According to the Office for National Statistics, as of 2024, there’s been an uptick in job changes, with approximately 2.7 million people switching jobs within a year (source).
This surge in new employment means that more people can now apply for a mortgage while starting a new job.
However, with the average house price in the UK standing at £288,000, getting a mortgage can seem daunting, especially if you’re just starting a new job.
Typically, lenders require solid proof of your earnings and a good credit score, which may not be enough for mortgage approval with certain lenders in the case of a new job.
But it’s not impossible to secure a mortgage with a new employer. Some lenders may even consider your application if you have a confirmed job offer.
In this informative guide, we will break down the process of a new job mortgage to help you confidently step into homeownership while managing a new job.
Table of Contents
- Can You Get A Mortgage With A New Job?
- How Long Should You Be In A New Job Before Applying For Mortgage?
- Applying For A New Job Mortgage In The Following Scenarios
- How Much Deposit Is Required For A New Job Mortgage?
- How Much Are You Eligible To Borrow For A New Job Mortgage?
- Eligibility Criteria For New Job Mortgage
- New Job Mortgage Application Process
- Can You Get A New Job Mortgage With Just A Job Offer Letter?
- Will Changing Jobs During Mortgage Application Cause Any Issues?
- To Sum Up
Can You Get A Mortgage With A New Job?
Yes. While starting a new job may pose some challenges when seeking a mortgage, it is possible to get a new job mortgage.
That said, the following factors will influence the mortgage application and approval process:
- Your past employment record
- Your tenure in the new position
- Whether or not you are under probation
Also, not all lenders offer mortgages to individuals with a new job. This makes it all the more important to explore different financing options and seek the most suitable deal.
That’s when a mortgage broker enters the scene, pinpointing lenders likely to view applications from individuals in similar circumstances more favourably.
Interestingly, securing a mortgage with a recent job change is feasible, particularly if you are:
- A newly qualified teacher
- A self-employed individual with substantial experience as a qualified professional
- Have a contract of a temporary nature
- On probation
- Starting a new job within the next three months and can prove the same
- Had an increase in pay
- Working with the same employer but on a new contract
- Have started your own company
Expertise from a suitably experienced mortgage broker regarding the above circumstances is vital.
How Long Should You Be In A New Job Before Applying For Mortgage?
The rule of thumb is – the longer, the better. However, even if you’ve just stepped into a new role within the last three months, you still have some mortgage options – it’s just a matter of finding the right lender!
Given the perceived higher risk, you may have to settle for a slightly higher interest rate. But the silver lining is that you can always consider remortgaging down the line for a better deal.
That said, whether to wait before applying depends on your unique situation. Waiting until your probationary period is ideal, as many lenders consider this in their eligibility assessment.
Yet, waiting might mean missing out on your dream property or a favourable interest rate available on the market. On the contrary, applying too soon could lead to an instant decline if the lender sees you as too risky at this stage of your employment.
That’s why consulting with an experienced mortgage broker before a direct application is key. They can assess your circumstances and provide tailored advice on whether to proceed immediately or hold off.
Applying For A New Job Mortgage In The Following Scenarios
1. If You’ve Recently Changed Jobs
Securing a mortgage after changing jobs is feasible, even with only a few months in the new role. Similar to any mortgage application, start by gathering substantial documentation to support your case.
Again, since these lenders are less common, consulting a specialist broker remains your best course of action.
2. If You’ve Been In A Job For Less Than Six Months
As you approach the six-month mark in a new job, more mortgage options will be available for you, thanks to decreased perceived risk. Your employment history, not just in the current role, will factor into the equation.
3. If You’re On Probation
Regardless of your time in the current job, lenders will inquire about your probationary status.
While some may be cautious during this period, others will consider your overall career history, including the duration and remaining time of the probation, relevant employment records, career gaps, etc.
4. If You’ve Recently Started A Job (Less Than Three Months)
Securing a mortgage within the first three months of a new job may pose challenges, but it’s not a deal-breaker. Some lenders are willing to assess your application based on the anticipated salary of your new role.
Moreover, having a strong work history in your previous job and providing evidence of a permanent contract and a letter from your new employer can work in your favour.
How Much Deposit Is Required For A New Job Mortgage?
Mortgages for new jobs can be secured with deposits as minimal as 5%. However, the likelihood of acceptance increases with a larger deposit and often results in a lower-cost mortgage.
