Mortgages for Solicitors

Are there specific mortgages for legal professionals such as solicitors, lawyers and barristers?

I wouldn’t go as far to say there are mortgages just for legal professionals, but there are professional mortgages which apply to people in the legal world – along with medical, accounting and finance professionals.

Generally, they are linked to people who are newly qualified. So if you’ve been a solicitor or barrister for 25 years, you won’t necessarily find any specific products or mortgages to suit you.

What type of mortgage deals are available for legal professionals?

There are certain mortgages and products available for newly qualified professionals. The advantage of those products is that they will generally give you a greater borrowing amount against your income.

That’s because being newly qualified, we would expect your income to rapidly increase over the next few years – certainly above inflationary pay increases – as you move on in your career.

So the lenders offering those professional mortgages lend more – they are in effect using some of that future income as part of their calculations. In terms of mortgage rates, though, they can be slightly worse. You’re accessing greater borrowing rates, but not necessarily better products.

The very best rates will generally come from the standard, vanilla mortgages. So it’s not the rate we’re chasing, it’s affordability and underwriting with those types of products.

Are there exclusive deals for law firm partners?

I would suggest that a Partner has probably been qualified for quite a while, and will usually sit outside of the period required to access those professional products.

But again, those customers may well require specialist underwriting to get a good mortgage. We can speak to certain high street lenders about that, so you don’t need to get too hung up about mortgage products specifically for professionals.

It’s more important to work with lenders and underwriters who understand legal professionals like solicitors, barrister and lawyers.

How long do you need to have been qualified to access professional mortgage products?

Not many lenders offer these mortgages, but the ones that do generally limit you to five years from qualification. One lender, however, goes up as far as 10. With that lender, it’s going to take you quite a fair way into your career. Beyond that, we’re not going to be accessing professional products.

How do I know if I’m eligible for a mortgage designed for legal professionals?

There’s the qualification period that we just mentioned, and solicitors, for example, tend to be either trainees or fully qualified.

Trainee solicitors won’t be able to get professional products yet, but we can access lenders who understand they will qualify in the near future. The moment you do qualify, a lender’s going to check that you’re on Law Society registers, and confirm that the date is within that qualifying period.

As I say, for a couple of lenders you need to be within a five year period, but we’ve got one that can go out to 10 years.

What are the main issues affecting solicitors, lawyers and barristers obtaining a mortgage?

It depends on which legal profession you’re in and where you are on your career path.

I touched earlier on trainees, who will usually be on a fixed term contract. So there’s the first issue. Some lenders get a bit worried about a fixed term contract and what you’re going to be doing afterwards. We have to overcome those issues.

Once you‘ve qualified, it’s all about affordability. It depends if we need to push that affordability out or not. As you get further into your career and become a partner, or a barrister who is a sole trader, we’re moving into the issues around being self-employed.

From a solicitor’s point of view, if you become a partner in a large practice, your percentage ownership of that practice could be very small, even 0.1% or 0.5%.

As far as HMRC are concerned, that means you are self-employed with a partnership income. But some lenders will treat you as employed if you have a small percentage shareholding. We just need something from the accountant, your finance team or somebody high up in the firm to confirm that you’re a partner of the firm on a fixed profit share.

Another issue is barristers and aged debt. That’s always an issue where you’ve done a lot of work but you haven’t been paid for it yet. We have had some success in getting lenders to look at that aged debt and understand it will be coming through in the future.

If you don’t need that to be taken into account and your profits simply support the mortgage, it’s less of a problem.

Can I still get a mortgage if I’m a trainee solicitor, lawyer or barrister?

A trainee solicitor will normally have a contract for two or three years. That in itself is not too much of an issue. Some lenders will be happy with that, although once you’re qualified it’s easier.

Obviously, it depends on the terms of your new job. A lot of solicitors will continue to work for the firm they were with as a trainee. That’s why firms see them through training, because they hope to take them on afterwards.

