Getting a Mortgage on Maternity Leave
Welcoming a baby into the world is a moment of pure joy - but it also brings practical considerations, like whether your current housing space is sufficient. For many parents-to-be, maternity leave introduces an added layer of financial uncertainty, which can feel daunting when exploring mortgage options.
While it’s true that some lenders may approach applications from those on maternity leave with caution, getting a mortgage during this time is far from impossible. With the right guidance and preparation, you can find options which align with your needs and budget.
In this guide, we’ll look into how maternity leave can influence your mortgage eligibility, what factors lenders consider, and actionable steps to help you secure an affordable deal tailored to your circumstances. We will cover:
How does being on maternity leave affect your mortgage application?
Should you tell your lender if you’re pregnant or going on maternity leave?
How much can you borrow for a mortgage if you’re on maternity leave?
Can I get a mortgage on maternity leave if I have bad credit?
How does being on maternity leave affect your mortgage application?
Taking maternity leave often means a temporary reduction in your income, which can influence how lenders assess your mortgage application. While some lenders consider your full pre-maternity wage, many focus on your reduced maternity pay instead.
This decreased income becomes the basis for their affordability calculations, effectively limiting the amount you can borrow. Since lenders prioritise ensuring you can comfortably meet your repayments, the lower maternity pay can affect your borrowing capacity. In some cases, certain lenders may decline to offer a mortgage altogether during this period.
Can you get a mortgage if you’re on maternity leave?
Yes, getting a mortgage while on maternity leave is entirely possible, though it may involve a few extra challenges compared to applying while working full-time. Some lenders might reject applications from those on maternity leave, but many are more accommodating.
Typically, they’ll require proof of your intention to return to work, the date you plan to do so, and confirmation of your full salary upon your return. If you’re self-employed, lenders may ask for additional evidence such as business accounts, SA302 forms, or tax year overviews from HMRC, as well as projections of future earnings to make sure your income will remain stable during and after maternity leave.
Given this, choosing the right lender is key to a successful application. It’s important to search for lenders who are understanding of maternity leave circumstances and won’t impose unnecessary restrictions or dismiss your application outright.
Should you tell your lender if you’re pregnant or going on maternity leave?
Yes, it’s essential to inform your lender about any significant changes in your circumstances, such as pregnancy or maternity leave, as these could affect your ability to repay the mortgage. Being transparent is not just a legal obligation, but also a practical step to ensure you secure a deal that fits your situation.
Honesty allows lenders to match you with a mortgage which aligns with your needs, avoiding potential complications later. If you withhold this information, it might still come to light during the underwriting process, through checks like reviewing recent payslips or other financial documents.
As such, failing to disclose such details could lead to delays, added stress, or even the withdrawal of your mortgage offer. Whereas, by being upfront, you can guarantee a smoother application process and reduce the risk of surprises down the line.
How much can you borrow for a mortgage on maternity leave?
The amount you can borrow for a mortgage during maternity leave varies widely depending on the lender. Some lenders may base their calculations on a portion of your proven income, while others might not consider your income at all. However, there are lenders who assess your borrowing potential based on your normal full-time wage, which can significantly increase your options.
Ideally, you should seek out lenders who allow you to declare your full income without imposing restrictive conditions. Most lenders offer loans equivalent to 4 times your income, while some extend to 5 times or even more in certain cases.
To get a clearer picture of your borrowing capacity, feel free to try our mortgage calculator.
Joint mortgages on maternity leave
When applying for a joint mortgage, lenders usually consider the combined income of both applicants to determine how much they’re willing to lend. If your partner or spouse plans to continue working after the baby is born, then their income can help simplify the process.
In select situations, you may even qualify based on your partner’s income alone. This can provide additional flexibility, allowing you to explore options for after your maternity leave. For instance, you might choose to reduce your working hours to spend more time caring for your baby, knowing that your partner’s income can support the mortgage repayments.
Can I get a mortgage on maternity leave if I have bad credit?
Securing a mortgage while on maternity leave can be more difficult if you also have a poor credit score. Lenders are generally cautious in such cases, and those willing to base lending on your full pre-maternity income are less likely to offer mortgages to applicants with bad credit.
Although, not all credit issues are treated equally. Lenders often consider factors like the severity of your credit problems, how long ago they occurred, and the steps you’ve since taken to improve your financial situation. A larger deposit can also work in your favour. After all, specialist lenders who focus on bad credit mortgages are out there.
If you want to get an idea of your current financial standing before you apply for a mortgage, you can use our free credit check tool (£14.99 per month after the free 30-day trial). Using it will help you to see any possible mistakes or fraudulent activity on your profile, so you can deal with such problems. The trial and subscription can be cancelled at any time.
Remortgaging on maternity leave
Remortgaging during maternity leave follows a process similar to applying for a new mortgage. Specifically, if you’re switching to a different lender, they’ll typically perform an affordability assessment to confirm that you can manage the repayments. Yet, as said, being on maternity leave might lower your perceived affordability, making it an obstacle to securing a new deal.
Most lenders will require proof that you intend to return to work with the same hours and employment terms as before. Some lenders take a stricter approach, while others may offer more flexibility and assess your borrowing potential based on your full pre-maternity income. And so, again, finding a lender which understands your situation and is willing to work with your circumstances is vital.
How to get a mortgage on maternity leave
Applying for a mortgage while on maternity leave follows much the same process as a standard application, with the added requirement of providing extra documentation to demonstrate your financial situation. To reassure lenders of your ability to repay, you’ll usually need to provide:
Proof that your income will return to its full level once you’re back at work, along with the expected date of your return.
Key details about your maternity leave, such as its start and end dates.
Payslips showing both your full pre-maternity wage and your current maternity pay (if applicable).
Evidence of savings and any additional income sources.
How a broker can help you get a mortgage on maternity leave
Admittedly, getting a mortgage while you’re on maternity leave comes with some unique challenges, but an expert mortgage broker can streamline the process by helping you:
Get a letter of reference: A broker can guide you in obtaining a reference letter from your employer. This letter confirms your intention to return to work, your expected return date, and any changes to your salary or terms of employment.
Prepare the necessary documentation: Your broker will assist in gathering all required evidence, such as payslips (pre-maternity and maternity pay), proof of savings, and details about your future income. Having these documents organised can significantly strengthen your application.
Find the right lender: Brokers have extensive knowledge of the market and can identify lenders who are more understanding of maternity leave applications. This saves you time, reduces stress, and might even help you secure a better deal.
It’s worth remembering that approaching unsuitable lenders can lead to offers based on reduced income or outright rejections, and multiple failed applications can also harm your credit score. This makes professional guidance from a broker invaluable.
At The Mortgage Genie, we specialise in helping individuals on maternity leave, paternity leave, and those expecting a child to navigate these challenges. With years of experience, we can help you secure the best possible mortgage deal for your circumstances. If you’re interested, then be sure to contact us today at 01915809890.
This information is a guide only and should not be relied on as a recommendation or advice that any particular mortgage is suitable for you. All mortgages are subject to the applicant(s) meeting the eligibility criteria of the specific lender. You should make an appointment to receive mortgage advice which will based on your needs and circumstances.