HSBC has announced an important update to its residential mortgage lending criteria, making it easier for certain applicants on fixed-term employment contracts to be assessed under its standard employment policy.
The change could improve mortgage options for a number of professionals, particularly medical doctors, teachers and eligible UAE residents, who may previously have faced additional lending restrictions because of the nature of their employment.
Here’s what has changed and what it could mean if you’re applying for a mortgage.
Quick Summary
HSBC has updated its mortgage lending criteria for certain borrowers employed on fixed-term contracts. Medical doctors, teachers (excluding supply teachers and teaching assistants) and qualifying UAE residents with a total contract duration of three years or more will now be assessed under HSBC’s standard employment criteria. Applications for these customers should be submitted as permanently employed, potentially making the mortgage application process more straightforward.
What Has HSBC Changed?
Following feedback from mortgage brokers and intermediaries, HSBC has revised how it assesses some applicants employed on fixed-term contracts.
Under the updated policy, the following applicants will now be treated under HSBC’s standard employed criteria:
- Medical doctors
- Teachers (excluding supply teachers and teaching assistants)
- UAE residents with a total fixed-term contract duration of three years or more
Applications for these borrowers should now be submitted as permanently employed, rather than under HSBC’s fixed-term contract policy.
Why Is This Important?
Many professionals work on fixed-term contracts despite having stable, long-term careers.
Historically, some lenders have applied additional criteria to applicants on fixed-term contracts, sometimes requiring:
- Longer employment history
- Evidence of contract renewals
- Additional documentation
- More detailed affordability assessments
By assessing eligible applicants under its standard employment policy instead, HSBC has simplified the process for many borrowers.
For some applicants, this could improve both the mortgage application experience and the range of products available.
Who Could Benefit?
The changes are particularly relevant for:
Medical Doctors
Doctors often work on rotational or fixed-term NHS contracts early in their careers. Under HSBC’s revised criteria, many may now be assessed in the same way as permanently employed applicants.
Teachers
Teachers employed on fixed-term contracts may also benefit, although the policy specifically excludes:
- Supply teachers
- Teaching assistants
UAE Residents
Borrowers living and working in the UAE with a combined contract duration of at least three years may also qualify under the revised policy.
What Does This Mean for Mortgage Borrowers?
Although this is a positive change, it’s important to remember that every mortgage lender has different employment criteria.
One lender may assess a fixed-term contract applicant very differently from another.
Factors such as:
- Employment history
- Income stability
- Profession
- Affordability
- Credit profile
will still influence the outcome of a mortgage application.
This is why selecting the right lender remains one of the most important parts of the mortgage process.
Oportfolio Insight
At Oportfolio Mortgages, we always encourage clients to look beyond headline interest rates.
This latest update from HSBC is a good example of why lender criteria can be just as important as mortgage pricing.
For professionals such as doctors and teachers, understanding which lenders have the most suitable employment policies can significantly improve your mortgage options and, in some cases, make the application process much more straightforward.
It’s also another encouraging sign that lenders are continuing to review their criteria in an effort to support more borrowers in today’s market.
Key Takeaways
- HSBC has updated its mortgage criteria for certain fixed-term contract workers.
- Medical doctors, eligible teachers and qualifying UAE residents may now be assessed under standard employment criteria.
- Applications should be submitted as permanently employed where the new policy applies.
- Every lender assesses fixed-term contracts differently.
- Speaking to a whole-of-market mortgage broker can help you identify the lender whose criteria best suit your circumstances.
Need Mortgage Advice?
If you’re employed on a fixed-term contract and would like to understand your mortgage options, we’d be delighted to help.
At Oportfolio Mortgages, we regularly help professionals with complex employment arrangements, including doctors, teachers, contractors and internationally employed clients. We’ll compare lenders from across the market and recommend the mortgage that’s most suitable for your individual circumstances.
Get in touch today for independent, whole-of-market mortgage advice.
