-standard definition of who is eligible for a professional mortgage. Different lenders take different views, both about the professions they consider as qualifying and about the enhanced terms and costs that they are prepared to offer.
In general, however, professional mortgages are potentially available to people working in the healthcare profession – including doctors, dentists, pharmacists, optometrists, nurses and vets – and in key worker roles such as teachers, police officers, civil servants, the military, and firefighters.
Those working in the traditional professions – architecture, accounting, the law, surveying and engineering – may also qualify for professional mortgages with some lenders. And some also consider people with high incomes or significant wealth – business executives, investment bankers, individuals with net worth of, say, more than £3m – for professional mortgages.
However, it isn’t always obvious which lenders offer what and to whom. And given the nuances of the professional mortgage market, it makes sense to source independent financial advice on the best possible mortgage deal for your individual circumstances.
Look for an adviser who understands your profession. At Chase de Vere, we specialise in looking after professional clients. As a result, we understand about the income structures and salaries in your profession, as well as the career path you may be on; we also know which lenders will consider your circumstances most favourably – and therefore offer you the best deal.
Content is correct at the time of writing and is intended for general information only and should not be construed as advice.