Mortgage lenders for furloughed workers

If you have been furloughed by your employer it may affect how much you can borrow and the number of mortgage deals available to you.

Generally, you may still be able to get a mortgage if you've been furloughed and have a letter from your employer confirming that you'll be returning to work.

If you need to remortgage, your existing lender may still let you switch to a new mortgage deal. This is called a product transfer. Talk to your lender or a mortgage adviser like Trussle to get advice for your exact situation.

Some lenders will accept top-up pay from your employer when calculating how much you can afford to borrow.

But most lenders will not accept your full bonus, overtime or commission pay.

Read our coronavirus guide to learn more about how lenders are reacting to Covid-19 and how the pandemic is affecting the housing market.

Keep reading to find out the details for the UK's largest mortgage lenders.

Check if you’re headed for your mortgage provider’s SVR

For the average borrower, the difference between a market leading deal and the average Standard Variable Rate (SVR) is around £4,500 in extra interest each year - an amount that can go a long way in terms of other living expenses or saving for the future.

Use a remortgage calculator to find out the savings you could make by switching to a new deal. You should review your mortgage 3 to 6 months before the end of your initial period to give yourself plenty of time to find and switch to a new deal.

Clydesdale Bank

Clydesdale will not accept your furloughed income when working out how much they'd be willing to lend you.

Coventry Building Society

Coventry will accept your furloughed income when applying for a mortgage.

When calculating what you can afford to borrow, Coventry will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

If your employer is topping up your salary, Coventry can accept it, but you'll need written confirmation from your employer.

Coventry will accept 50% of overtime, shift allowance and commission income if you can show that you've received it consistently over the last 3 months. Bonus income will not be accepted.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

Halifax

Halifax will accept your furloughed income when applying for a mortgage.

When calculating what you can afford to borrow, Halifax will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

Halifax may consider your regular pre-furlough bonus, overtime and commission income when deciding on how much you can borrow.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

HSBC

HSBC will accept your furloughed income when applying for a mortgage, but you must have a letter from your employer confirming that you'll return to work within 3 months and what your income will be.

When calculating what you can afford to borrow, HSBC will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

If your employer is topping up your salary, HSBC can accept it, but you'll need written confirmation that the top up salary is guaranteed.

HSBC can accept up to 50% of your overtime, bonuses and other allowances that were part of your income pre-furlough.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

Nationwide

Nationwide will accept your furloughed income when applying for a mortgage, but you must be returning to work in the next 4 weeks.

When calculating what you can afford to borrow, Nationwide will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

If your employer is topping up your salary, Nationwide can accept it, but you'll need written confirmation from your employer.

No extra income, such as your bonus, overtime or commission will be accepted when working out how much they are willing to lend you.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

Natwest

Natwest will accept your furloughed income when applying for a mortgage.

When calculating what you can afford to borrow, Natwest will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

If your employer is topping up your salary, Natwest can accept it, but you'll need written confirmation from your employer.

No extra income, such as your bonus, overtime or commission will be accepted when working out how much they are willing to lend you.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

Platform

Platform will accept your furloughed income when applying for a mortgage.

When calculating what you can afford to borrow, Platform will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

If your employer is topping up your salary, Platform can accept it, but you'll need written confirmation from your employer.

No extra income, such as your bonus, overtime or commission will be accepted when working out how much they are willing to lend you.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

Santander

Santander will accept your furloughed income when applying for a mortgage.

When calculating what you can afford to borrow, Santander will accept 80% of your basic salary, up to a maximum of £2,500 a month (£30,000 a year).

If your employer is topping up your salary, Santander can accept it, but you'll need written confirmation from your employer.

No extra income, such as your bonus, overtime or commission will be accepted when working out how much they are willing to lend you.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

TSB

TSB will not accept your furloughed income when applying for a mortgage unless your income is being topped up 100% by your employer.

Your employer must provide confirmation of when you'll be returning to work and if you'll be returning on a full time or part time basis.

No extra income, such as your bonus, overtime or commission will be accepted when working out how much they are willing to lend you.

If you've recently returned to work or will be soon, you may need to provide payslips showing your current income and pre-furlough income, and a return to work letter from your employer confirming everything.

Virgin Money

Virgin Money will not accept your furloughed income when working out how much they'd be willing to lend you.

Top tips for mortgages and homeownership during coronavirus

Here's how to stay in control of your homeownership and mortgage costs, so that you're prepared for any financial bumps in the road during the coronavirus pandemic.

