Getting an NQT Mortgage before the start of your NQT Year
The essential guide to getting an NQT mortgage before the start of your NQT year.
A problem we get from Newly Qualified Teachers is that they want to get a mortgage before the start of their first academic year. Therefore, they don’t have the income yet. Usually they are finishing their training year, and receiving a bursary.
But, what if that bursary isn’t enough to get a mortgage? We see this a lot. Teachers offered a position, signed a contract and they go to their bank or mortgage lender and can’t get a mortgage due to their temporary contract or not being close enough to their start date.
Can I get a mortgage using my NQT starting salary?
Whilst training, once you have your NQT offer you generally have 2 options.
- Get a mortgage using your bursary income.
- Get a mortgage using your NQT income even though you haven’t started yet.
Few lenders will consider either situation. However, there are some that would consider either. Depending on the subject you are studying to teach your bursary may not be enough to get the mortgage you want.
Bursaries for Teachers range from a few thousand pounds for the year, up to £26,000. Whilst an NQT starting salary currently is £25,417. The other problem faced by Newly Qualified Teachers is that during their NQT induction period they are usually on fixed term contracts.
However, some lenders will even lend more to Teachers, this is due to your pay ranges having regular pay rises over the first half of your career.
When can I get a mortgage using my NQT starting Salary?
Basically, as soon as you get offered the job. However, you may have to pay for it with a higher interest rate if it’s more than 3-4 months before the start date.
Lenders generally will only offer a mortgage a month before the start date of your new job, with Teachers this is further limited by only 3 or 4 lenders taking NQT’s at all.
Why do Newly Qualified Teachers (NQT) struggle to get a mortgage?
We cover this a lot more in our more in depth NQT article you can read here. However, the basics are:
- You are usually on a fixed term contract of 12 months
- Your employment history has a 1 year gap whilst studying
- Some Teachers don’t enjoy teaching and change careers in that first year.
But, some lenders understand that you are at the start of your career, and the only way is up! With regular pay rises over the majority of your career and plenty of opportunity for progression you are a prime candidate for a mortgage.
So much so, that some lenders will actually lend you more in your early career, knowing that your income will likely increase over time.
What do I need to do to use my NQT teacher salary?
This is quite simple. You’ll need the normal things like bank statements, proof of ID etc.
You’ll also need some other documentation for an NQT mortgage (If you have them):
- Your NQT Teaching contract for the new academic year.
- If you do not have your NQT Teaching contract. A signed letter from the school stating your remuneration.
- Your bursary statement for the training year. More on getting a Trainee Teacher mortgage here.
If you do not have any of these particular documents, still speak to a specialist Teacher Mortgages Broker to see what your options are.
If I am training will I need an NQT contract to get a mortgage?
It will depend on the time of year. From around April/May onwards it is generally expected that you will have some form of contract for the next academic year. That is due to the application process for NQT applicants starting usually in January.
A lot of Teachers tend to have their NQT contract by the end of May. However, some don’t get them till later on so you may still have options if you’re still waiting.
What happens if I go Supply instead of doing my NQT year?
This can make your life more difficult when it comes to getting a mortgage. Lenders tend to require a minimum of 6 months history for Supply Teaching, with most wanting at least 12 months.
The main question any lender will have would be why have you decided to become a Supply Teacher rather than doing your NQT year? Is it because Supply better fit your situation and your long term plans or is it because you could not secure an NQT position at the time.
Either way you will have options, but if you have gone supply and are wanting to secure a mortgage we suggest you speak to a specialist Teacher Mortgages Advisor to go through your options.
Housing Schemes For An Nqt Mortgage
Getting an NQT Mortgage on your own can be hard. There are some Schemes available. Below we detail the most common ones.
Government Help To Buy Scheme
The Government Help To Buy Scheme has been around for a while and is probably the most well known scheme.
It is a 20% equity loan that allows you to put down a 5% deposit and get a 75% mortgage. This therefore means you usually get a better rate with the lender.
We have a whole article on this scheme here.
Shared Ownership can be good if you have a low income or low deposit.
The scheme basically lets you part rent and part own your home.
This can be quite good for NQTs as your income will grow steadily throughout your early career and you may be able to buy more shares later in the term of your mortgage.
How much can I borrow?
This is the big question. As a Teacher you can usually borrow up to five times your income. However, as an NQT it is more likely to be around 4.5 times your income.
If you would like to find out how much you can borrow get in touch and we’ll tell you. For Free! And it will usually only take around 15 minutes.
NQT Mortgage Calculator
We don’t have an NQT Mortgage Calculator. This is because an NQT Mortgage Calculator wouldn’t be very accurate. There is just too much information required to give you an accurate figure.
We can do it however, and if you want to know how much you can borrow you should definitely get in touch and we’ll tell you for free.