Zero Hours Contract Mortgage
A zero hours contract does not rule out a mortgage. What lenders actually test is how long you have been with the employer and how stable the income has been, not what the contract is called.
- The service and stability test Pepper Money publishes
- Why two years with one employer changes the answer
- How variable hours are averaged
- What to do if your hours fluctuate sharply
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Length of service is the test, not the contract type
Pepper Money publishes a clear position on zero hours work: it is acceptable where the applicant holds a permanent position with two years or more at the same employer and stable income levels. That single sentence contains the whole test, and both halves have to be satisfied.
The reasoning is straightforward once you see it from the underwriting side. A lender is not worried about the words on the contract. It is worried about whether the money will keep arriving. Someone who has worked the same shifts for the same NHS trust or the same hotel group for three years has demonstrated durable income, whatever the contract says. Someone six months into a first zero hours role has not yet.
The second half, stable income levels, is where cases are usually won or lost. Twelve months of payslips showing a broadly consistent monthly figure is a strong position. Twelve months swinging between very quiet and very busy months is harder, and a lender will typically work from a conservative average rather than your best months.
If you also hold a second role, read our second job income and how many income sources lenders count pages, because some lenders cap how many income sources they will count. GOV.UK sets out what a zero hours contract is and the rights attached to it in its guidance on zero hours contracts.
At a Glance
How zero hours income is assessed
The first row is a published lender position. The remaining rows describe the general market approach, because most lenders do not publish a dedicated zero hours policy.
| Situation | Usual treatment | What helps |
|---|---|---|
| Two years or more at the same employer, stable income | Pepper Money publishes that zero hours work is acceptable where the applicant holds a permanent position with 2 years or more at the same employer and stable income levels | Twelve months of payslips showing a consistent monthly figure |
| Under two years at the employer | Harder, and often assessed case by case rather than to a published rule | Evidence of the same work with a previous employer, and a clear reason for the move |
| Income varies sharply month to month | A conservative average is normally used rather than your strongest months | A full twelve months of payslips so the average is representative rather than a snapshot |
| Zero hours alongside a second income | Both may count, but some lenders cap the number of income sources per applicant | Pepper Money publishes a maximum of 2 income sources per applicant, so plan around which two matter most |
Criteria correct as at 14 August 2026. Zero hours position and the income source cap from the Pepper Money Mortgage Criteria Guide. Other rows describe the general market approach rather than a named lender policy. Correct as at 14 August 2026. Criteria change without notice. Lender criteria change without notice and this table is a general guide, not advice or an offer of credit. Your own circumstances, the property and the lender’s assessment at the time will determine what is actually available to you.
What a zero hours case needs
These applications are decided on the payslip history more than on anything else, so a full twelve months is worth gathering before you apply. GOV.UK explains how additional pay sits within your overall earnings in its guidance on Income Tax rates and allowances.
Where to go next
The pages most often read alongside this one.
Agency Worker Mortgage
Some lenders exclude agency income outright. Knowing which saves a wasted application.
Second Job Mortgage
Whether a second job counts usually turns on how long you have held it and whether the hours overlap.
Overtime Income Mortgage
Regular overtime is often used in full. Occasional overtime often is not.
How Many Income Sources?
Some lenders cap the number of income sources per applicant. That cap can decide the case.
Fixed-Term Contract Mortgage
Time left to run, renewal history and profession all feed the decision.
Professionals With Complex Income
Bonus, commission, overtime, multiple roles and income that does not fit a standard payslip.
Self-Employed Mortgages
The main guide: how lenders assess self-employed income, what they ask for and which lenders are worth approaching.
Contractor Mortgage Calculator
Annualise a day rate the way lenders do and see the borrowing it supports.
How we place a self-employed or complex income case
Specialist lenders underwrite manually, so how the income is evidenced and presented genuinely changes the outcome.
Establish how you are actually classed
Lenders do not all draw the line in the same place. Precise treats anyone with a shareholding of 25% or more, or who is responsible for paying their own tax and National Insurance, as self-employed. Getting this right first decides which criteria apply to you.
Read the accounts the way an underwriter will
We work from your tax calculations, tax year overviews and finalised accounts rather than a rough turnover figure, because the number a lender uses is often materially different from the number you think of as your income.
Match the income shape to the right lender
Latest year or average, salary and dividends or share of net profit, one year of accounts or two – these are lender policy choices. We place you against published criteria rather than guessing.
Package the case properly
Specialist lenders underwrite manually. A clear note explaining a dip in profit, a change of trading style or a new contract usually carries more weight with an underwriter than the raw figure on its own.
Plan the next few years
Trading history builds. We look at whether waiting for one more set of accounts, or how you draw income between now and then, would open up materially better options at your next remortgage.
Read More About Contract Income
Day rates and short contracts are lent on every day, by the right lenders.
Self-Employed Mortgage Guide
How lenders actually read accounts, day rates and dividends.
Contractor Mortgages
Day-rate lending without two years of accounts, and who offers it.
Low Deposit Mortgages
What is realistic at five per cent, and which lenders still look at it.
Zero hours does not mean no mortgage
Tell us how long you have been with your employer and what the last twelve months look like. We will tell you honestly what is realistic now.
Read more about our agency worker mortgages, second job income or self-employed mortgages guide.
Zero Hours Contract Mortgages - Frequently Asked Questions
Can I get a mortgage on a zero hours contract?
Yes, with the right lender and the right history. Pepper Money publishes that zero hours work is acceptable where the applicant holds a permanent position with two years or more at the same employer and stable income levels. Both parts of that test matter, and the contract label itself is not the deciding factor.
How long do I need to have been in the job?
Two years with the same employer is a common threshold and is what Pepper Money publishes. Shorter histories are assessed case by case rather than to a published rule, and evidence of the same type of work with a previous employer helps considerably.
How do lenders work out my income if my hours vary?
Usually by averaging, and usually conservatively. A full twelve months of payslips gives the most representative average and protects you from being assessed on a quiet quarter. Expect the lender to work from something closer to your typical month than your best month.
What if my hours dropped for a few months?
Explain it in writing with the application rather than waiting to be asked. A drop caused by illness, a seasonal lull or a temporary change in the employer schedule is very different from a sustained decline, and an underwriter can only take that into account if they know about it.
Do I need payslips or a contract?
Both, in most cases. Payslips evidence what you have actually earned and the contract or written statement of terms evidences the arrangement. Twelve months of payslips is the single most useful document set for this type of application.
Is zero hours income treated like self-employment?
No. You are an employee, so you are assessed from payslips rather than accounts. The caution lenders apply is about the variability of the income, not about employment status. That distinction matters, because it means you do not need years of accounts.
Can I combine zero hours income with another job?
Often yes, though some lenders limit how many income sources they will count. Pepper Money publishes a maximum of two income sources per applicant. Where you have three or more, it is worth planning which two carry the most weight.
Does a bigger deposit help?
It helps in the same way it helps any application, by reducing the loan to value and widening the lender list. It does not remove the service or stability tests, but a lower loan to value does make a marginal case easier for an underwriter to accept.
What if I have just moved to a permanent contract?
That usually helps, and it is worth timing an application around it where you can. A permanent contract with a guaranteed minimum removes the variability question entirely, which typically widens the lender list.
Are agency and zero hours the same thing?
No. Agency work means your assignment comes through an agency, and some lenders exclude agency income outright. Zero hours means the employer does not guarantee hours, but you are employed directly. The distinction matters because the lender lists are different.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.