Mortgage lenders for furloughed workers

If your employer has put you on furlough it may affect how much you can borrow. And how many mortgage deals are available to you.

You may still be able to get a mortgage if you're on furlough. As long as you have a letter from your employer stating you'll be going back to work. 

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

Some lenders will accept top-up pay from your employer when working 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 how lenders are reacting to coronavirus. And how the pandemic impacts the housing market.

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

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. This is up to £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 accepts 50% of overtime, shift allowance and commission income. As long as you can show that you've been getting it regularly over the last 3 months. They will not accept bonus income.

If you've just gone back to work or will be soon, you may need to provide payslips. This is to show your current income and pre-furlough income. You may also need a return to work letter from your employer confirming everything.

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 £2,500 a month (£30,000 a year).

Halifax may consider your regular pre-furlough bonus, overtime and commission income.

If you've recently gone back to work or will be soon, you may need to provide payslips. This is to show your current income and pre-furlough income. You may also need a return to work letter from your employer confirming everything.

HSBC will accept your furloughed income when applying for a mortgage. But you must have a letter from your employer confirming that you'll be going back 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 £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 you're guaranteed top up salary.

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 gone back to work or will be soon, you may need to provide payslips. This is to show your current income and pre-furlough income. You may also need a return to work letter from your employer confirming everything.

Nationwide will accept your furloughed income when applying for a mortgage. But you must be going back 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 £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.

They will not accept extra income, such as bonuses, overtime or commission when working out how much they'll lend you.

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

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 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 £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.

They will not accept extra income, such as your bonus, overtime or commission when working out how much they'll lend you.

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

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 £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.

They will not accept extra income, such as your bonus, overtime or commission when working out how much they're willing to lend you.

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

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

Your employer must confirm when you'll be going back to work and if you'll be going back full time or part time.

They will not accept extra income, such as your bonus, overtime or commission when working out how much they can lend you.

If you've recently gone back to work or will be soon, you may need to provide payslips. This is to show your current income and pre-furlough income. You may also need a return to work letter from your employer confirming everything.

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

You can stay in control of your homeownership and mortgage costs. This can help prepare you for financial changes during coronavirus.

For the average borrower, the market leading deal and the average Standard Variable Rate (SVR) is around £4,500 in extra interest each year. This amount can go a long way to 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.

Review your mortgage 3 to 6 months before the end of your initial period so you have time to find and switch to a new deal.

Mortgage payment holidays have been a lifeline for some people during coronavirus and lockdown.

If you’ve been on furlough and are worried about your employment, speak to your broker about a payment holiday.

Learn more about coronavirus and mortgage payment holidays

You can also ease financial pressure by switching your payment plan to interest only.

Changing your repayments so you only pay interest can save you a lot on your monthly payments. You can use the money you save into a savings account or used for other expenses.

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

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

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 ask a mortgage broker like Trussle to see if they could save money.

If you’re worried about how the furlough scheme will impact your job when it ends, it's good to check your mortgage.

Mortgages are often the biggest monthly bill that people face. So remortgaging homeowners could save an average of £326 a month.

If you’ve been furloughed, remortgaging might be harder, but not impossible.

If you remortgage with your current lender for a similar loan size you may not need to go through the affordability checks. If you remortgage with a different lender or for more money, you're likely to need to.

The lender will decide based on your furloughed income only. This does not include bonuses and overtime pay.

Each lender’s criteria varies. So it’s good to get advice from a mortgage broker before continuing with an application.

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

Chancellor Rishi Sunak announced the Green Homes Grant in his mini-budget. The policy reimburses citizens for green home improvements.

Registration for the scheme opens in September 2020. But it’s good to consider what improvements would be suitable for your home now.

Making green improvements will be good for the environment and your finances. So by boosting the efficiency of your home means lower bills.

If you’re renting and find it hard to meet your monthly payments, speak to your landlord.

Landlords are expecting to work with tenants to create 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. You used to have to go to a building society to get a mortgage. These days most banks offer mortgage products for homeowners.

There are over 100 mortgage lenders in the UK. Together they offer over 12,000 different mortgage deals.

We've included reviews for 'major lenders' and 'specialist lenders'.

Major lenders include 'The Big Six’. These are Lloyds (including Halifax), Nationwide, Santander, RBS, Barclays, and HSBC. Together these 6 lenders account for most of the mortgage lending in the UK.¹

Specialist lenders like Kent Reliance and Fleet specialise in mortgages for certain customers. If you have a history of bad credit, you may need to get a mortgage from a specialist lender.

There are also lenders such as Virgin Money, Metro Bank, Clydesdale and Accord. They offer similar mortgages to the Big Six but are a bit smaller.

mortgage lenders market share pie chart

How many mortgage lenders are there?

There are around 100 mortgage lenders in the UK. These 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.

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. You may find that other smaller lenders can offer something better suited to you.

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, on average lenders take around 20 days to approve new mortgage submissions.

The time to approve mortgages has gone up a lot since the start of coronavirus. The average was closer to 10 days in 2019 and up until June 2020.

Fastest lenders in September 2020

  • Barclays - 10 days

  • Halifax - 14.5 days

  • BM Solutions - 17 days

  • Coventry Building Society - 18 days

  • HSBC - 19 days

This data is based on how long it takes mortgage lenders to approve mortgages after we submit them. Not all lenders take on complex mortgage cases.

It might take specialist lenders longer to approve applications from self employed or bad credit customers.

