What is a zero hour contract?

You’ll be pleased to know that people on zero hours contracts are offered mortgage rates no different to any other kind of business, and your application does not carry a premium or loading according to your employment status. You will not face an automatic penalty because your income is based on work under a zero hours contract. It will only be the assessment process that will vary from that for a conventional worker or regular contractor.

Much as it would be convenient to supply a list of the ‘best’ mortgage rates for people on zero hours contracts, it is impossible to do so here. The mortgage market is highly competitive and extremely dynamic, with products being adapted and changed, interest rates nudging upwards or downwards and new offers coming onto the market on an almost constant basis. What might be a favourable rate one day could be a poor competitor the next.

It is also imperative to not rely wholly on the headline interest rate to judge the mortgage deals you are looking at. Behind the interest rate there are many other terms that could change how you will benefit from the deal in the long run, or not.These could include the duration of the introductory deal, any fees or costs that could be applied and charges for early repayment. You might find that a mortgage with a slightly higher interest rate could work out better for you over the duration of the loan because of the other peripheral factors.

For a complete assessment of where you might stand with potential mortgage deals to suit your needs as a zero hours contract worker, please get in touch with our team. We’ll draw back the curtain and do the hard work for you.

If you are a worker on a zero hours contract then, unless you can show an extended period of regular work for the same employer (usually at least 12 months, but sometimes as much as two years), most high street lenders will be cautious about accepting your mortgage application. While many mainstream lenders have revised their criteria to be more accommodating towards zero contract workers, their assessments for potential borrowers are often based on quite narrow factors to do with income and creditworthiness.

In order to obtain the right mortgage for your circumstances, it’s likely that you’ll need to apply to one of the specialist lenders who cater to people in non-typical employment. These lenders take a far broader view of an applicant’s income, understanding the landscape of today’s workplace, new business structures, and how contractors work and get paid. They may also take other factors into account, such as assets or equity you hold, and look at your income in context.

The credit crunch around 2008–9 caused banks and high street lenders to become far more cautious about who they lent to, excluding most people who fell outside of their strict, conventional criteria from the mortgage market. In more recent years, numerous new lenders entered the market to meet the need for mortgages amongst the growing number of people on zero hours contracts, who now make up such a significant portion of the workforce that even mainstream lenders are now changing their policies to be more accommodating.

The mortgage that best meets your needs as a zero hours worker could be one from a high street provider or a more specialist lender, depending on the other circumstances around your case. To check your eligibility for a mortgage, and which lenders might have the right deal for you, whatever your employment history, feel free to get in touch today.

Advice on mortgages for zero-hours contract workers can be quite a specialist field, whether working with a mainstream lender or not. While a number of lenders have made it easier for people on zero-hour contracts to apply for a mortgage, most of them are instinctively risk-averse and you can never be sure that what you’re offered will be the best deal for you without talking over all your circumstances with a specialist mortgage advisor.

An experienced expert in the mortgages field will understand all the issues around zero-hours contracting and your income, and most importantly how you can frame your application for the best chance of success. With their deep knowledge of the market, a specialist advisor will know exactly which lender to approach, be that a specialist lender whose deals you won’t see advertised on the high street, or a mainstream lender, to find the right product to suit your needs and circumstances.

With over 12,000 mortgages from over 90 lenders to choose from, including deals we are often only able to access on an exclusive basis, we are confident we’ll be able to get you the right deal, however tricky it might seem to you right now. We’ll take the time to go over your particular circumstances, getting a thorough picture of your financial history and current income patterns, before giving you an honest appraisal of all the options that are open to you.

Researching all the possible lenders and products suitable for your circumstances by yourself could entail spending a great deal of time and energy in front of a screen, and you will only be covering the lenders available to you through public channels. These mainstream lenders often do not have the frameworks, processes or willingness to consider borrowers on zero-hours contracts. Only when you discuss your mortgage needs with an expert will you get the full picture and the impartial advice you need to make the right decision going forward.

Please feel free to get in touch with our team here at Just Mortgage Brokers for a free, no-obligation initial consultation. Let us do the hard work for you – we’ll be happy to see how we can help!