Key Worker Mortgage
Key Worker Mortgage
The Key Worker Mortgage programme is a government initiative giving public sector workers financial help in getting a foot onto the property ladder, near to their place of work. Those who may be eligible for a Key Worker Mortgage are as follows:
- Nurses, or other NHS clinical workers - School teachers and those who also teach in sixth form colleges and further education - Police officers and some civilian staff in police forces - London planners, Occupational Therapists, educational psychologists, and social workers employed by local councils. - Full-time junior fire officers, and retained fire fighters
In the past, many key workers were not able to obtain enough funds from a mortgage to afford a place of residence close to their workplace.
Different schemes have been implemented for the Key Worker Mortgage, the main being the Homebuyer Mortgage with equity loans of up to £50,000 towards property purchase, and the Higher Homebuy with equity loans of up to £100,000 for some school teachers in London. The equity loans are only payable on the sale of the property, or if the key worker leaves their job within 2 years of taking out the loan. The amount repayable will depend on the growth in the value of the property. For example, if a key worker mortgage was for £25,000 on a valued property of £100,000 and the property doubled in value to £200,000, the amount owed would also double to £50,000 on sale. If however, the value of the property decreased, so would the amount payable on the key worker mortgage. Shared ownership schemes for new properties are also available.
Some banks and building societies are put off giving mortgages to key workers, as they prefer a deposit up front from their own savings. Some lenders may also demand 5% of the value of the property from their own savings, but many will accept key worker mortgages, as if the deposit were the borrower’s cash.
The Key Worker Mortgage is only available for the key worker’s main residence only, and can not be used as a buy to let property.
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