Head of Content
Mortgage Advisor & Director
Almost 23 million people in the UK are claiming some form of benefits, but is it possible to get approved for a mortgage while in receipt of them?
Here, you will learn whether it’s feasible to get a mortgage on benefits, declare them as income on your application, how much you can borrow and more.
Can you get a mortgage on benefits?
Yes. While it can be difficult to get a mortgage while claiming benefits, it is possible under the right circumstances. Those who are employed and receiving benefits will likely find they have more options than aspiring borrowers who are unemployed and getting support.
It may be possible to get a mortgage on benefits if you:
- Only need a relatively small mortgage or remortgage
- Have a large deposit
- Have other income as well as your benefits (ideally from a stable job)
- Are applying for a joint mortgage with someone with adequate income
You are likely to face challenges if you are applying for a mortgage with benefits, so it’s a good idea to speak to a broker to explore your options before you get started.
Can you declare benefit income on your application?
Yes. But not all lenders will allow you to use benefit income to qualify for a mortgage, and some of those that do will only let you declare a capped percentage of it.
The good news, however, is that there are also lenders who would be happy for you to declare 100% of your benefit income on your mortgage application, either on top of a main salary, in conjunction with other income types, or as your sole source of earnings.
The following types of benefits can potentially be declared as income for a mortgage:
- Universal credit
- Disability benefits
- Child benefits
- Personal tax credits
- Pension credits
- Carers allowance
- Disability living allowance
- And more
If you are planning to declare any of the above, it is crucial you find the right mortgage lender to increase your chances of being able to declare 100% of your benefits.
How to prove benefit income to your lender
The type of proof you will need to provide to evidence your benefits to a mortgage lender will depend on the type of benefits, but the process will always involve submitting bank statements so the lender can see the benefits arriving in your account on a regular basis.
Three months’ worth is a standard requirement, though depending on the benefit type, additional proof may be needed. For any state benefits, it’s not uncommon for lenders to ask for a full schedule of payment or reward letter from the relevant authority.
For child maintenance, a copy of a court order may be requested along with the bank statements showing the income arriving in your account.
How our brokers can make your income go further
There are mortgage brokers on our team who specialise in helping people on benefits get on the property ladder. They can help your income go further in a number of ways:
- Introducing you to a lender who accepts 100% of your benefit income
- Finding a specialist lender who accepts borrowers with non-standard income
- Helping you borrow based on higher income multiples
- Boost your chances of securing a lower rate and lower repayments
If you are using benefits as a supplemental or a main source of income to qualify for a mortgage, it’s a good idea to speak to a broker to increase your chances of a successful outcome. You can connect with an adviser who specialises in this area below:
Get bespoke advice about your mortgage options
How much you can borrow with benefit income
Although some mortgage lenders will only accept a capped percentage of your benefit income, others might be willing to offer you a mortgage based on 100% of your total income, including any benefits and other supplemental sources you may have.
To calculate your maximum borrowing, these lenders will multiply your total earnings by 4.5, although a small minority might use a higher salary multiple than this.
Enter your total income, including any benefits you are planning to declare, into our calculator below to get a rough idea of your maximum mortgage borrowing.
Which mortgage lenders accept benefit income?
The following lenders will let you declare benefits as income on your mortgage application:
- HSBC: Will allow mortgage applicants to declare child benefit, child tax credit, working tax credit, child support agency awards and universal credit.
- Kent Reliance: Allow borrowers to include various types of benefit income for their affordability assessment, but will subject them to extra underwriter checks.
- Halifax: Will accept benefits such as universal credit but only to mortgage applicants who have an earned income on top of this benefit.
- Aldermore: Allow borrowers to declare benefits including universal credit, provided they have bank statements and a reward letter as proof of income.
The above is merely a snapshot of the available lenders for mortgage applicants who are in receipt of benefits - speak to a broker for a full rundown of your options.
Why choose Teito for your mortgage needs?
There are mortgage advisers on our team who specialise in helping borrowers secure home finance while in receipt of benefits. With their help, you may find a range of different options, including specialist lenders and mortgage providers who accept 100% benefit income.
Here are just some of the reasons people choose us for their mortgage needs:
- Our brokers specialise in mortgages for people on benefits
- We can secure exclusive rates and deals
- We are 5-star rated on leading review websites
- It takes minutes to secure an agreement in principle with our help
Ready to take advantage of a free, no-obligation chat with a broker who specialises in arranging mortgages for people on benefits? Get started here.
FAQs
There are no specific government mortgage schemes for people on benefits, but being on benefits does not exclude you from some of the schemes that could help. They include:
Click the links above for more information about each scheme or speak to a broker for complete rundown of all of the schemes you could consider.
Furthermore, there is the HOLD scheme for borrowers with long-term disabilities - see the FAQ below for more information about this initiative.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.