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Can you get a mortgage on maternity leave?

Can you get a mortgage on maternity leave?

By Polly Gilbert
Published 7 November 2022

Do you have to declare pregnancy on a mortgage application? How to boost mortgage affordability when buying a house

In this guide

Buying a home can be one of the most exciting yet stressful life events a person can experience. If you’re pregnant or buying a house while on maternity leave, it’s easy to feel even more overwhelmed.

If you’re pregnant or on maternity leave, you may be wondering how this will affect your ability to buy a home. Does being pregnant make it harder to get a mortgage? And do you have to declare pregnancy on a mortgage application? 

Read on to find out how to get a mortgage on maternity leave and increase your borrowing potential. 

Can you get a mortgage on maternity leave?

Yes! It’s absolutely possible to get a mortgage on maternity leave, but it can be more complicated than if you were working full-time. 

Some lenders will reject applications from people on maternity leave, but most will simply want proof that you’ll return to work on a full salary, and when that will happen. Some lenders will base the loan amount on the amount you’ll earn on leave, rather than your usual salary, but this is rare. 

To increase your chances of getting approved and getting a good deal, it’s wise to talk to a mortgage broker. They’ll know the industry inside out and will help you identify the flexible lenders who are most likely to have favourable criteria for maternity leave. 

Does being pregnant make it harder to get a mortgage?

Even if you’re not on maternity leave yet, being pregnant can make it harder to get a mortgage

This is because rather than focusing on what your income is now, lenders will sometimes assess your affordability based on what your income will be while you’re spending more time with your baby. This could limit your borrowing potential.

Many lenders will still consider your full salary, but they can be difficult to track down. This is because only a selection of mortgages are listed on comparison websites. 

Some lenders reserve the best deals for those who apply through a mortgage broker, showing just how important it is to get professional mortgage advice

Will it be easier if I’m applying with my partner or spouse?

If you’re applying for a joint mortgage with your partner or spouse and they plan to keep working when the baby is born, this can make things easier. 

Lenders may agree to lend based on their income alone. However, if your partner earns a modest salary and you’re hoping to buy a big house in an expensive area, you might not be able to borrow enough.

If you still can’t afford a mortgage on maternity leave, here are a couple of ways to boost your borrowing potential…

How to boost your borrowing power

An Income Boost mortgage aka a Joint Borrower Sole Proprietor mortgage could help you buy a home when you’re pregnant or on maternity leave.

Basically, this involves adding a friend or family member to the mortgage to boost your borrowing potential. The lender will take their income into account when carrying out their affordability assessments. They may even increase the amount you can borrow. 

The person you add to the mortgage won’t have ownership over the property, but if you have difficulties making your payments, they’ll need to help.

As long as you meet all the criteria, you can do this even if you’re buying the property with your partner or spouse. You and your partner would be joint owners, while your ‘booster’ is simply added to the mortgage. 

Another option is to use our Deposit Boost service. This involves taking out two separate mortgages. 

  1. The first mortgage is taken out by a friend or family member who owns their home. By remortgaging their property, they can free up equity that can be used for your deposit.
  2. The second mortgage is used to buy your home. You’ll also use the gifted deposit along with any other savings you have. 

Can lenders ask if I’m pregnant?

Lenders are not allowed to ask if you’re pregnant or on maternity leave when you apply for a mortgage, as this would be discriminatory under the Equality Act 2010. 

However, lenders are expected to take into account future changes in your incomings and outgoings. And of course, having a baby can impact every aspect of your finances.

So while a lender can’t ask if you’re pregnant, they may ask if you’re aware of any changes to your income or expenditure in the future. 

If you tell them that you’re pregnant, the underwriter will usually assess your finances as if you already have a child, to ensure the mortgage won’t become unaffordable once your baby has been born. This means they will add a dependent to your mortgage. 

They might enquire about the following:

  • How long your maternity leave will be
  • Whether you plan to return to work full-time
  • Whether your salary will be the same when you return to work
  • How much you expect to spend on childcare

They might also ask your employer to provide them with a ‘letter of intent’ confirming the things you’ve told them. These questions might feel intrusive, but it’s all part of lenders’ affordability checks. 

Do I have to tell the mortgage lender I’m pregnant?

