Can Teachers Get a Better Mortgage?

From managing a classroom to working through those long hours marking work, being a teacher can be one of the public sector’s most important and difficult occupations at times, which really begs the question: “Are there any mortgage benefits for being a teacher?”

The good news is that the short answer is – absolutely! There are a variety of benefits to being a teacher when it comes to navigating the world of mortgage applications, with specialised mortgage options, schemes, and additional support available for all teachers. In this short guide we will explore everything that you and your fellow teachers will need to know about teacher mortgages and how to secure the best mortgage deal for you.

Can Teachers Get Better Mortgage Rates?

One of the biggest advantages of being a teacher is that it enters the bracket of professions viewed by lenders as highly skilled with a stable and consistently good income. The sum of which generally adds up to being awarded better mortgage rates.

Simply, many lenders view teachers as low-risk borrowers because of their job security and consistent salaries. In fact, institutions like the Teachers Building Society specialise in catering to educators. However, with the fluctuating mortgage prices and rates, it is always best to compare any ‘special mortgage rates’ with standard mortgage deals, as it can often be the case that standard mortgages can offer better or more advantageous deals. Specifically, seeking advice from a whole-of-market broker like Boon Brokers can help you identify the most favourable mortgage rates, tailored to your circumstances.

No matter your occupation, mortgage rates will always still depend on the ‘usual suspects’ and will factor in credit score, deposit amount, loan term, and overall financial circumstances. As such, having a strong credit score, sizable deposit, and good employment history will always be best.

Are there Special Mortgages for Teachers?

Technically, there is no such thing as a ‘special teacher mortgage’, however, there are certain advantages that come from the profession of teaching that lend themselves to the criteria of most lenders. Additionally, there are government mortgage schemes available to teachers that are aimed at key workers – including NHS staff, teachers and lecturers, police officers, military, and many more – that will offer benefits such as reducing the deposit amounts and enhancing the amount available to borrow.

Typically, these government schemes can be divided into:

• Shared Ownership : Allows you to buy a portion of a property, typically between 25% and 75%, while paying rent on the remaining share.
• First Homes: Provides first-time buyers with a 30% – 50% discount of the property’s market value.

Once again, while these schemes are specifically aimed for targeted groups that meet certain criteria, they can provide teachers with an extra opportunity should the scheme suit their particular needs.

Hero Mortgages for Key Workers

In addition to the government-backed schemes, teachers would also qualify for Hero Mortgages, offered exclusively by Kensington Mortgages. This mortgage is again tailored to key workers and is designed to be more flexible, potentially increasing the typical borrow amount than a standard mortgage.

For teachers who receive additional pay from such activities as extra-curricular, overtime, or additional duties, this type of mortgage could potentially offer a greater borrowing potential and more flexible lending criteria. It is always worth discussing this with your Broker and exploring all mortgage options to help determine whether a Hero Mortgage is the right fit for your circumstances.

What are the Mortgage Requirements for Teachers?

The mortgage requirements for teachers are much the same to those applying for any standard mortgage. As such, meeting the lending criteria would usually include;

• A good credit history with no major financial issues.
• Proof of a stable employment and salary (payslips and employment contracts).
• A deposit, this should usually be at least 5-10% of the property’s overall value.
• Passing an affordability assessment (lenders review income and expenses).
• Proof of identity and address (passport or utility bill).

As previously touched upon, teachers with permanent roles – or with a good few years under their belt – will typically find it much easier to get approved for a mortgage following this criteria. However, if you are struggling to meet all aspects of the criteria, working alongside a mortgage broker can help identify lenders with more lenient expectations.

Can I Get a Mortgage as a Supply Teacher?

Yes, it is certainly possible for supply teachers to ‘qualify’ for a mortgage, though it can be more challenging than for those in permanent positions. Lenders will assess your income, contract history, and overall financial standing. In the case that you’re on a temporary or zero-hour contract some lenders may decide to reject your application as a ‘high-risk’ borrower. To help improve your chances we suggest that you have the following:

• Provide at least 12 months’ worth of employment history.
• Show consistent income with payslips and bank statements.
• Maintain a strong credit score to demonstrate financial responsibility.

It is important to note that should you decide to go directly to a lender and are rejected following a hard credit search, this will leave a ‘red flag’ on your credit file that will be seen by any future lenders. That is why we suggest always using a trusted broker – like Boon Brokers – to go through your application step-by-step and case-by-case.

Can I Get a Mortgage as a Newly Qualified Teacher?

Yes – Newly Qualified Teachers (NQTs) can also secure a mortgage. However, it’s important to note the context, for as they are early in their careers, some lenders may consider them a higher risk borrower. That being said, there are some lenders that would support a NQTs application, including:

• Lenders who accept employment contracts before a teaching role starts.
• Lenders with lower deposit requirements.
• Specialist lenders who consider future earning potential when assessing affordability.

It is common practice for NQTs to often move into permanent contracts after a short probationary period, and so lenders would also ordinarily take this into account when reviewing applications. And as before, NQTs would also benefit from the same government Schemes discussed earlier, including the first time buyer and shared ownership scheme.

One opportunity available for teachers that could help with earning additional funds through the teacher claims scheme. This allows eligible teachers to claim back student loan repayments until March 2025.

How Much Can a Teacher Borrow?

How much a teacher can borrow will directly depend on their salary, financial commitments, and ultimately whether the lender views the borrower as a low or high risk case. Following the same rules as standard mortgage loans, the lender will typically offer around four to five times the borrowers annual income. For example:

• A teacher earning £30,000 per year could potentially borrow between £120,000 and £150,000.
• A higher-earning senior teacher on £45,000 could borrow between £180,000 and £225,000.

In the case of additional income from tutoring or other sources, this may also be factored into affordability assessments and could potentially increase borrowing capacity. On the other hand, existing financial commitments, such as student loans and credit card debt, will have a negative impact on the borrowing amount.

Mortgage Calculator for Teachers

If you’re interested in finding out exactly how much you can borrow and what mortgage you can afford, then Boon Brokers mortgage calculator is a great place to start. This handy tool will help you navigate the costs and provide an accurate estimation on the amount you can expect to borrow from lenders. In addition, working with a broker can ensure that all potential sources of income and expenses are taken into account – leaving you with a precise and clear understanding on where you stand financially in the world of mortgage lenders.

How Boon Brokers Can Help You Find The Best Mortgage

Here at Boon Brokers, we specialise in finding the best mortgage deals available to you. As a fee-free mortgage broker – we’re here to help you – and will provide access to a wide range of lenders to find the mortgage that is perfect for you.

Contact us today – our experts will help you navigate the difficulties of mortgage schemes and understand the financial landscapes of mortgages with ease so that you can find your next property with confidence.