Airline Pilot Mortgage Advice
Airline Pilot Mortgages
As an airline pilot it can be frustrating that many mortgage lenders are not geared up for airline pilot mortgage lending. This is because many lenders prefer salaried employees who earn the same every month over those who have variable income.
Airline pilots are one of the few professions where non-basic income (other than annual bonus) can make up a large proportion of your earnings. Using the right lender can therefore dramatically change what you can borrow as a commercial pilot.
Last updated: 30th October 2023
Why are some lenders better for airline pilot mortgages than others?
Some lenders will lend a lot more to airline pilots as they are far more open to considering variable income (any income that isn’t a basic annual salary).
The rules vary from lender to lender in two ways. First is the proportion of your variable income they will consider. Some lenders will add up all your flight pay, overtime, sector pay, and any other variable amounts you get and multiply it by 60%. This means every pound of variable income earned is worth just 60 pence compared to somebody earning it as a salary.
The second factor is the time period over which they assess variable income. Some lenders look at only the last three months. Some look at only the last three months but require it to be supported by a year-to-date figure to match. Some will look at a sample of three months and then take only the lowest amount. And some will look at six months to a year.
This means that the lender who might lend the most money could change, depending on the time of year you are applying for your pilot mortgage. Sometimes it may be best to use a lender looking at only the last three months, and at other times, it could be beneficial to look at one who takes the past year.
How much money can airline pilots borrow for a mortgage?
Like most people, you can borrow up to between 4.5 and 5.5 times your basic pilot’s salary. You may then be able to borrow tens of thousands of pounds more based on your variable pay.
You might be able to borrow 5 to 5.5 times your total gross earnings. Ultimately, it depends on your specific circumstances. A mortgage broker with experience in your circumstances is best placed to confirm your exact borrowing potential.
Remember that your expenses will be taken into account as well. Some lenders want to know your specific spending, though some will just use ONS figures.
Financial commitments such as large credit card debt, car finance, personal loans, and student loans will then eat into how much you can borrow. Having a dependent partner and/or children can also factor into the maximum loan amount.
Even if you have some debt, if it is well within your ability to pay, it may not affect how much you can borrow at all.
Loans you have to repay for any flight training will certainly be considered. Depending on your exact circumstances, it may be beneficial use a mortgage to repay these loans. If moving home, using some of the funds from your sale to repay loans might mean you can borrow more for your new home, as long as you still have enough for a deposit.
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Can variable income be used to get a pilot mortgage?
Absolutely. Different mortgage lenders treat it differently. This is why one lender may offer to lend over £100,000 more than another.
Overtime, flight pay, sector pay, and bonuses can all be used to increase your borrowing amount. Note, however, that expenses covered by the company, even if they appear on your payslip, cannot be included as income.
Does a pension contribution affect how much you can borrow?
With some lenders it does, and with others it does not. This is because they know it is discretionary, and you may choose to reduce your contribution later. This is yet another reason why approaching the right lender the first time is important.
How long do you need to have been a pilot to get a mortgage?
Some lenders will offer airline pilots mortgages before the position even starts. Read more about new job mortgages here. The downside of this, though, is that your variable income will not be taken into account as you have no history of it yet.
Your variable pay can be considered aster when you have at least three months of payslips. You’ll have more options after six months and even more after a year’s service.
What if you’ve just changed airline?
If you have just changed airline or are starting at a new airline in the next three months, then your new basic salary can be used right away. Unfortunately, your variable pay will not be usable until you have at least three months’ evidence of it. This is because the lender wants to ensure that the variable pay at the new company is in line with the previous.
What if you’ve just been promoted?
If you’ve just been promoted, then your increased basic salary can be used immediately, even if you haven’t yet started earning your new higher wage. A £10,000 increase in basic pay could allow an extra £45,000 to £55,000 of mortgage lending.
Your historic variable pay will also still be usable. This, however, will be at the rate of your former rank until you can provide evidence of a higher variable rate in your new role.
Are interest rates higher for mortgages for pilots?
No, not really. They are in line with interest rates on the high street. You may not be able to get the very lowest rate on the market if that specific lender doesn’t have favourable variable income criteria, but it won’t be far off.
A larger factor influencing the interest rate that you get will be the size of deposit that you can put down.
What deposit is needed for an airline pilot mortgage?
Airline pilot mortgages start from just a 5% deposit.
A larger deposit can decrease the interest rate you’ll pay, and you are more likely to be accepted with a larger deposit than a smaller one. Even with just a 5% deposit, though, so long as you have a good credit history, it’s still fairly likely you’ll qualify with a lender.
What documents will you need to get a pilot mortgage?
As a minimum you’ll need to provide:
- 3 months’ bank statements
- 3–12 payslips and a P60 depending on how long you’ve been at your current airline
- Your employment contract if you have only recently started (or are yet to start) at your new position
- A copy of your credit file
- Information on your credit file.
I like to conduct a full appointment with you to review a list of documents I require. This is to save you time, ensuring that I am asking you only for documents that are needed.
I will also do a full review of all your documents before even getting an agreement in principle. This means that I have seen everything the bank might need to see before they ask to see it, and it enables you to go house hunting with confidence. In my opinion, any agreement in principle done without seeing all potentially required documents to support an application is not worth the paper it’s written on. This is why I have an industry-leading application success rate and so many positive reviews on Google.
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Can a first-time buyers get an airline pilot mortgage?
Absolutely. Everything on this page applies to first-time buyers, home movers, and pilots who are remortgaging.
If you are looking at buy-to-let mortgages, then remember that the amount you can borrow is based on the expected or evidenced rental income of the property, not your earned income.
Remortgaging for airline pilots
Remortgaging can unlock lower-cost mortgages, especially if you now qualify with more lenders as you have more experience than when you first bought your house. Perhaps you had very few options at the time due to a new job or limited history of variable pay.
Other than simply getting a lower-cost mortgage, you might want to remortgage to fund home improvements or clear other debts, such as loans for flight training. Most lenders limit you to 85% loan-to-value ratio when using a mortgage to consolidate other debts. Some will allow 90%.
Think carefully before securing other debts against your home. Consolidating debt may reduce your outgoings now, but you may end up paying more overall. Your home may be repossessed if you do not keep up repayments on your mortgage
Mortgage broker for airline pilots
Some mortgage brokers are more experienced in getting favourable mortgages for airline pilots. I enjoy working with commercial pilots, and I have discovered that some of the lenders I have the best relationships with excel in this area. Hence, I’ve now chosen this as one of my specialities.
I typically charge £390 for non-standard cases; these are cases where more than just basic income is being used in the mortgage application. You can read more about my fees here.
Your home may be repossessed if you do not keep up repayments on your mortgage
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