Teacher mortgages

Many teachers, especially supply teachers and those on fixed contracts frequently have difficulty securing a mortgage. This is because mainstream lenders will sometimes consider their roles as non-permanent job positions. In order to secure a mortgage to buy a home you will need to use a lender who will consider each person’s individual circumstances.

Getting a mortgage as a teacher

Many teachers start new roles on 1-year contracts with a view to renewing after this time. In addition, NQT (Newly Qualified Teachers) are also typically on a 1-year contract. Without a permanent job role, many lenders will instantly reject teacher’s mortgage applications as they will consider them to be higher risk than people with permanent job roles.

Likewise, your income may not be consistent if you are a teacher. You might be required to work additional hours or run extra classes but these might not be the same from one month to the next.

Many conventional bank advisors often won’t offer the same mortgage deals to you if you have a contract-based job. This is because your employment status is likely to be seen by lenders as less secure than a permanent role.

Mortgage approval for teachers

Proving to mortgage lenders that you have a sustainable job is essential if you’re a teacher on a contract. You’re most likely to get mortgage approval if you choose a lender who will look at mortgage applications on a case-by-case basis.

Other ways that can improve your chances of getting mortgage approval include:

Saving for a larger deposit

The larger your deposit, the higher your chances are at getting mortgage approval. This is because you will be borrowing less money from your lender, reducing your potential risk.

Joint mortgages

Having a partner on the mortgage that has a job with a permanent contract can also help strengthen your mortgage application. This is because the responsibility of repaying the mortgage will be split between more than one person.

Your credit history

Having a good credit history can considerably help your mortgage application. Before applying you should check your credit score with a credit company such as Experian or Check My File. This will give you a good indication of what types of rates you are eligible for.

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Why Clever Mortgages?

At Clever Mortgages we can offer you the support and advice required to ensure you get the right mortgage for your first home.  We provide access to a comprehensive range of mortgages from across the market. We are also authorised and regulated by the Financial Conduct Authority (FCA) and adhere to the Treating Customers Fairly (TCF) guidelines, so you can be confident that we will treat you with integrity and only recommend products that meet your needs.

Mortgage types

A fixed rate mortgage is where your interest rate stays the same for a set time period (usually between 2-10 years). As a result your repayments are exactly the same each month, regardless of what happens to other mortgage rates. These types of mortgages are popular with first time buyers and people looking to budget each month, especially those who have suffered from a poor credit history.

The main downside to a fixed rate mortgage is that if mortgage rates go down you can be paying a higher amount than you would on a variable rate mortgage. However, this can also go in your favour and if interest rates increase you can be paying less than you would on a variable rate.

Every lender will have their own standard variable rate (SVR), which is considered their basic mortgage. This interest rate goes up and down, usually in line with the Bank of England’s interest rates but the lender is free to raise this at any time.

This means that your monthly payments can go up or down depending on what the interest rate is at a given time. Some months you could be paying more whilst other months you could be paying much less.

A discount mortgage is when a reduction is applied to the lenders Standard Variable Rate (SVR) for a certain length of time (typically 2-3 years). Discount mortgages are attractive as they can allow you to pay slightly less than the bank's standard rate. However as the SVR can still fluctuate they are not ideal for people who are looking to stick to a strict long term budget.

A tracker mortgage is basically a type of variable rate mortgage.  What makes them different from other variable rate mortgages is that they follow – track – movements of another rate, the most common rate that is tracked is the Bank of England Base Rate.

A capped mortgage is the same as a variable rate mortgage; however the interest rate can never rise above a set “cap”. These mortgages can work well for people who can budget for different mortgage repayments each month but want the reassurance that their payments will never go above a certain amount.

Offset mortgages are linked to a savings account as well as your current account. Your savings will be 'offset' against the value of your mortgage, and you'll only pay interest on your mortgage balance minus your savings balance. These types of mortgages work well for higher earners or people who have a good amount in savings that they want to use towards paying their mortgage.

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