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How to get a mortgage on benefits
If you’re considering applying for a mortgage and are currently receiving benefits, you may be wondering whether those benefits can be counted as income for a mortgage application. The good news is that some lenders do accept benefits as a valid and sustainable source of income — and in the right circumstances, they can be enough to secure a mortgage.
At Strive, we specialise in helping clients obtain mortgages where income is partly made up of benefits, or in some cases consists solely of benefits. We understand lender policy in detail, know which benefits are accepted, and know how to present cases so they are assessed properly rather than declined automatically.
In this guide, we cover everything you need to know about getting a mortgage on benefits. We explain which benefits lenders will consider, how affordability is assessed, which lenders are most suitable, and the common pitfalls to avoid when applying.
Getting a mortgage on benefits
Getting a mortgage on benefits is often more achievable than people expect. Many UK mortgage lenders will consider benefits as income — but how they treat them varies significantly.
In practice, the key differences between lenders are:
- Which lenders will accept benefits at all
- Whether benefits are accepted in full or only a percentage (for example 50% or 75%)
- Which types of benefits are acceptable and which are excluded
- Whether benefits can be used as the sole source of income, or only alongside employment or other earnings
- Whether there is a limit on how much of your total income can come from benefits
This means two applicants with identical benefit income can receive very different outcomes depending on the lender and how the application is structured.
What benefits count as income for a mortgage?
Some benefits that may be considered by mortgage lenders as potential income sources for mortgage applications include:
- Attendance allowance
- Carers Allowance
- Child Benefit
- Child Tax Credit
- Disability Living Allowance (DLA)
- Incapacity Benefit
- Industrial Industries Benefit (IIB)
- Maternity Allowance
- Pension Credit
- Severe Disablement Allowance
- Universal Credit
- Widow’s Pension
It’s worth noting that the acceptance of these benefits as income may vary among lenders, and each lender may have their own specific criteria and guidelines.
The housing element of the universal credit will not be used.
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Can you get a mortgage while on benefits?
Certain benefits provide a lifetime guarantee of income, which can instill confidence in lenders. However, even benefits that are only payable for a limited period of time may still be considered in some cases.
For instance, child maintenance and child benefit are benefits that may not be received throughout the entire mortgage term, as they typically decrease as the child grows older and becomes less dependent.
Nevertheless, some lenders understand that as the child becomes more self-sufficient, the parent may have the capacity to work additional hours and incur reduced childcare costs. Therefore, these types of benefits may still be taken into consideration by some lenders when assessing a borrower’s income for a mortgage application.
Should I buy a house or rent a house if I receive benefits?
Whether to purchase a home while receiving benefit income is a personal decision that depends on individual circumstances.
Owning a house has its advantages, such as building equity over time and eventually paying off the mortgage, unlike renting where payments continue indefinitely.
Additionally, owning a home allows for more freedom in customising and personalising the property. However, it also comes with greater responsibility for repairs and maintenance, in contrast to renting where these tasks are typically the landlord’s responsibility.
Which lenders accept benefits income?
Nationwide, NatWest, Santander, and Barclays are among the lenders that may have relatively accommodating criteria when it comes to considering benefit income for mortgage applications.
How is income from benefits calculated for mortgage affordability?
The acceptance and assessment of benefit income can vary among lenders. Many lenders require borrowers to have earned income in addition to benefit income. Some lenders may cap the amount of benefit income at the same level as earned income.
For instance, if you earn £15,000 per year as a salary and receive £20,000 in benefits, some lenders may limit the use of benefit income to £15,000. Additionally, while some lenders may not accept any benefit income, others may accept 100% of it, while some may consider a percentage, such as 50-60% of the total benefit income.
Household Income cap for child benefit income.
It’s important to note that while some mortgage lenders may accept child benefit income, there may be restrictions based on the overall income level of the household. For example, some lenders may not accept child benefit income if one applicant in the household has an income above £50,000, while others may have a threshold for the total household income being above £50,000.
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How much can I borrow for a mortgage that accepts income from benefits?
The amount you can borrow for a mortgage will depend on various factors, including your individual circumstances and the criteria of the lender you are working with.
As a general guideline, lenders typically offer 4-5 times your income as the maximum borrowing amount. However, this can vary among lenders and may be subject to additional considerations when benefit income is involved.
In many cases, lenders may consider 100% of your main income when determining the borrowing amount, and may also take into account a percentage of your benefit income, such as 50% or 60%.
For instance, if you earn a salary of £30,000 per year and receive £10,000 in benefits, assuming the lender offers 4.5 times income multiples, you may be able to borrow between £157,500 and £180,000, depending on whether the lender considers 50% or 60% of the benefit income.
Can I get a mortgage while on benefits and with bad credit?
If you have bad credit and are looking to get a mortgage with benefit income, it may be more challenging to find a lender who is willing to approve your application.
Some lenders may require a larger deposit or charge higher interest rates to offset the perceived higher risk associated with bad credit.
However, the specific impact on your mortgage application will depend on the type and level of adverse credit, as well as other factors such as your income, employment stability, and overall financial situation.
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What documents are needed for benefit income?
Lenders require evidence of benefit income when assessing mortgage applications. This may include providing bank statements for the past 3 months to show the regular receipt of benefit payments, as well as the latest award letter from the relevant benefit agency to confirm the amount and duration of the benefit income.
How can Strive help?
At Strive, we regularly help clients secure mortgages where benefits form part of the income — whether that’s alongside employment, self-employed earnings, pensions, or as a primary source of income in the right circumstances. We understand which benefits lenders will consider, how different lenders assess sustainability, and how to present cases so affordability is judged properly rather than dismissed at the first hurdle. From Universal Credit and Child Benefit to disability-related and long-term benefits, we take a whole-of-market view and match you with lenders whose criteria genuinely fit your situation. Mortgages involving benefits are not “one size fits all” — they require experience, precision, and the right lender strategy. That’s exactly where Strive adds value.