Check if you’re headed for your mortgage provider’s SVR

For the average borrower, the difference between a market leading deal and the average Standard Variable Rate (SVR) is around £4,500 in extra interest each year - an amount that can go a long way in terms of other living expenses or saving for the future.

Use a remortgage calculator to find out the savings you could make by switching to a new deal. You should review your mortgage 3 to 6 months before the end of your initial period to give yourself plenty of time to find and switch to a new deal.

Consider taking a mortgage holiday

It’s clear that mortgage payment holidays have proved a vital lifeline for some homeowners who have suffered financially as a result of the COVID-19 lockdown measures.

If you’ve been part of the furlough scheme and are worried about your future employment status, there is still time to speak to your broker about taking a payment holiday. If you haven’t taken a payment holiday already, you can apply to take one up until 31 October 2020. If you have taken an initial payment holiday and are still struggling financially, you can speak to your lender about extending for a further three months or begin making reduced payments.

Taking an initial break from paying your mortgage will take the pressure off other expenses, and can give you time to plan for the future. It’s worth noting that once the mortgage payment holiday is up, your monthly payments will increase slightly. This is because the additional interest is added to the total mortgage balance.

Consider switching to interest only

Another way to ease financial pressure is by switching your mortgage payment plan to interest only.

Adjusting mortgage repayments so that only interest is paid can save homeowners a significant amount on their monthly payments. The money saved can be put into a savings account, or used for other essential expenses.

Read our interest only guide to see if this might be right for you.

Look into product transfers

Our data shows that homeowners who go through a product transfer save on average £326.31 a month.

To put this saving in perspective, the average UK household spends £60.60 a week on food, so a product transfer could cover more than your monthly food budget.

Homeowners can check their eligibility for a product transfer with their existing lender or a mortgage broker like Trussle to see if they could save money.

Check if you can save by remortgaging

If you’re worried about how your job might be affected by the furlough scheme ending, we encourage you to keep an eye on your mortgage. Mortgages are often the biggest monthly bill that people face, and by remortgaging homeowners could save an average of £326 a month.   

It’s important to note that if you’ve been furloughed, remortgaging might be trickier, but not impossible.

If you choose to remortgage with your current lender for a similar loan size you may not need to go through affordability checks. However, if you decide to remortgage through a different lender or for a higher amount, it’s likely that you will need to go through affordability checks and that the lender’s decision will be based on your furloughed income only, excluding bonuses and overtime pay.

Each lender’s criteria varies so it’s important to seek advice from a mortgage broker before progressing with an application.

Find out how much you could potentially save by using our remortgage calculator.

Consider applying for a Green Homes Grant

The Green Homes Grant was announced by chancellor Rishi Sunak in his recent mini-budget. The policy means that citizens will be reimbursed for green home improvements.

Registration for the scheme opens in September, but it’s a good idea to consider what improvements would be suitable for your home now.

Making green improvements will not only have a positive impact on the environment, but also on your finances, as boosting the efficiency of your home means lower bills.

Talk to your landlord about a payment plan

If you’re renting and struggling to meet your monthly payments, have a conversation with your landlord.

In this time of national crisis, landlords are expected to work with tenants to create realistic payment plans for unpaid rent.

Reviewing the UK’s best mortgage lenders

To buy a home, unless you're lucky to be a cash buyer, you’ll need to borrow money from a mortgage lender. It used to be the case that you’d have to go to a building society to get a mortgage, but these days most banks offer mortgage products for homeowners.

In fact, there are more than 100 mortgage lenders in the UK, who together offer over 12,000 different mortgage deals.

On this page you can find reviews for 'major lenders' and 'specialist lenders' and everything in between.

Major lenders include what’s commonly referred to as ‘The Big Six’ - that’s Lloyds (including Halifax), Nationwide, Santander, RBS, Barclays, and HSBC - because these six lenders collectively account for the majority of all mortgage lending in the UK.¹

Specialist lenders, such as Kent Reliance and Fleet, usually specialise in mortgages for a certain type of customer. If you have a history of bad credit, for example, you may need to get a mortgage from a specialist lender.

And then there are all the lenders in between, such as Virgin Money, Metro Bank, Clydesdale and Accord who offer similar mortgages to the Big Six. They're just a bit smaller.

mortgage lenders market share pie chart

How many mortgage lenders are there?

There are around 100 mortgage lenders in the UK, which are mainly banks and building societies. Some are household names and others are specialists who you might not have heard of.

