Getting A Mortgage On Benefits

Getting a Mortgage on benefits may seem impossible but it can be done! We answer all your questions in our feature length guide.

You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with GDPR May 2018 requirements. You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone. By submitting this information you have given your agreement to receive verbal contact from us to discuss your mortgage requirements

Is Getting A Mortgage On Benefits Possible?

Getting a mortgage on benefits is possible, it will largely depend on the lender whether they accept benefits. Some lenders definitely accept 100% of benefits, whereas some may only accept half of them, or even none of them.

However, if you are on benefits and would like to get a mortgage you should work on the assumption that someone may take all of them. Speak to a specialist mortgage advisor to see exactly how much you can borrow.

Shared Ownership Mortgage Bad Credit

Is Getting A Mortgage On Benefits With Bad Credit likely?

Whilst bad credit reduces your options for lenders, getting a mortgage on benefits with bad credit may still be possible as some lenders view bad credit differently.

If you have bad credit you should follow a few simple steps in order to find out your options:

  • Get a credit report – We recommend checkmyfile, but use whichever works best for you.
  • Speak to a specialist – A mortgage broker will be able to give you an idea of which lenders are best for your situation.
  • Get a mortgage in principle – These usually involve a credit check, so should give you confidence in your ability to get a mortgage with the recommended lender.

Getting a mortgage on benefits with bad credit may seem impossible, but you may have options.

Do You Get Mortgages For People On Benefits?

Whilst there are generally not specific mortgages for people on benefits you will get lenders or even products that are more preferable for people on benefits.

Benefits range from things such as Child Benefit, to Universal credit and Disability Living Allowance (DLA) and generally some lenders will consider all of them, even things such as jobseekers allowance.

Can Universal Credit Be Used For Mortgage?

With the recent changes to the Universal Credit system there are many different benefits rolled into this one header. Getting a Universal Credit Mortgage is definitely possible, and some lenders may even take 100% of it as income. If you are using our affordability calculator you can enter your benefit income as part of your income for affordability.

As some lenders use all of your benefit income this should give you an estimation of how much you can borrow.

However, if you need an accurate idea of how much you can borrow we recommend speaking to a specialist mortgage broker.

Can You Get A Mortgage With PIP?

Personal independence payments can also be used toward mortgage affordability. Some lenders will allow you to use 100% of your Personal independence payments (PIP) toward your affordability.

As many on Personal independence payments may not be able to work, it makes sense that you should be able to use it as income toward your mortgage.

Can I Use Housing Benefit To Buy A House

Housing benefit can be used to buy a house as long as you can show that the income will continue upon completion of the mortgage.

Generally Housing benefit is meant to help people that are renting, so you will need to be able to show that you will still receive Housing benefit once you move in. This is common for people buying on the shared ownership scheme as they still have a rental element upon completion and may still receive housing benefit.

How Can I Buy A House On Benefits?

Buying a house on benefits should be quite simple and straightforward.

  • Speak to a mortgage advisor to find out how much you can borrow
  • Get a mortgage in principle from a lender
  • Make an offer on a property
  • Submit a full mortgage application.

The only difference will generally be that getting a mortgage on benefits limits which lenders you are able to use. Many will not take benefits, and many more will not take 100% of your benefits income. However, some will consider taking all of it, as long as it is sustainable.

Can I Get A DLA Mortgage?

Disability Living Allowance or DLA has recently changed to PIP or personal independence payments. However, many still refer to them as DLA. You can generally get a DLA mortgage as long as the benefits are sustainable.

Many lenders will accept 100% of disability living allowance or personal independence payments. For many disability living allowance or Personal independence payments are a long term benefit as they are unable to work. This means that they are relatively secure for a lender.

Can I Get Shared Ownership On Universal Credit

Many people that apply for the shared ownership scheme may be receiving benefits of some kind. This is quite common and many lenders will allow you to use Universal credit toward affordability on a shared ownership mortgage.

If you are considering getting shared ownership on universal credit you can expect to go through several stages:

  • Speak to a specialist mortgage advisor to check your affordability
  • Get a mortgage in principle
  • Find a property and have your financial assessment by the housing association
  • Submit a full mortgage application.

How Do Benefits Affect A Mortgage Application?



Benefits may increase the amount you can borrow compared to just using income

Many lenders won’t accept benefits.

If you have a low income, but are receiving benefits this can boost how much

Some underwriters may view it negatively if you are dependent on benefits

Benefits can be used with Schemes such as First homes, deposit unlock and Shared ownership

Lenders that do accept benefits may not count 100% of them towards affordability

You may be able to use childrens benefit toward your affordability.

Lenders may scrutinise your case further if you are on benefits.

What Benefits Can Be Used For A Mortgage?

