HSBC announces mortgage changes to help applicants on zero hours contracts

September 5, 2019 3:08:55 PM

Workers with flexible working patterns such as those on zero hours contracts could find it easier to access a new mortgage deal following changes announced by a major lender.

HSBC said it is relaxing conditions for some of the documents it will require from borrowers.

At the same time, it will make some other changes to make calculations about applicants’ earnings more accurate.

The lender is cutting the amount of continuous employment it requires with the same employer from two years to one year and replacing the requirement to produce two years’ P60 statements with the latest P60.

It said that to have greater visibility of current earnings and produce a more accurate affordability assessment, it will require borrowers to provide their last three payslips instead of one.

The bank said its review of the documentation required to support mortgage and remortgage applications had included feedback from mortgage brokers and customers.

The bank is also cutting rates on some of its mortgage products by up to 0.35 percentage points.

Aaron Shinwell, head of mortgages and savings at HSBC UK, said the bank had taken on board feedback that certain requirements and documentation were hindering zero hours contractors’ chances of getting on to the property ladder, or remortgaging with it.

He said: “A lot has been said about zero hours contracts over the last few years, much of it giving the impression they are inherently bad.

“The reality is that a significant number of people – approaching two million contractors working an average of 25 hours a week – are on zero hours contracts, and rely on them for their income.

“The flexibility suits their lives and their lifestyle, and their needs shouldn’t be ignored.”

Rachel Springall, a finance expert at, said: “It’s fantastic to see such a prominent brand in the mortgage market supporting consumers on zero hour contracts.

“More innovation of this kind is essential for borrowers who struggle to fit the norm when it comes to affordability tests.

“People are likely to be working more flexibly now than in the past, so not meeting traditional affordability criteria could rip away the dream of home ownership even if they can prove they could afford to pay their mortgage.

“Responsible lending is very important, so it is good to see that HSBC are making changes to consider the last three payslips instead of just one and understand that workers will not always stay with the same employer for over a year in their career.”