In some cases, securing a new job mortgage with a small deposit might be challenging, especially if you have limited credit history. However, this issue typically arises primarily for individuals in their first job.
How Much Are You Eligible To Borrow For A New Job Mortgage?
The primary factor influencing the amount lenders permit you to borrow is your salary. As a rough guideline, most lenders cap the maximum amount at around 4.5 times your salary.
But for those earning over £60,000, some lenders may extend the borrowing limit to 5 times your income.
If you’re a first-time buyer, a lender might lend you 5.5 times your salary, provided your sole income is £31,000, or your joint income is £50,000. However, a minimum deposit of 10% is required. Criteria will vary depending on each lender.
Typically, the borrowing capacity for a new job borrower remains similar to someone in the same financial situation who isn’t changing jobs.
Lenders will further scrutinise your committed expenditures, such as credit card debt and car financing, which can impact the amount they are willing to lend.
Eligibility Criteria For New Job Mortgage
Needless to say, meeting eligibility criteria and satisfying lender requirements (which may vary) is essential in getting a new job mortgage approval.
Besides the standard factors like credit history, existing debt commitments, and deposit amount, lenders will seek strong evidence of your new income. Some may even ask for financial documents from your previous employment and further clarification from your new employer.
Given the considerable variations in criteria and requirements across lenders, your broker’s expertise proves invaluable in this process. For instance:
Leeds Building Society doesn’t set a specific time requirement for a new job but necessitates a minimum of six months of continuous employment, preferably in the same field.
On the other hand, the Bank of Ireland stipulates a minimum of one month in a new job and requires at least one payslip. They’ll also request a copy of your employment contract if your job tenure is less than three months.
Moreover, Marsden Building Society mandates a minimum of three months in a new job. If still under probation, they might consider an application under certain conditions, such as if the new role mirrors the previous one and there are no employment history gaps.
However, a 20% deposit is required during the probationary period.
New Job Mortgage Application Process
Before diving into the application process, we recommend contacting a broker specialising in securing new job mortgages. This ensures you’re well-positioned to obtain a mortgage tailored to your requirements.
Notably, experienced brokers can assist you in:
- Identifying the ideal mortgage lender catering to individuals who have recently started a new job
- Collecting and optimising your credit reports to rectify inaccuracies or outdated information
- Strengthening your application to counterbalance the perceived risk associated with your recent job change
- Evaluating your overall employment history, considering more than just your current status
Can You Get A New Job Mortgage With Just A Job Offer Letter?
Yes, it is possible. However, it also depends on your entire employment history rather than just your current situation.
As such, if you boast a strong 20-year track record with your previous employer, the lender will view your employment history positively.
A substantial deposit and a sound credit record can further enhance your chances of mortgage approval.
Similarly, frequent job changes, a low deposit, and a bad credit history will pose challenges in obtaining a mortgage with merely an offer letter. If you notice, where problems start is usually when a case faces a myriad of potential challenges, for example an adverse credit history alongside just starting a new role.
Will Changing Jobs During Mortgage Application Cause Any Issues?
If you change jobs during mortgage application, discussing your situation with your broker is best. They are more aware of what lenders may require for approval and advise you accordingly.
For instance, if your lender has already checked the required bank statements or other financial documents, they will be concerned about any job changes as it will make the documents they have checked invalid as your circumstances have changed.
However, if you’re still in the earlier stage of the mortgage application, your lender may question your ability to repay the mortgage and will want to assess the new documentation as part of the application process.
Often, lenders will ask as part of their application about any potential future changes to circumstances.
To Sum Up
So, getting a mortgage with a new job has its fair share of challenges.
But all is not lost, as by understanding lender criteria and collaborating with a knowledgeable broker can make the journey smoother.
Maintaining a positive employment history and a spotless credit report will further enhance your chances of mortgage approval.
Whether you’re a seasoned professional or a first-time buyer stepping into a new role, the key lies in presenting a strong case.
And before you know it, you will be taking your first step to homeownership and fulfilling your lifelong goal!
Your home may be repossessed if you do not keep up repayments on your mortgage.
All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.
I am CeMAP & CERER qualified mortgage adviser and have helped a number of clients realise their dreams when they thought it would not be possible. I’m skilled at getting mortgages sorted for people with a history of missed payments, CCJs, defaults, debt management programmes, IVAs and bankruptcies.