Mortgages for Civil Servants

Are you a civil servant seeking the best mortgage deal available? This comprehensive guide will provide you with expert advice on mortgages for government employees and how to navigate the application process.

Read on to discover the benefits of being a civil servant when it comes to securing a mortgage, explore options tailored to your unique circumstances, and learn how the right broker could help you land an exclusive deal.

Do civil servants get better mortgages?

Yes, in some cases, this is true. While there aren't specific mortgages for civil servants, people in this profession, employed in various government departments or specialist agencies, are often privileged with certain advantages when it comes to securing a mortgage.

This is due to their steady source of income and job protection that comes with the role. This makes them attractive candidates for mortgage lenders seeking reliable borrowers. This, in turn, grants them access to a wide range of mortgage deals from across the UK lending market, including many smaller, more specialist lenders. 

By consulting a mortgage broker with access to a wide range of lenders, civil servants will have the opportunity to compare and find the most advantageous deal available.

How to qualify for a civil service mortgage

You may be eligible for an exclusive deal from a mortgage lender if you are a civil servant employed in the various departments of the UK Government, such as administrative officers, policy advisors, economists, lawyers, diplomats, and scientific researchers, excluding the National Health Service, local authorities, police services, and parliament.

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What benefits can civil servants access?

Civil servants enjoy certain benefits when applying for a mortgage, primarily due to their job security and progression prospects. Below you will find a summary of the kind of incentives lenders are known to offer for professionals in this field:

• Lower interest rates: Some lenders might be willing to offer you a deal with a lower interest rate as your secure employment lowers the level of risk they are taking on.
• More flexibility: As a civil servant, you might find it easier to take out a mortgage with a longer term length than the standard 25 years. Some lender may also consider offering you a deal with flexible features, such as relaxed restrictions on things like overpayments.
• Lower deposit requirements: If the lender is convinced you're a lower-risk borrower, there's a chance you could secure a mortgage with less than 10% deposit.
• Higher income multiples: Most mortgages are based on 4.5 times the borrower's annual income, but people in professions such as the civil service may be able to borrow more, up to 6 times salary under the right circumstances. 

To fully capitalise on these advantages, it is crucial for civil servants to work with an experienced mortgage advisor who can help them navigate the mortgage application process and secure the best mortgage deal for their unique circumstances.

How much could you borrow?

Most mortgage lenders let applicants borrow up to 4.5 times their annual salary, but as a civil servant, you may qualify for a professional mortgage which can be based on up to 5-6 times salary. Not all lenders go this high, but through a broker, you may be able to find one that does.

You can use the calculator below to work out how much you can borrow on a civil servant's salary. It calculates up to 6 times income to reflect the deals on offer to people in this line of work:

Mortgage schemes for civil servants

There are govenment schemes that civil servants can apply for to help improve their chances of securing a mortgage. They include the First Homes Scheme, the Mortgage Guarantee Scheme and Shared Ownership - read on to find out more about each of these.

First Homes Scheme

Through the First Homes Scheme, some civil servants may qualify for a significant discount when buying a property. If you meet the scheme's requirements, this discount could be anywhere between 30% and 50% below its market value.

To qualify for the initative you need to meet the following requirements:

• A first-time buyer over the age of 18
• Have a household income of no more than £80,000 (or £90,000 in London)
• Buying a new build property from a participating housebuilder

Civil servants who qualify as keyworkers will be given priority when applying for a mortgage through the programme.

You can read more about the First Homes Scheme in our guide through the link.

Mortgage Guarantee Scheme

The mortgage guarantee scheme is a government initiative that facilitates access to the property ladder for individuals with 5% deposits, providing lenders with the option to offer 95% mortgages. Launched in April 2021 and extended until December 2023, the scheme benefits both first-time buyers and those looking to remortgage or move home.

By participating in the mortgage guarantee scheme, borrowers can secure a mortgage with a smaller deposit and potentially access more competitive rates on 95% mortgages. This support from the government can make a significant difference in helping civil servants achieve their home ownership goals.

Shared Ownership

Shared Ownership is by no means exclusive to civil servants and other government workers, but they certainly aren't excluded from applying for it. This scheme might be an option for you if you think you might struggle to secure a mortgage based on your income and don't mind the idea of co-owner a property with a local authority or housing association.

It is a middle ground between renting and buying, as you would pay monthly rental payments to the housing association or local authority for the portion that they own. It is possible to increase your ownership of the property, up to 100%, over time through a process called staircasing.

You can read more about Shared Ownership in our standalone guide through the link.

How to get a civil service mortgage

Applying for a civil service mortgage involves several steps, including income verification, credit score considerations, and an affordability assessment. By completing these steps, you can improve your chances of securing the best mortgage deal for your unique situation.

To ensure a smooth application process, it is crucial to work with an experienced mortgage advisor who can guide you through each step and provide expert advice tailored to your needs. With their assistance, you can confidently navigate the application process and secure the best mortgage for your circumstances.

Make an enquiry with us to speak to a mortgage broker who specialises in helping secure exclusive deals for civil servants.

Income verification

One of the first steps in the process is income verification. Lenders need to ensure that you have a stable income and the ability to make regular payments on your mortgage. Depending on your employment status, different documents may be required for this purpose.

Employed civil servants will need to provide copies of their payslips, while self-employed civil servants will need a minimum of two years' accounts prepared by a chartered accountant.