The biggest mortgage lenders

According to the latest data from UK Finance, these are the top five largest lenders in the UK²:

  1. The Lloyds Banking Group (includes Halifax) - £42.5 billion

  2. Nationwide Building Society - £35.7 billion

  3. Royal Bank of Scotland (includes NatWest) - £30.5

  4. Santander UK - £28.3 billion

  5. Barclays - £23.1 billion

UK Finance ranks lenders based on their market share. This means that the lenders listed here provided the most mortgages in 2018. 

The largest lenders are those that have lended the most.

Should I choose a high street mortgage lender?

Choosing a lender should depend on whether they’re the right choice for you and your situation.

Larger lenders do tend to offer a wider range of products and deals, but you may find that other smaller lenders can offer something better suited to you specifically. 

As mentioned above, if you have a more complicated case, like bad credit, you might need to go to a specialist lender for the best deal.

Speak to a mortgage adviser if you’re not sure which lender is right for your situation.

The fastest mortgage lenders

Based on our own data, we’ve found that on average lenders take just over 15 days to approve new mortgage submissions.

The fastest lenders are:

  1. Halifax - 6 days

  2. Bank of Ireland - 8 days

  3. HSBC - 8 days

  4. Nationwide BS - 9 days

  5. Coventry - 10 days

Keep in mind that not all lenders take on complex mortgage cases.

Specialist lenders like Kensington or Aldermore may take longer to approve applications from self employed or bad credit customers for example.

If time is of the essence then consider one of our faster lenders. 

But, if you have bad credit, are self employed or need a Help to Buy or Shared Ownership mortgage, then don’t rule out the specialist lenders best suited to your needs.

Speak to a mortgage adviser if you’re not sure which lender is right for your situation.

The best mortgage lenders

To decide the UK's best mortgage lenders we compared how satisfied their customers are.

We looked at publicly available complaints data to see how well lenders have been performing between January and June 2019.

In this time the Financial Conduct Authority (FCA) received almost 79,000 complaints across the 31 lenders we’ve focused on.¹

Of these 79,000 complaints, approximately 60% were officially upheld. 

An upheld complaint is when a complaint has been investigated to confirm that something went wrong.

We’ve chosen to look at the upheld complaints as opposed to simply the number of complaints. This is because it’s a more accurate way to see the number of valid and confirmed customer complaints.

The best lenders with the lowest percentage of upheld complaints were:

  1. Bank of Ireland

  2. Post Office

  3. Aldermore

  4. Atom Bank 

  5. Metro Bank

The lenders with the highest percentage of upheld complaints were:

  1. Coventry Building Society

  2. Woolwich

  3. Barclays

  4. Ulster Bank

  5. TSB

Finding the best mortgage lenders

When it comes to finding you a mortgage, we'll always search the market for the most suitable deal for your specific circumstances.

However, it's useful to know which lenders receive the least number of complaints, which process applications the quickest, and which will lend the most based on your income.

For example, knowing that Barclays and HSBC took an average of 22 days to process applications for our customers over a 12 month period (the longest of the 'big six' lenders) might encourage you to start the application process a little earlier than planned.

We've captured this data and more, to give you an idea of which lenders are top for these criteria and prepare you for a future application.

Compare mortgage lenders

You can use the data on this page and our detailed lender reviews to compare mortgage lenders.

If your personal circumstances aren't complicated, then you will be able to choose from almost any lender in the UK. You could compare lenders and go with one that will lend you more money or will submit your application faster.

If you have a history of bad credit, or you're looking for a more complicated mortgage like a buy to let or lifetime mortgage, there will be fewer lenders for you to choose from.

In either case, comparing and choosing lenders doesn't have to be complicated. A mortgage broker like Trussle will find out everything about your situation and always make sure they recommend the right lender and mortgage deal for you.

Apply with confidence

Online mortgage lenders

Online lenders, such as Digital Mortgages, are newer entrants to the market. They typically provide residential mortgages, but offer a purely digital experience rather than using call centers or branches.

Bear in mind that you'll need a smartphone available to apply. This applies to all applicants to the mortgage.

The benefits of using an online mortgage lender generally include a faster service than traditional non-digital lenders, and having the status of your application available at the click of a button.

Specialist mortgage lenders

Specialist lenders, such as Kensington and Aldermore, offer mortgage deals suitable for those who are self-employed or with poor credit histories.

Self-employed mortgage lenders

Historically it's been more difficult to get a mortgage if you're self-employed, but these days many lenders are more lenient about lending money to those in this situation.