In that case, you have continuity of employment with the same firm, albeit on a new employment contract. If that’s not the case and you’re going from one firm to another, there may be probationary periods. But again, it’s not generally an issue. Either situation is absolutely doable, but not with every high street lender.

What eligibility criteria do I need to meet as a solicitor, lawyer or barrister?

If you’re employed we would normally need three months’ pay slips. If you don’t have those because it’s a new job, a copy of your contract is the minimum, plus whatever pay slips you do have.

If you’ve changed firms, we might need old pay slips as well, to show what you were earning before. But proof of income is largely straightforward.

From the self-employed angle, it depends how a lender looks at it. The norm is that you need two to three years’ accounts, but one or two lenders will work off your first year’s figures. But as I mentioned earlier, if your partnership share is less than 20%, that requirement for the two years accounts will be waived. They will look at you as a salaried individual if you’re on a fixed profit share.

Anything above and beyond fixed profit share does become a little bit more difficult and might require a track record, but certainly the base profit share you draw should be quite easy.

Barristers are normally sole traders, and we would be looking at one year’s accounts, probably two.

How is mortgage affordability assessed for barristers, solicitors and lawyers?

Affordability isn’t just about what you earn. It’s about a number of things and, after income, the next biggest one is outgoings. Most lenders use Office of National Statistics data to assess what you might spend on food, gym memberships, holidays and that kind of thing. Some will go into specific details, but most won’t.

They will want to understand any credit you have, such as credit cards not cleared in full, loans – including student loans – childcare and school fee costs.

The mortgage term also affects affordability. As most mortgages are on a repayment basis, the longer the mortgage, the lower the payments. So you can borrow more on a 30-year mortgage than on a 15-year mortgage, because the payments will be much higher on a shorter term. The obvious thing is to take the term out as long as possible, but your age might affect the options.

Finally, the other key thing is your level of deposit. The bigger that deposit is, the safer it is for the lender and the better rate they will give you. That means lower payments, which helps with affordability as well.

What is my borrowing potential as a lawyer for my mortgage? Can lawyers borrow mortgages up to six times their income?

Let’s assume you have a 25, 30 or 35 year mortgage and no credit costs, no childcare or school fees and the deposit is reasonable. An income multiplier is a good yardstick.

It only becomes a problem when you start to vary those other elements – if you’re reducing the mortgage term, or you’ve got a load of debt, your mortgage might not max out.

Generally non-professionals can get probably five times income without too much difficulty. The professional products we access generally go up to five and a half. One lender indicates six, but in the current climate, with interest rates higher than they were two years ago, it’s quite difficult to get that six times [podcast recorded in July 2024].

But certainly five and a half shouldn’t be too difficult if all those other factors are aligned. We might get somewhere between five and a half and six as a professional.

Can I get a mortgage seven times my salary as a solicitor, lawyer or barrister?

Right now, I would say no. Although there’s more chance if interest rates come down. We’re already seeing some lenders starting to get a bit more generous with affordability.

As an example, we might be working with a barrister where we’re asking for seven times the average of their last two years’ profit, but it’s because there’s quite a large amount of aged debt there. It might appear to be seven times their current income, but there’s other income that we’re asking an underwriter to look at.

It might be that you’re asking for a mortgage that is seven times your current income, but perhaps you’re about to become a partner, which is going to bump your earnings up massively. We could get that used before you even receive it.

So in its most basic format, seven times is not possible unless there’s a good reason. If you’re earning £50,000, a seven times multiplier means a mortgage of £350,000. If the immediate outlook for your income is no different, it’s not going to happen.

Do you have any final thoughts before we come back with Part Two?

For an average member of the public, mortgages are fairly complex – and at times difficult to obtain, especially in recent years with interest rates being that much higher.

For a professional with unusual elements within their income, or being newly qualified or on a trainee contract, it’s even more difficult. So finding a broker that understands those professions, and has relationships with lenders who also understand, is invaluable.

So I would just say that it’s a good idea to engage the services of a broker that knows the industry you work in.

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