Providing accurate and up-to-date income information is crucial, as lenders use this information to determine your eligibility and the amount you can borrow.

Credit score considerations

Your credit score plays a significant role in the mortgage application process. A good credit score can increase your chances of securing a mortgage, while a poor credit score may make it more difficult to get approved for a loan. Therefore, it is essential to be aware of your credit score and take steps to improve it if necessary.

If you have a poor credit score, don't lose hope. By working with an experienced mortgage advisor, you can explore options for overcoming bad credit and improving your credit score. This may involve paying off outstanding debts, making timely payments on your current loans, and reducing the number of new credit accounts you open.

 Download your credit reports by accessing a trial with Checkmyfile through the link.

Choosing the Right Mortgage Option

When it comes to securing a mortgage, one size does not fit all.

Civil servants have a variety of mortgage options to choose from, including fixed-rate, tracker, and long-term versus short-term mortgages. Selecting the right mortgage option is crucial, as it can significantly impact your financial future and overall home ownership experience.

To make an informed decision, it is essential to understand the different mortgage types and their pros and cons. This will enable you to choose a mortgage that best suits your needs and circumstances, ensuring a smooth and successful application process.

Fixed-rate mortgages

A fixed-rate mortgage is a type of mortgage where the interest rate remains constant for the duration of the loan, resulting in consistent monthly payments. Their primary benefit is the assurance that your monthly payments will remain constant throughout the loan period, making budgeting simpler and helping you avoid unexpected increases in your payments.

Read more in our complete guide to fixed-rate mortgages.

Tracker mortgages

A tracker mortgage is a type of variable-rate mortgage wherein the interest rate is tied to the Bank of England's base rate, causing the monthly payment amount to fluctuate depending on the base rate. The primary benefit of a tracker mortgage is that it typically offers a lower interest rate than a fixed-rate mortgage, allowing for potential savings on monthly payments. Moreover, if the base rate decreases, your payments will also be reduced.

However, there are risks associated with tracker mortgages as well. If the Bank of England's base rate rises, your mortgage repayments will increase in line with it, potentially making it difficult to keep up with payments if your income does not rise accordingly. Additionally, switching to a different mortgage product may incur early repayment charges.

Read more in our complete guide to tracker mortgages.

Long vs. short-term mortgages

Long-term mortgages have a repayment period of more than 25 years, while short-term mortgages have a repayment period of 15 years or less. Short-term mortgages entail higher monthly repayments, but you pay less interest overall and become the sole owner of your home much sooner. On the other hand, long-term mortgages have lower monthly payments, but you pay more interest overall since there will be more instalments to pay.

When deciding between a long-term and short-term mortgage, weigh up the pros and cons of each. Consider factors like your current financial situation, future income prospects, and overall goals to make the best decision for your circumstances.

What if you are working abroad?

Civil servants working abroad may face unique challenges when applying for a UK mortgage. However, this does not mean that they cannot secure a UK mortgage. There are lenders that specialise in providing mortgages for overseas borrowers, and expert advice is available to help navigate the application process.

By working with a knowledgeable mortgage advisor and exploring the various mortgage options available, civil servants working abroad can successfully secure a mortgage and achieve their homeownership goals.

Several lenders specialise in providing mortgages to international clients, including Barclays, Natwest, and HSBC.

These lenders offer competitive rates and flexible repayment terms, making them a desirable choice for overseas borrowers. 

When seeking a mortgage as an overseas borrower it is recommended to work with a mortgage advisor experienced in dealing with international clients. By consulting with an expert in this field, you can navigate the complexities of the UK market and find a mortgage option that best suits you, ensuring a smooth and successful application process.

Dealing with unique circumstances

While many civil servants enjoy the benefits of being low-risk borrowers, some may still face unique circumstances such as bad credit or age limitations when applying for a mortgage.

Fortunately, there are ways to overcome these challenges and secure mortgage approval.

Overcoming bad credit

Bad credit can be a hurdle for anyone applying for a mortgage, but it doesn't have to be insurmountable. By taking proactive steps to improve your credit score, you can increase your chances of securing a mortgage as a civil servant with bad credit.

Working with an experienced mortgage advisor can help you explore your options and develop a strategy to overcome bad credit. By addressing outstanding debts, making timely payments on your current loans, and reducing the number of new credit accounts you open, you can improve your credit score and enhance your chances of mortgage approval.

Age restrictions

Age limitations can also pose challenges for civil servants applying for a mortgage. In the UK, the minimum age requirement for a mortgage is 18 years old, while the upper limit may vary depending on the lender. It is important to take these age caps into account when applying for a mortgage and ensure that you meet the necessary criteria.

By working with an experienced mortgage advisor, you can navigate age-related challenges and secure a mortgage that fits your circumstances. With the right support and guidance, age limitations need not prevent you from achieving your home ownership goals.

How Teito can help you secure a civil service mortgage

There are mortgage brokers at Teito who specialise in securing mortgages for civil servants. They know exactly which lenders offer incentives for people in this profession and have deep working relationships with them, which often means access to exclusive rates and deals.

Here are some of the other reasons to choose Teito:

• Our brokers can offer bespoke mortgage advice for civil servants
• We are 5-star rated on leading review websites
• You can compare rates and deals online with us for free
• You can access the entire market with our help

Ready to get started with your mortgage broker? Make an enquiry to get started with a free, no-obligation chat that won't leave any marks on your credit reports.