Borrowers looking for holiday-friendly mortgages soar in November
Can you get a mortgage on leave? Lenders are tightening the screws, but if you know where to look, you can
- Holiday-friendly mortgage searches rose 230% in November
- Many lenders avoid workers on leave unless they have returned to work
- But there are still options available, mortgage professionals say
The number of UK workers seeking holiday-friendly mortgages soared in November following the extension of the Coronavirus Job Retention Scheme last month.
Searches for mortgage products suitable for borrowers on leave increased 230% between October and November, according to Legal & General Mortgage Club.
Its SmartrCriteria tool, used by advisors to match clients with the right lenders, recorded 577 searches for holiday-friendly mortgages in November, up from 175 searches in October.
The number of vacation-friendly mortgage searches has risen sharply since the extension of the job retention program
“Following the Chancellor’s announcement last month, we are seeing more and more borrowers turning to the expertise of advisors to find holiday-friendly mortgages,” said Kevin Roberts, Director of Legal & General Mortgage Club.
“Our latest findings from SmartrCriteria suggest that the number of people seeking these products has increased dramatically in response to the expansion of the program.”
For workers on leave who are still hoping to take the stamp duty vacation and pursue their home buying plans, Roberts said they have options left.
“Workers on leave always need access to mortgage products and they should not assume that their situation means they are excluded from the mortgage market,” he said.
“There are options, and talking to an independent mortgage advisor who can help you navigate the products available should be everyone’s first step. “
Leave income will not be enough
Since the job retention program was extended, most lenders will not accept income on leave, according to David Hollingworth, associate director at L&C Mortgages.
“In most cases, lenders will now want to see that the borrower is back to work with a letter from the employer and at least a payslip confirming this,” Hollingworth said.
“Some lenders may be able to consider it on a case-by-case basis, but for many, they will have to return to work because leave income is not accepted by most lenders.”
Back to work ?
For workers on leave looking to buy before the stamp duty holiday ends, there is still hope, though options are limited.
“For those who are determined to buy, the good news is that there are a few lenders who will consider workers on leave as long as they have a return to work letter, with the return date confirmed,” said Richard O ‘Reilly, mortgage expert at Habito. .
The two main lenders currently accepting applications from those on the leave plan are Santander and Barclays.
“If you can afford to wait, our advice would be to wait until you get back to work,” O’Reilly said. “This will open up more lenders and potentially better interest rates.”
Re-mortgage with your current lender
For those who remortgage, being on leave should not affect their ability to enter into a new agreement with their current lender.
“It may be better to stick with your current mortgage provider rather than trying to remortgage,” said Mark Harris, managing director of mortgage broker SPF Private Clients.
“People on leave should consult a mortgage broker for advice, as lenders take a wide range of approaches,” Harris said. “A broker will know the best lender to approach. ”
The best mortgage rates and how to find them
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