Legally, you must declare any significant changes that could impact your ability to repay the loan in future. Most people would agree that pregnancy or maternity leave would fall under this category. 

Lenders will expect you to sign a declaration to say you’ve completed your application truthfully. 

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You should always disclose anything to your mortgage advisor or lender that is going to impact your financial situation in the future.

Having a baby is a huge life event, and will change your life as well as your financials! For that reason, always be upfront. Over 600,000 babies are born each year - so lenders are very used to applications with maternity cover. It’s nothing you need to try to conceal. 

What happens if my lender finds out I didn’t disclose my pregnancy?

In some cases, not being truthful in a mortgage application could give your lender grounds to withdraw their offer. This may cause unnecessary stress during the home buying process. The last thing you need is to be scrambling to find a new lender when you’ve already got a new baby to care for! 

That said, it would be very uncommon for this to happen due to, say, an early undisclosed pregnancy. It would be hard for your lender to prove that you knew you were pregnant at the time of your application. It might not be so plausible if you’re eight months in!

Does maternity leave impact my remortgage?

Remortgaging on maternity leave is not that different to making a new mortgage application. 

Some people choose a product transfer with their existing lender, rather than trying to switch to a completely new deal. Product transfers rarely require affordability checks, providing you’re not extending the term of your mortgage or trying to release equity. 

While this can be a relatively easy option, it’s not always the most cost-effective and could see you missing out on better deals and more suitable terms with other lenders.

By comparing mortgages from lots of different providers rather than sticking with your current one, you could save thousands over the course of your mortgage term.

Before remortgaging on maternity leave, it’s a good idea to speak to a specialist mortgage broker. They’ll find a lender who’ll take your working salary into account, rather than one who’ll restrict the amount you can borrow.

Which lenders will accept my full salary?

Most UK lenders will accept mortgage applications from people on maternity leave, but they may have other criteria that need to be met. 

The majority of lenders will accept your full return to work salary rather than maternity pay. But they will usually want a return to work date and letter, but other than that, it’s usually quite simple! 

That’s because a 12-month dip isn’t reflective of the whole term of your mortgage, which might be paid back over a 30-year period. 

  • For example, Natwest will take your full-time salary into account when assessing affordability but they’ll ask for confirmation that you’re planning to return to work full-time.
  • Generation Home will accept 100% of your return-to-work income, where you can prove you’ll be returning to work in 12-months of the application being submitted. You’ll also need to show how you are going to cover the reduction in income. 
  • Precise Mortgages will ask your employer to verify in writing how much you’ll earn when you return to work after maternity leave. 
  • Santander will check how affordable your mortgage will be when you’re on maternity leave. They’ll also factor in predicted childcare costs before deciding whether to lend. 
  • Metro will accept the return-to-work salary, providing there’s income/savings to cover any reduction in income. The employer’s letter needs to confirm the return to work date, income, hours and that there’s no change in the terms of employment. 
  • Nationwide will ask for the latest payslip which shows you’re on maternity leave, e.g. Statutory Maternity pay information, and the payslip prior to you going on leave, which shows your full salary.

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Can you get a mortgage on maternity leave if you’re self-employed?

It’s possible to get a mortgage if you’re pregnant or on maternity leave and self-employed, but you may have to jump through a few extra hoops than if you worked for someone else.

The lender will want to know how your business and income will be impacted when you have a baby. If you have employees who’ll keep everything ticking over for you, the impact on your income may be minimal. But if you’re a sole trader or you run a limited company by yourself, this might make it harder for you to keep up with repayments on your mortgage. 

Santander says that when assessing affordability for self-employed applicants, they look at the last two years’ trading accounts and take an average income across those two years. Their current maximum LTV for self-employed applicants is 75%, meaning you’ll need to put down a 25% deposit or higher.

If you’re pregnant or buying a house while on maternity leave, work out whether you’ll be able to afford the mortgage once your baby’s arrived. 

While lender criteria can seem unfair, ultimately it’s designed to stop people taking on more debt than they can afford. 

If you have savings set aside to cover your expenses during maternity leave, it’s a good idea to mention this to your lender. It’s also wise to tell them if you plan to reduce childcare costs by having family members look after the baby while you work. 

Words by Jenni Hill