What is a professional mortgage?
A professional mortgage is a mortgage that comes with enhanced terms for people in specific careers. Lenders offer them because roles such as doctor, lawyer and accountant tend to follow a predictable path, with income that climbs steadily and unemployment that stays low.
Those terms might mean a higher income multiple of up to 5 or 6 times salary, a smaller deposit, a more generous view of complex income such as partnership drawings (the share of profits a partner in a firm takes as pay), and sometimes a preferential interest rate. What you actually get depends on the lender and on your profession.
Which professions qualify?
The professions lenders recognise most often are doctors, dentists, veterinary surgeons, solicitors, barristers, chartered accountants, architects, surveyors and actuaries. A number of lenders stretch professional terms further, to airline pilots, engineers and senior public sector roles.
Every lender keeps its own list, and two lenders may define the same profession differently. One might insist on membership of a particular professional body; another just wants proof of your qualification and that you are employed. Your broker can tell you which lenders count your profession and how each one draws the line.
Higher income multiples
The income multiple is usually where a professional mortgage earns its keep. A standard lender tends to cap borrowing at 4 to 4.5 times your income, whereas a professional product might stretch to 5, 5.5 or even 6 times. On a £60,000 salary that is the gap between borrowing £270,000 and £360,000, which changes what you can realistically buy.
A few lenders will also weigh your projected future income when they work out affordability (whether you can comfortably keep up the repayments). For a junior doctor or trainee solicitor whose pay is set to double over the next few years, that can lift how much they are able to borrow by a real margin.
How to apply
Applying for a professional mortgage runs along much the same lines as any other mortgage. You will need proof of income, identification, bank statements and the details of the property you want to buy. On top of that, most lenders will ask for evidence of your qualification or your membership of a professional body.
A broker who works with professional mortgages regularly can put your application in front of the lenders most likely to offer enhanced terms. They will already know who is pricing competitively for your profession and your particular situation, which saves you approaching lenders that were never going to say yes.