Mortgages for Doctors

If you work as a locum, your job may by its very nature have irregular shifts, variable hours and even gaps in employment, whether you are doing locum work exclusively, or in addition to another role. While more traditional lenders might find the irregular nature of locum pay problematic when it comes to verifying a sustainable income for mortgage purposes, fortunately, a number of smaller lenders take a more realistic and flexible approach. In the absence of a permanent contract or a regular number of hours worked, specialist lenders will look at an average of your income over a number of previous months or years to establish an income level on which to base their mortgage affordability calculations.

The key to how much you borrow lies in establishing a base income figure, which could be from payslips, self-employed accounts or HMRC documentation, or via one of the alternative methods mentioned above. Once the lender has established this figure, they will carry out affordability checks to establish the maximum amount you can borrow. This is typically in the range of four to five times the income figure but can be affected by other factors such as adverse credit records.

Most lenders limit mortgage borrowing to 95% of the property value (this is referred to as the loan-to-value ratio) meaning that you would have to put down a 5% deposit. However, it’s not unusual for lenders to require a larger deposit – such as 10% or 15% – in more complex cases that fall outside their standard underwriting criteria. By limiting the loan-to-value ratio, the lender reduces its exposure to risk in the event of defaulted mortgage payments. Depending on the different mortgage products offered, you may also find that putting down a bigger deposit will give you access to better mortgage rates.