Can you get a mortgage with a zero hour contract?

Posted byDaniel Tannenbaum | Category Blog | Date 18 April 2019


Zero hour contracts are increasing in popularity. This is primarily down to the flexibility they offer the employer, but there are some benefits to workers too. For those who like to be able to take control of their earning potential, a zero hour contract can help them to do so. It also frees you up to be able to accept work from another company without needing to give notice.

If you’re on a zero hour contract and thinking about buying your first home or remortgaging an existing property, you may be wondering how this type of contract will impact your application. While some lenders won’t accept applications from zero hour workers, there are other lenders that are more than willing to work with this unique type of contract. Also, be ready for the question they may ask. Read on to find out how you can get a mortgage with a zero hour contract.

Will lenders accept zero hour contract mortgage applications?

Some lenders have a blanket rule that they do not accept applications from people with zero hour contracts. Others, like Halifax, will accept your application if you can show 12 months of employment history.

Try to see it from a lender’s perspective. When you are on a zero hour contract, your work isn’t guaranteed every month. This can lead to sporadic income patterns. When it comes to being able to make mortgage repayments every month, irregular income can be a red flag for lenders.

Some lenders will only consider income from zero hour contracts to be classed as secondary income and only count 50% of it. This can be a huge blow to the amount you can potentially borrow. If this is the case for you, applying for a mortgage with a partner, friend or guarantor might help.


How to get a mortgage with a zero hour contract

Like any other mortgage application, there are things you can do to make yourself a more attractive choice for lenders.

  • Improve your credit score. Those with a strong credit score are more attractive to lenders because it shows they can keep on top of their financial obligations. If you can show you have kept up with all payments on a zero hour contract, then this will be a good sign for lenders.


  • Provide a bigger deposit. When you put up a larger deposit, you drive down the loan to value (LTV) that you are applying for. This is a good sign for lenders as it places more of the risk on your shoulders. To increase your deposit, you can either save more money or look for less expensive property.


  • Get a guarantor. If you are unable to apply for a mortgage on your own, a guarantor can help reassure the lender. The guarantor will need to be a family member and own their own home. Parents sometimes act as a guarantor for their children to help them get on the property ladder. The guarantor is not listed on the deed and they don’t own any of the property, but they sign a legal agreement to pay the mortgage in the event the applicant is unable to.


  • Apply with someone else. If yours is the only income on the application, you might struggle. However, when you apply with someone else, this gives the lender more security. If your partner is on a permanent contract, this can help to make your application more favourable in the eyes of lenders.

What are the first steps?

If you’re interested in getting a mortgage while on a zero hour contract, it makes sense to speak to a specialist advisor. They will be able to help you navigate the complicated world of mortgage applications and put you in touch with the providers most likely to accept your application.

A good mortgage advisor will be able to look at your credit history, employment status and your deposit and tell you which mortgage provider is more likely to look at your situation favourably.

If you are rejected from your first application, don’t give up. Being rejected by one lender doesn’t mean anything other than you didn’t meet their criteria. All lenders have different rules, so don’t think that all lenders are going to do the same thing. If you have a sizeable deposit and a good credit score, many lenders will look past your zero hour contract.