Mortgage After Redundancy: How to Secure a Home Loan After Losing Your Job
Facing redundancy can be stressful — especially if you’re in the middle of buying a home or thinking about applying for a mortgage. It’s natural to wonder whether losing your job means your homeownership plans have to stop altogether.
The good news? It doesn’t have to. Getting a mortgage after redundancy is absolutely possible — you just need to understand how lenders assess your situation and what steps you can take to strengthen your application.
This guide explains exactly how to move forward, whether you’ve recently been made redundant or you’re planning a fresh start.
Can You Get a Mortgage After Redundancy?
Quick answer:
Yes — you can still get a mortgage after redundancy, but it depends on your current income, savings, and overall financial stability.
Lenders base their decisions on affordability, not just employment status. If you can show that you have a stable income (even from a new job, self-employment, or other sources), many lenders will still consider your application.
If you’ve recently been made redundant, timing and preparation are key. Taking a few months to get settled in your new role or to organise your finances can make all the difference.
How Do Lenders View Redundancy?
Lenders understand that redundancy is a normal part of modern working life — it doesn’t automatically mean your mortgage hopes are over. However, they will want reassurance that your income is secure going forward.
They’ll look closely at:
- Your current employment situation — are you back in work or starting soon?
- Your savings and redundancy payout — do you have funds to cover a deposit or repayments?
- Your credit record — have you managed bills and debts responsibly through the transition?
- Your overall affordability — can you comfortably manage future repayments?
If you can demonstrate stability — even if your income source has changed — your chances of getting a mortgage after redundancy improve significantly.
What If I’ve Just Been Made Redundant?
If you’ve only recently lost your job and haven’t started a new one yet, lenders are likely to pause your application.
Mortgage providers need evidence of ongoing income, so until that’s confirmed, it’s difficult for them to assess affordability.
Here’s what you can do in the meantime:
- Avoid new credit applications until you’re back in work.
- Use your redundancy payout wisely — avoid large, unnecessary spending.
- Update your CV and secure new employment as soon as possible.
- Keep your credit file clean by continuing to pay bills and debts on time.
Once you have a new job offer or consistent self-employed income, lenders can reassess your application.
Can I Use My Redundancy Payout as a Deposit?
Yes — redundancy money can absolutely be used as part of your deposit.
Lenders will want to see:
- Proof of the payout (such as a letter from your employer or bank statement).
- Confirmation that the funds are yours to keep, not repayable.
Using redundancy pay as a deposit can actually make your application stronger, as it reduces the amount you need to borrow and shows financial responsibility.
Just make sure your payout is clearly documented, as lenders will verify the source of all deposit funds as part of anti-money laundering checks.
Can You Get a Mortgage If You’ve Started a New Job After Redundancy?
Yes — in fact, this is one of the most common scenarios we help with.
If you’ve secured a new job after redundancy, many lenders will consider your mortgage application even if you haven’t started yet.
Some lenders are comfortable with:
- A signed job offer letter or employment contract as proof of future income.
- Probationary periods, provided your role is permanent and your income is stable.
- Same-industry transitions, where your new job closely matches your previous experience.
Others may prefer you to have one to three months of payslips before approving your mortgage. Either way, we can match you to the lenders most open to your circumstances.
What If I’m Self-Employed After Redundancy?
If redundancy led you to become self-employed or start a business, you’ll need to show that your new venture is financially viable.
Most lenders ask for:
- At least one full year of trading accounts, and
- Tax calculations (SA302s) and tax year overviews from HMRC.
Some specialist lenders may accept less than a year’s evidence if your income is strong and your previous employment background supports your new venture.
At Mortgage Bridge, we regularly help clients secure a self-employed mortgage after redundancy, even with limited trading history.
How to Strengthen Your Mortgage Application After Redundancy
Here are some proven ways to improve your chances of getting approved:
- Wait until your new income is stable. Lenders prefer at least 3 months of employment or trading records.
- Keep your credit clean. Avoid missed payments, overdrafts, or high credit card balances.
- Save a larger deposit. The more you can put down, the less risk the lender takes.
- Use redundancy pay strategically. Part for your deposit, part as a financial cushion.
- Prepare strong documentation. Include your new employment contract or accountant’s records.
- Work with a specialist broker. We know which lenders are flexible about redundancy history.
Even small improvements can make a big difference when it comes to securing your mortgage after redundancy.
What If I Already Have a Mortgage and Get Made Redundant?
If you already have a mortgage, don’t panic. Redundancy doesn’t mean you’ll lose your home — but communication with your lender is crucial.
Here’s what to do:
- Tell your lender early. They may be able to offer temporary payment holidays or reduced payments.
- Check if you have redundancy cover. Some mortgage protection policies cover repayments after job loss.
- Re-budget quickly. Use your redundancy pay to keep up with essential bills while you find new work.
Lenders are far more understanding if you contact them proactively rather than missing payments unexpectedly.
Can Bad Credit Affect Getting a Mortgage After Redundancy?
Bad credit can make things more challenging, but not impossible.
Lenders will want to see that your credit issues are behind you and that your current finances are stable. If you’ve had missed payments, defaults, or a drop in score during your redundancy period, we can help rebuild your case before applying.
We discuss this in more detail in our guide on 10 proven tips to boost your credit score before applying for a mortgage.
Final Thoughts
Being made redundant doesn’t mean the end of your homeownership plans — it’s just a pause, not a stop.
With the right preparation, a clear plan, and support from a specialist broker, you can absolutely secure a mortgage after redundancy.
At Mortgage Bridge, we work with lenders who understand that life doesn’t always go to plan. Whether you’re starting a new job, going self-employed, or rebuilding your finances, we’ll guide you through every step of the process with confidence and care.
If you’d like to explore your mortgage options after redundancy, we’re here to help.