If you need your application approved quick consider one of our faster lenders.

Do not rule out specialist lenders who are best suited to your needs if you:

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 lenders, we compared how satisfied their customers are.

We looked at public complaints data to see how they performed between January and June 2019.

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

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

An upheld complaint is when they investigate a complaint to confirm that something went wrong.

We’ve chosen to look at the upheld complaints rather than the number of complaints. This is a more accurate way to see the number of valid and confirmed customer complaints.

Best lenders with the lowest percentage of upheld complaints

  1. Bank of Ireland

  2. Post Office

  3. Aldermore

  4. Atom Bank 

  5. Metro Bank

Lenders with the highest percentage of upheld complaints

  1. Coventry Building Society

  2. Woolwich

  3. Barclays

  4. Ulster Bank

  5. TSB

Finding the best mortgage lenders

When finding you a mortgage, we'll always search the market for the most suitable deal for your situation.

It's useful to know which lenders:

  • get the fewest complaints

  • process applications the quickest

  • lend the most based on your income

Barclays and HSBC took an average of 22 days to process applications for our customers over a 12 month period. This was the longest of the 'big six' lenders. Knowing this might make you want to start the application process sooner.

We've captured data to give you an idea of which lenders are top for these criteria. This can help 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 are simple, 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 the most or submit your application faster.

There'll be fewer lenders to choose from if you have bad credit.

Or if you want a more complicated mortgage like a buy to let or lifetime mortgage.

Comparing and choosing lenders does not have to be hard. A mortgage broker like Trussle will find out everything about your situation. They'll always make sure they recommend the right lender and mortgage deal for you.

Online mortgage lenders

Online lenders, such as Digital Mortgages, are newer to the market. They often provide residential mortgages. But are digital only so do not use call centres or branches.

You'll need a smartphone available to apply. This applies to all applicants to the mortgage.

The benefits of using an online mortgage lender are that it's often faster. You can also check the status of your application available at the click of a button.

Specialist mortgage lenders

Specialist lenders like Kensington and Aldermore, offer mortgage deals suitable for the self-employed or people with poor credit histories.

It's harder to get a mortgage if you're self-employed. But these days many lenders are more likely to lend money to those in this situation.

You have a higher chance of getting a mortgage with one of these lenders if you have:

  • saved up a good sized deposit

  • a healthy credit rating

  • up to 2 years accounts that show a steady income

Specialist lenders may lend to you even if you do not have a large deposit, perfect credit history, or years of accounts.

If you have bad credit, it does not mean you're not eligible for a mortgage. But it may mean there are fewer lenders willing to assess your application.

If you're worried about your credit rating, it's worth giving your broker a copy of your credit report. They can then look at which lenders might be most suitable to consider when searching for the right deal.

There are lenders who are happy to help those with more severe credit issues. But they often offer less competitive deals with higher interest rates.

There are many lenders who provide mortgages for those using help to buy scheme.

These include Natwest, Nationwide, and HSBC.

You'll need to apply for the equity loan on the government website to get the funding for the deposit.

When picking a lender, your mortgage broker will confirm the details of the equity loan. As well as how this impacts your application and the implication when you remortgage.

Not every lender offers shared ownership mortgages. So if you’re not sure which ones do, it could help to speak to a mortgage broker.

Some lenders that offer shared ownership include:

  • Lloyds

  • Leeds Building Society

  • Nationwide

  • Kent Reliance

Lenders that accept 5% deposits

There are around 90 lenders in the UK. About 1/3 of them offer mortgages for people with a 5% deposit.

These lenders include:

Lenders do not 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 unavailable. When lockdown is lifted, it may be possible to get a 5% deposit mortgage again.

Learn more in our 95% mortgage guide.

Only putting down a 5% deposit on a home may seem like the best way to get you on the property ladder faster than you’d hoped.

But there are disadvantages. If you put 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 pay more in total than you would with a larger deposit because of the interest you’ll have to pay

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

Think about it before you decide 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 sure 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.” - Sam Amidi, a mortgage adviser at Trussle.

Lenders for bad credit

If you have bad credit, you might need to consider different lenders to those applying with a basic case.

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

Some lenders might not take your application if your credit history is poor.

This does not mean you will not be able to get a mortgage. But it may take longer to get a mortgage and you will not 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. The following lenders have offered the most mortgages to Trussle customers with poor credit.

Our best mortgage lenders for adverse credit

  1. Halifax

  2. Natwest

  3. Kensington Mortgages

  4. Accord

  5. Aldermore Mortgages

More about lenders

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

Remember to look for the most suitable mortgage deal offered by a wide range of lenders on the market. A mortgage broker, like Trussle, can help you with this.

Lenders will often ask for:

  • 2 months of bank statements and payslips

  • a photo ID

  • an address ID

  • a copy of your credit history - depending on your credit score

Many mortgage lenders specialise in lending to those who do not have the best credit history.

Speaking to a mortgage broker will help you find the most suitable lender for your situation.

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Get a mortgage with Trussle today

  • Fee-free online mortgage broker

  • Rated 4.9/5 on Trustpilot - the UK's top rated online mortgage broker

  • Thousands of deals from 90 lenders

  • Straightforward online application process

  • No waiting for appointments

  • No paperwork

  • Free ongoing mortgage monitoring

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.

What people are saying about Trussle...

Sources

¹ UK Finance - Largest mortgage lenders

² FCA - Firm specific complaints data