Most working people would consider themselves professional. However, when it comes to mortgages, the term ‘Professional’ has a different meaning. So, what is a professional mortgage and how does it work?
What is a Professional Mortgage?
A “professional mortgage” isn’t a distinct product category per se, but rather a term used by lenders that offer preferential rates and criteria to people who they consider to be ‘Professional.’
The reason for this is because some lenders consider Professionals as lower risk based on factors like income levels or job security.
In essence, professionals have access to the same mortgage products as any other applicant. However, certain mortgage providers may extend special privileges to them.
What jobs qualify for a professional mortgage?
Examples of professions that that qualify include –
- Accountants
- Financial Advisers
- Solicitors
- Barristers
- Doctors
- Dentists
- Architects
- Surveyors
- Teachers
Key workers can also benefit from preferential rates and criteria from some lenders.
These could include –
- Police Officers
- NHS Staff
- Emergency Service Personnel
How do I know if I qualify for a professional mortgage?
As with any mortgage, different lenders treat different borrowers in different ways based on their perceived risk and target market.
Where a lender does have preferential rates and criteria for professionals, they will have their own list of acceptable professions.
Each profession may also need certain industry qualifications. Other criteria such as experience may be a factor, although some lenders accept newly qualified professionals and even some with less than one year’s accounts.
How much can I borrow with a professional mortgage?
As with any mortgage, borrowing capacity depends on each person’s circumstances and factors such as income level, age and credit status.
However, it’s possible for professionals to borrow more than comparable applicants who don’t meet the criteria with certain lenders.
Can I borrow 5.5X salary?
This is possible, but is based on factors such as age, income levels, credit status etc.
At the time of writing, there are some lenders who may consider up to 6 – 6.5 X salary for professionals. However, this is on a case by case basis.
More importantly, just because somebody can borrow to this level, it doesn’t mean they should. The mortgage needs to be comfortably affordable both now and in the future.
Professionals who own a limited company could also benefit from basing their mortgage on business profit instead of personal dividends which could also help with borrowing capacity.
How much deposit do I need for a professional mortgage?
At the time of writing, there are some lenders who will accept a 5% deposit.
However, this will differ from lender to lender. In addition, even where a lender will accept a 5% deposit, this will usually be up to a maximum loan amount.
For larger loans, higher deposits could be required.
Are professional mortgages worth it?
Professional mortgages can be worth it in certain situations.
However, it’s important to carry out a comparison with products from across the market, not just professional mortgage ranges.
For example, rates could actually be higher for some professional mortgages in exchange for higher income multiples. If this is something you don’t actually need, you could end up paying more when compared to a standard mortgage.
It’s always worth seeking professional advice to achieve the right outcome.
