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Is there a mortgage for a Teacher?

You may have seen mortgages advertised as ‘Teacher Mortgages’,  but there really is no such thing! A mortgage for a Teacher is similar to any other mortgage for a professional worker. There are mortgages, offers and even a building society dedicated to the teaching profession but, as with any mortgage, the best mortgage for you will be based on your financial situation and buying needs – not just your profession.

Why are there so many options of mortgages for a Teacher?

Well, the truth is lender’s LOVE teachers because they are considered ‘low-risk applicants’. This means that Lenders believe teachers will more than likely have a steady, reliable and consistent income. Therefore will be able to pay their mortgage back reliably. Since lender’s base their mortgages offered largely on risk and affordability, teachers are able to easily evidence both of these factors. 

What benefits are available with mortgages for a Teacher?

All mortgages that are offered to other professions are generally considered when teachers are applying for a mortgage. There are no specific ‘teacher mortgages’ that will be better than other products. Teaching is a career that is in high demand, therefore lenders will sometimes look favourably on  teachers who are starting their career. More so than other new starters in their profession. The perks that teachers could receive are:

  • Career progression is taken into account. A pay rise in September could be considered when calculating affordability, before the pay rise comes into effect.
  • If you choose to go with The Teachers Building Society, they could even consider up to 5 times a teachers income.
  • New teachers are supported. If you have not yet started your teaching role (in a new school, your first job as a teacher or you are on maternity leave) and you have a contract secured it could be considered when calculating affordability, before the pay rise comes into effect.

These are not guaranteed, however could potentially mean that your property goals are secured based on your teaching role.

Should I use the Teachers Building society?

Quite simply put, you should use the lender that gives you the best offer. If that’s the Teacher Building Society, great – there could be better options available considering your whole financial situation. That’s where a Clements Financial Broker is essential in providing you with a variety of options bespoke for you. 

For more information you can visit the website directly:

https://www.teachersbuildingsociety.co.uk/

What mortgages are available to teachers?

All mortgages are available to teachers who are buying properties such as:

  • Fixed rate – a mortgage where your interest rate remains the same throughout the duration of the fixed mortgage period. 
  • `Variable rates – your mortgage capital payments will remain the same however the interest you pay back on the loan will vary (up/down) in line with the prime interest rate. 
  • `Tracker rates – The interest you pay back on a monthly basis is dependent on the Bank of England’s Base Rate.
  • Interest only – a mortgage where you only pay the interest charged on the loan for a certain period of time, rather than payments going towards your equity in the property. 
  • Discount rates – a mortgage with an interest rate that has been set below the standard variable interest rate. 
  • Buy to Let – for buyers wanting to rent out the property purchased, rather than live in the property themselves.
  • Remortgages – 

If you are a first time buyer you could also qualify for the schemes offered below:

  • Shared ownership – Buying a percentage of a property rather than the whole property.
  • Right to Buy – allowing council tenants to buy their council house at a reduced price.

First Homes scheme – specific new build providers offering 30-50% discount on specific affordable housing for first time buyers. Key workers (including teachers) are particularly members who the scheme has been designed to benefit.

Read more: Is there a mortgage for a Teacher?

Is there a saving scheme for teachers?

If you are saving a deposit for your first home, then a LifeTime ISA (LISA) could potentially be beneficial for you. The government could also potentially reward you with a 25% bonus, every tax year, if you have set up and paid into the LISA with the correct criteria (when you are using the funds towards your first home). 

Find more information on the website directly: https://www.gov.uk/lifetime-isa

Do teachers need Protection Insurance?

YES. In our professional opinion, everyone should have different forms of insurance – especially when you are a homeowner. There can be a negative association with the cost versus output of insurance policies. However, if the worse were to happen these policies are well worth the monthly payments. The insurance types available for teachers are the same as other homeowners. Although, insurance could be deemed essential for the people working in the profession. 

Most teachers assume their ‘sick pay’ will cover them, however long term sickness can be financially devastating and statutory sick pay is not always enough to maintain your financial responsibilities. An ‘Income Protection’ policy would provide you with income to add towards this, depending on how much earnings you have insured against. ‘Life insurance’ is more to protect the financial responsibilities of those who are financially dependent on you – this policy could pay off your mortgage for the dependents/spouse left behind. Whereas ‘Critical Illness Cover’ is a type of personal cover which will pay out a lump sum, should you be diagnosed with a serious illness, funds which you could use to support your added medical needs or alleviate other financial pressure during this time.

Clements Financial offer the following insurance policies through multiple providers:

  • Life Insurance
  • Critical Illness Insurance
  • Income Protection 
  • General Insurance (Buildings and Contents)

(See our Insurance section for more details on each type of insurance)

Can I use my Teacher Pension towards my mortgage?

YES. Even better than just being able use your teacher pension towards your mortgage, lenders generally offer retired teachers the same products as employed teachers. If you are getting a mortgage based on your teacher pension payments you are able to borrow money for much longer than if it was based on your employed income. Allowing you to borrow money into your 90’s – compared with your employed maximum retirement age!

https://clementsfinancial.co.uk/contact-us/