Working on a zero-hours contract does not automatically stop you getting a mortgage, but lenders can assess this type of income very differently.
The key questions are usually how long you have been working on the contract, how consistent your income has been, whether the work is in the same field, how much you need to borrow, your deposit, your wider credit profile and the lender’s own policy.
Can I get a mortgage on a zero-hours contract?
Potentially, yes. There is no single rule used by every lender.
MoneyHelper explains that lenders assess affordability using your income, outgoings and the security of your employment. That means the fact you are on a zero-hours contract is only one part of the picture.
Some lenders publish specific criteria for zero-hours workers. For example, Halifax currently says it may consider applicants who have at least 12 months’ continuous employment on a zero-hours contract, including where the applicant has worked for different employers in the same type of work. It assesses income using the total received over the latest 12 months and requires evidence covering that period.
Other lenders can be more restrictive. Nationwide, for example, currently says zero-hours income is acceptable only as secondary income, where there is another higher employed, self-employed or pension income.
This difference is exactly why it can be risky to assume that one lender’s decision represents the whole market.
What evidence might a lender ask for?
Depending on the lender, you may be asked for:
- payslips covering a number of months, and sometimes a full 12-month period;
- a recent P60;
- bank statements showing the income being received;
- details of how long you have worked in the same occupation or industry;
- evidence of your deposit; and
- details of any overtime, commission, bonus or second-job income.
MoneyHelper notes that lenders also look at regular household spending and existing debts when deciding how much you can afford to borrow.
Does changing employer matter?
It can, but it does not always mean the employment history starts again from zero.
Some lenders may consider continuous work in the same type of role even where the employer has changed. Halifax’s current published criteria are one example of this approach.
If you have moved between employers but stayed in the same profession or sector, it is worth making that clear when your circumstances are assessed.
What if my income changes every month?
Variable income is common with zero-hours work. A lender may therefore look at an average or at income received over a longer period rather than simply using the latest payslip.
The precise calculation varies by lender. Overtime, commission and bonuses may also be treated separately from basic pay.
That means two applicants earning the same amount over a year can still receive different affordability results depending on how the income is structured and which lender is assessing it.
Will a bigger deposit help?
A larger deposit can improve the overall strength of an application and may widen the available lender options, but it does not remove the need for acceptable income evidence and affordability.
The lender will still need to be comfortable that the mortgage payments are sustainable.
Can I get a mortgage if my zero-hours contract is my main income?
Possibly, but lender choice may be narrower than for somebody on a permanent salaried contract.
As the examples above show, some lenders may consider zero-hours income as the main income if their criteria are met, while others may only accept it as secondary income.
The right approach is therefore to assess the complete circumstances before making a full application.
What if I have only recently started zero-hours work?
A short track record can make things more difficult because there is less evidence of sustainable income. Some lenders may want a longer history before they will use the income.
If you previously worked in the same occupation, that background may still be relevant, but whether it helps will depend on the lender.
Avoid applying blindly
Zero-hours contract criteria vary considerably. Applying to a lender that does not accept your income structure can lead to unnecessary delays and potentially avoidable credit searches.
A more targeted approach is to establish the length and consistency of your employment history, document the income properly and then identify lenders whose criteria are potentially compatible with your situation.
How TLA Finance can help
TLA Finance can review mortgage applications involving zero-hours contracts and other forms of variable income. We can look at your employment history, payslips, overall income, deposit, credit profile and affordability before considering suitable mortgage options.
Visit our mortgage services page or contact TLA Finance to discuss your circumstances.
Important: Mortgage availability and lender criteria can change. Your home may be repossessed if you do not keep up repayments on your mortgage. This article is general information and is not a personal mortgage recommendation.
