Mortgage With Furlough History: Does It Still Affect Lending?
A mortgage with furlough history is still a common concern for applicants, even after returning to full pay. Many people worry that time spent on furlough could continue to affect lending decisions long after employment has normalised.
In reality, furlough does not automatically prevent mortgage approval. What matters is how lenders assess income now, and whether furlough appears to have created ongoing risk.
This guide explains how lenders view furlough history, when it still matters, and what evidence helps reassure underwriters.
Does furlough history still matter to mortgage lenders?
In most cases, historic furlough alone is not a problem.
Lenders are primarily interested in:
- Your current employment status
- Your current income level
- Whether income is stable and sustainable
If you are back in full employment and paid at normal levels, many lenders treat furlough as a past event rather than a current risk.
However, furlough history can still prompt questions in certain situations.
When furlough history can still affect lending
Recent return to work
If you have only recently returned from furlough, some lenders may want reassurance that:
- Your role is secure
- Your income is not at risk of reduction again
- You are no longer reliant on government support
Time back at full pay can improve lender confidence.
Reduced hours or pay after furlough
Furlough history is more relevant if:
- You returned on reduced hours
- Your salary is lower than pre-furlough
- Income has not fully recovered
In these cases, lenders assess affordability based on current income, not historic levels.
Industry risk
Some sectors experienced longer or repeated disruption.
Where employment is in a sector that previously relied heavily on furlough, underwriters may look more closely at:
- Employer stability
- Employment contracts
- Evidence of ongoing demand
This is about risk assessment, not penalising furlough itself.
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How lenders assess income after furlough
Current payslips matter most
Lenders usually prioritise:
- The most recent one to three payslips
- Confirmation of full contractual pay
- Evidence that furlough payments have ended
If payslips show full pay with no reference to furlough, many lenders move on without further concern.
Employment contracts and status
Lenders want to see that you are:
- Permanently employed
- Not subject to temporary arrangements
- Not still reliant on reduced hours schemes
Permanent, full-time contracts carry the most weight.
Bank statements
Statements are reviewed to confirm:
- Income matches payslips
- No ongoing support payments
- Stable cash flow
This helps lenders confirm furlough is genuinely in the past.
Is furlough treated like variable income?
No.
Furlough is not treated in the same way as overtime, bonuses, or commission. It is considered a temporary income support measure rather than an income type.
Once furlough has ended and normal pay has resumed, lenders usually focus solely on current earnings.
What evidence helps if you have furlough history?
1. Payslips showing full pay
Most lenders want to see:
- At least one payslip at full pay
- Often two or three for wider acceptance
The longer you have been back on full pay, the easier the assessment becomes.
2. Employer confirmation
A letter from your employer can help if it confirms:
- You are no longer on furlough
- Your role is permanent
- Your hours and pay are stable
This can be particularly useful if your return was recent.
3. Updated contract or variation letter
If your role, hours, or salary changed after furlough, written confirmation helps underwriters assess income accurately.
4. Time and consistency
Time remains one of the strongest mitigants.
Many lenders are most comfortable after:
- Three months back on full pay
- Six months where there were reductions or sector risk
Does furlough affect all lenders the same way?
No.
Lender approaches differ depending on:
- How recently furlough ended
- Whether income is fully restored
- Employment sector
- Overall affordability strength
Some lenders are relaxed once full pay resumes, while others prefer a longer track record. Matching the application to the right criteria is often key.
What if your mortgage has already been declined due to furlough history?
A decline linked to furlough does not mean future approval is unlikely.
However, reapplying without:
- Additional payslips
- Evidence of stability
- Time back at full pay
often leads to repeat declines.
You can learn more about income checks in our guide on how lenders assess employment income.
Professional advice can help determine when your application is ready to proceed again.
Key takeaways
- Historic furlough alone rarely prevents mortgage approval
- Lenders focus on current income and employment stability
- Recent returns or reduced pay attract more scrutiny
- Payslips and employer confirmation are key
- Time back on full pay improves outcomes
This guide provides general information only. Personalised mortgage advice should always come from a regulated mortgage adviser.
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Important information: Mortgage Bridge provides information only and acts as a mortgage introducer. We do not provide mortgage advice or make lender recommendations. We can introduce you to an FCA-regulated mortgage adviser who can provide personalised mortgage advice.