Different lenders may accept different benefits. Some may accept 

  • Attendance Allowance
  • Carers Allowance
  • Child Benefit
  • Child Tax Credit
  • Disability Living Allowance (DLA)
  • Housing Benefit
  • Incapacity Benefit (IB)
  • Industrial Injuries Benefit (IIB)
  • Maternity Pay
  • Pension Credits
  • Personal Independence Payment
  • Severe Disablement Allowance
  • Universal Credit
  • Widow’s Pensions
  • Working Tax Credit

However, whilst this list shows many of the benefits that can be accepted, they may not be accepted by all lenders. You should speak to your bank, building society or mortgage advisor to find out which benefits you can use.

Which Mortgage Lenders Accept Benefits?

Many lenders accept some benefits, some accept more than others. For example, child benefit is widely accepted by most lenders as long as the children are younger. However, Housing benefit is rarely accepted by lenders as it is usually to help pay rent and may not be received upon completion of a mortgage.

The other thing to consider is how much of a benefit is accepted by certain lenders. They may accept a benefit, but only allow you to use 50% of it toward your affordability. However another lender might take 100% of the same benefit.

How Much Can I Borrow On Benefits?

This will depend on various factors. To get a rough idea you can add up all your annual benefit income, with other forms of income in your household and use our mortgage calculator at the top of the page.

This will give you a ballpark amount you may be able to get, but we highly recommend speaking to a specialist mortgage advisor to get a more accurate figure.

How Can I Get A Mortgage On Benefits?

There are several ways of getting a mortgage on benefits. You should consider the pros and cons of them all which we will cover here.

  • Walk in to your bank or building society and ask to speak to a mortgage advisor
  • Speak to a specialist mortgage broker

Your bank or building society may not accept benefits, or if they do, they may not accept 100% of benefits.

A specialist mortgage broker will have access to dozens of lenders and probably thousands of products. This should mean that they can find the best lender for your situation.

Can I Get A Buy To Let Mortgage On Benefits?

Many Buy to let lenders will accept benefits as income. Generally buy to let mortgages are calculated based on the rent that the property can achieve. Your income is factored in to ensure you can afford to cover the mortgage in the event there is no tenant in the property.

This therefore means that many lenders don’t mind if you are on benefits when getting a buy to let mortgage, as the rent will cover the mortgage itself.

Can I Get A Mortgage On Jobseeker’s Allowance?

Whilst many think you can’t get a mortgage whilst on jobseekers allowance (JSA), some lenders do accept jobseekers allowance as income. However, you may find that if you have been on jobseekers allowance long term that you struggle with lenders.

There is also another benefit called Support for mortgage interest that will help homeowners if they find themselves without full time employment.

Can I Use Child Benefit For A Mortgage?

Child benefit is widely accepted by lenders while the children are younger. As your entitlement to this is unlikely to change over the short term. Also Child benefit is usually quite a small amount in the grand scheme of your mortgage, however it can make the difference if you need to borrow just a little bit more for that house you want.

Is There A Mortgage Calculator On Benefits?

Our mortgage calculator can give you an idea of how much you may be able to borrow whilst on benefits. You just need to add your income together with your benefits and then enter that as your income figure for our calculator.

Our mortgage calculator doesn’t require any personal details so you can use it without us calling you as well.

Is There A Universal Credit Mortgage?

Universal credit is a complicated benefit, as it covers many areas. As such many lenders do not accept Universal credit for a mortgage.

However, some lenders will take universal credit as it comes, and some will want to see a statement to see what the different aspects comprise the universal credit.

If you are on Universal credit and want to use it toward a mortgage we highly recommend speaking to a professional that can tell you which parts can be used for a mortgage.

What Documents Will I need While Getting A Mortgage On Benefits?

The documents required for a mortgage whilst on benefits are likely to be similar to any other mortgage, however, you may also need a statement for some benefits such as Universal credit.

The other documents you may need are:

  • Bank statements
  • Proof of deposit
  • Payslips or Self employed tax returns
  • Proof of ID
  • Proof of address

How Much Deposit Do I Need While Getting A Mortgage On Benefits?

With deposit more is always better. However, you may be able to get a mortgage on benefits with as little as 5% deposit, or if you are looking at shared ownership, it’s possible with even less deposit than that.

It is also worth noting that in general you can expect a lower rate of interest if you have a larger deposit. So it is worth saving a little bit more if you can.

You can also use a gifted deposit whilst getting a mortgage on benefits, for this you will usually need a signed gifted deposit form and proof of funds from the person giving you the deposit.

My Only Income is From Universal Credit

Whilst most lenders want to see an income of some sort in order to use benefits to get a mortgage, you may still be able to get a mortgage with just Universal credit income. This can be incredibly difficult though, and we highly recommend speaking to a mortgage broker if you want to do so.

Can I Use Maintenance Payments While Getting A Mortgage On Benefits?

You may be able to use Maintenance payments as well as benefits while getting a mortgage on benefits. This can add to your affordability and increase the amount you can borrow considerably.

Generally lenders will either require 3 months bank statements showing the maintenance payments, or a letter from the courts showing that it is court ordered, or possibly both.

Got A Question About Getting A Mortgage On Benefits That We Haven’t Answered? Get In Touch!

A mortgage article by Mark Robinson – Mortgage & Equity Release Broker