Remortgage After Changing Jobs

How Does Changing Jobs Affect Remortgaging?

Most lenders are comfortable with applicants who have recently changed jobs. Employment mobility is a normal part of working life, and lenders understand this. The key factors they consider are:

Your new salary: If your salary has increased, this actually strengthens your application. You may be able to borrow more or access better deals than before the move.

Employment continuity: Lenders like to see a stable employment history. Moving from one permanent role to another, especially within the same industry, is viewed positively.

Probation periods: If you are still in your probationary period, some lenders are more cautious. However, many will lend regardless of probation status, particularly for straightforward remortgages.

Type of employment: Moving from permanent to permanent is the most straightforward. If you have moved to a contract role, self-employment or a commission-based position, the assessment may be more complex.

Gaps in employment: If there was a gap between leaving your old job and starting the new one, lenders may ask about this. Short gaps (a few weeks) are usually not an issue. Longer gaps may need explanation.

In many cases, a job change is a positive event from a lending perspective, particularly if it comes with a salary increase. Lenders assess your ability to repay, and a higher income improves that assessment.

What Documents Do Lenders Need?

When you have recently changed jobs, the documentation requirements are slightly different from a standard remortgage. Here is what to have ready.

Essential documents:

• Your new employment contract — showing your start date, salary, position, and any probation terms
• Payslips from your new employer — ideally three months, though some lenders accept one or two
• Bank statements — three to six months, showing salary deposits from both old and new employers
• P60 from your previous employer — confirming your last tax year earnings

Helpful supporting documents:

• Payslips from your previous employer — showing your earnings history
• A letter from your new employer confirming your position and salary
• Your offer letter — particularly useful if you have not yet started or are very early in the role

If you have not yet received payslips from your new employer, your offer letter and employment contract can often suffice with certain lenders. An adviser can tell you exactly which lenders will work with the documentation you currently have available.

Having everything organised before you begin the application demonstrates to the lender that you are a responsible borrower and helps the process move quickly.

Pay Rise and Improved Borrowing Power

If your job change came with a pay rise, you are in a stronger position than before. A higher salary increases your borrowing capacity, which opens up several opportunities.

Better loan-to-value options: With higher income, you may be able to make overpayments or choose a shorter term, both of which reduce your LTV over time and give access to better rates in the future.

Additional borrowing: If you need to release equity for home improvements, debt consolidation or other purposes, a higher salary improves your chances of being approved for additional funds.

Shorter mortgage term: A higher income could allow you to switch to a shorter term without significantly increasing your monthly payments. This saves a substantial amount of interest over the life of the mortgage.

Overpayment opportunities: Many mortgage products allow overpayments of up to 10% per year without penalty. If your new salary gives you more disposable income, regular overpayments can dramatically reduce the total cost of your mortgage.

It is worth noting that lenders assess the salary stated in your contract, not any potential bonuses or overtime, unless these are guaranteed. If your new package includes a significant variable component, the lender may only count a proportion of it.

A mortgage adviser can model different scenarios based on your new income, showing you how a pay rise translates into practical mortgage advantages.

Moving From Employed to Self-Employed

If your job change involves moving from employment to self-employment, the remortgage landscape changes significantly.

Most lenders want self-employed applicants to have at least one year of accounts, with many preferring two or three years. This means that if you have only recently become self-employed, your options for a full remortgage with a new lender may be limited initially.

However, there are some approaches that can help:

• Product transfer: Your existing lender may offer a rate switch without requiring a full income reassessment. This allows you to avoid the SVR while your self-employment history builds up.
• Day-one self-employment lenders: A small number of specialist lenders will consider newly self-employed applicants, particularly if you are working in the same industry as your previous employment. The rates may be higher than mainstream products.
• Contractor-friendly lenders: If your self-employment takes the form of contracting through a limited company or umbrella company, some lenders will assess your income based on your contract rate rather than requiring years of accounts.

If you are planning to become self-employed, it is worth considering remortgaging before you make the switch. While you are still employed, you have access to the full range of products and the most competitive rates. Once you are self-employed without a track record, your options narrow.

An adviser who specialises in self-employed mortgages can navigate these complexities and find the best available option for your stage of self-employment.

Commission, Bonus and Overtime Income

If your new job includes a significant portion of variable income — commission, bonuses or regular overtime — this adds another dimension to the remortgage assessment.

Lenders vary in how they treat variable income:

• Guaranteed bonuses: If your contract guarantees a minimum bonus, some lenders will include this in full alongside your base salary.
• Non-guaranteed bonuses: Most lenders will want to see a track record of bonus payments, typically over one to two years, before including them. If you have just started the job, bonus income from the new role may not be counted initially.
• Commission: Similar to bonuses, lenders usually want evidence of at least one year of commission earnings. They may average the commission over the period to calculate a sustainable figure.
• Overtime: Regular overtime may be included if it can be evidenced through payslips over several months. Occasional or unpredictable overtime is less likely to be accepted.

If your base salary alone is sufficient to meet the affordability requirements, the variable income becomes a bonus rather than a necessity. This is the strongest position to be in.

If you are relying on variable income to make the numbers work, you may need to wait until you have built up a track record in the new role. An adviser can calculate whether your base salary alone qualifies you, or whether you need to demonstrate a history of additional earnings.

Making Your Application as Strong as Possible

Here are practical steps to ensure your remortgage application after changing jobs goes as smoothly as possible.

Apply at the right time. If possible, wait until you have at least one to three payslips from your new employer. This gives lenders the income evidence they need and demonstrates that the role is established.

Keep your credit profile clean. Avoid taking on new credit cards, loans or finance agreements around the time of your application. Lenders check your credit file and recent applications for new credit can raise concerns.

Explain the job change positively. If the change represents career progression or a salary increase, make sure this is communicated to the lender. A move that clearly improves your financial position is a positive signal.

Prepare for questions about gaps. If there was any gap between jobs, have a straightforward explanation ready. A brief holiday between roles, a notice period that did not overlap, or time for relocation are all easily understood reasons.

Use a mortgage adviser. An adviser can match your specific employment circumstances with lenders who will assess your application most favourably. This saves time and avoids unnecessary declines that could affect your credit file.

Consider the full picture. Your job change is just one element of your financial profile. A strong credit history, good equity position and responsible spending habits all contribute to a successful application.

Changing jobs and remortgaging at the same time is extremely common. With the right preparation and professional guidance, it should not cause you any significant problems.