For example, if you've saved enough for a good sized deposit, have a healthy credit rating, and have up to two years accounts showing a steady income, you'll likely have a chance of getting a mortgage with one of these lenders.

For those who don't have a large deposit, perfect credit history, or years of accounts available, there are specialist lenders who will also consider lending to you.

Bad credit mortgage lenders

If you have bad credit, this doesn't immediately mean you're not going to be eligible to get a mortgage. However it may reduce the number of lenders willing to assess your application.

If you're worried about your credit rating, it's worth sharing a copy of your credit report with your mortgage broker so they can look into which lenders might be most suitable to consider when searching for the right deal.

While there are lenders who are happy to help those with more severe credit issues, they'll typically offer less competitive deals with higher interest rates.

Help-to-buy mortgage lenders

There are many lenders who provide mortgages for those using the help-to-buy government scheme, such as Natwest, Nationwide, and HSBC.

It's important to remember that you'll need to apply for the equity loan directly on the government website to secure the funding for the deposit.

When picking a lender, your mortgage broker will be able to confirm the details of the equity loan, how this impacts your application, and the implications for when you remortgage in the future.

Shared ownership mortgage lenders

Unfortunately, not every lender offers shared ownership mortgages, so if you’re unsure about which ones do, it could help to seek help from a mortgage broker.

Some lenders that do offer shared ownership are Lloyds, Leeds Building Society, Nationwide and Kent Reliance.

Lenders that accept 5% deposits

There are around 90 lenders in the UK and about a third of them offer mortgages for people with a 5% deposit.

These lenders include:

Lenders don’t stipulate any special criteria to get this type of mortgage, but you’ll need a good credit score.

Because of coronavirus, most 5% deposit mortgages are temporarily unavailable. When the lockdown is lifted, it may be possible to get a 5% deposit mortgage again.

Check out our 95% mortgage guide to learn more.

The drawbacks of putting down a 5% deposit

Putting down only a 5% deposit on a home may seem the answer to your prayers, as it could get you on the property ladder much faster than you’d hoped.

But there are considerable disadvantages to putting down such a small deposit:

  • lenders will charge a higher rate

  • your monthly repayments will be higher than they would be with a larger deposit

  • you’ll end up paying more in total than you would with a larger deposit because of the amount of interest you’ll have to pay

  • most lenders are looking for a close to perfect credit score

Is buying a home with a 5% deposit right for you?

Think carefully before deciding to take out a mortgage with a 5% deposit.

One of the first things you need to make sure of is that you can afford the repayments. If you’re not certain what they’d be, get some free advice from a mortgage broker.

“A mortgage with a 5% deposit can be a big help, but whenever you’re borrowing money you need to be sure you can pay it back,” said Sam Amidi, a mortgage adviser at Trussle.

Lenders for bad credit

If you’re applying for a mortgage with bad credit then you might need to consider different lenders to those applying with less complex cases.

You can usually tell if you have bad credit because your credit score will be low. This can be due to things such as falling behind on scheduled payments or owing money to lenders or credit card companies. 

Some lenders might be unwilling to take on your application if your credit history isn’t great. 

This doesn’t mean you won’t be able to get a mortgage. But it may take longer to get a mortgage and you won’t have access to the best mortgage rates

We’ve kept an eye on which lenders have lent money to applicants with bad credit.

Our bad credit customers tend to borrow from these 5 lenders. We’ve listed them to show which lenders have supplied the most mortgages to Trussle customers with adverse credit.

Our best mortgage lenders for adverse credit

  1. Halifax

  2. Natwest

  3. Kensington Mortgages

  4. Accord

  5. Aldermore Mortgages

Frequently asked questions (FAQs)

Which mortgage lender lends the most?

Each lender will assess your circumstances against their own criteria, meaning the answer will be different for everyone. 

The important thing to remember is that you should be looking for the most suitable mortgage deal offered by a wide range of lenders on the market. A mortgage broker, like us at Trussle, can help you with this.

What documents do mortgage lenders typically need?

Lenders will typically ask for three months worth of bank statements and payslips, a photo ID, and an address ID. Depending on your credit score, they may also ask for a copy of your credit history.

Will a mortgage lender help me with a bad credit score?

A number of mortgage lenders specialise in lending to those who may not have the best credit history. Speaking with a mortgage broker will help you find the most suitable specialist lender for your circumstances.

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Your home could be repossessed if you don't keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage.

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Sources

¹ UK Finance - Largest mortgage lenders

² FCA - Firm specific complaints data