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Malcolm Davidson

Managing Director of UK Moneyman Ltd.

Malcolm Davidson

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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Can You Get a Mortgage on Benefits?

Across England & Wales, benefits have become a regular occurence to help boost a person’s income. Sometimes they are merely a top-up, whereas sometimes a person may be solely reliant on their benefits.

The short answer to the titular question, is yes, you can get a mortgage whilst claiming benefits, though this will be entirely dependant on the benefit(s) you claim, as well as various other circumstances both personally and financially.

If You Are Employed

You are much more likely to be accepted if you have regular employment, only using your claimed benefits as a monthly top-up. There are also far more mortgage lenders out there who are willing to lend to applicants on benefits, if they are in stable employment.

Of course you still have to meet the lenders criteria in order to proceed, but it’s a surprisingly welcome addition that many prospective buyers probably aren’t aware of.

Additionally, it may actually have a positive effect, as there are a lot of mortgage lenders who will assess your overall income with benefits included, meaning you may be able to borrow more than you otherwise would’ve.

If You Are Unemployed

This would make the process a lot more difficult. There are mortgage lenders who may consider lending to an applicant who uses benefits as their sole income, but this is very rare and most would want to see you in some form of employment.

The reason for this, is because when it comes to affordability checks, benefits alone will likely not be a sufficient enough income to afford monthly mortgage repayments.

Alternatively though, if you are unemployed and on benefits, but are making a joint application with someone who is employed, you would have a much better chance of being successful and have more lenders to choose from.

What type of benefits count as income when applying for a mortgage?

Though it may come as a shock, not only are there plenty of options for applicants on benefits, this actually extends to quite a number of benefit types as well!

Of course this varies from lender to lender, as not all will accept every single one, but overall there are quite a few to list. Here are some that may be considered;

As we mentioned above, not all mortgage lenders will accept every single one, but there are options for each of these. Our job as a trusted and experienced mortgage broker, is to check lender criteria and make sure that your circumstances align with it.

Remember that even if a mortgage lender accepts benefits as part of your income, this isn’t a guarantee that you’ll qualify for a mortgage. You will still need to pass affordability checks and meet the lenders additional requirements.


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If you are on benefits due to being ill or disabled, but you can afford a mortgage, you cannot be turned down for a mortgage due to your illness or disability. Anti-discrimination laws mean an applicant must be treated fairly.

The only instances in which you could feasibly be turned away for a mortgage, is if you fail affordability checks, your financial situation doesn’t meet lender criteria or a broker does not have a lender on panel who can work with that type of benefit.

Further to this, a mortgage lender cannot insist that your monthly payments be more or that you pay a larger deposit. If you can afford a mortgage, whether ill or disabled, you have the same rights as anyone else.

This may not be the case when applying for life insurance.

Can I get a mortgage on Universal Credit?

From 2013, many different types of benefit were merged into one single payment, under the name of Universal Credit. As listed above, Universal Credit will be considered by some mortgage lenders, as will Child Tax Credit, two benefits that now come under the same name.

Legally, you cannot be declined just for being on benefits, which should serve to encourage prospective home buyers who earn a solid income alongside their benefits and believe that they can afford a mortgage. A larger deposit of, say 20%, will work in your favour.

It is important to remember, however, that even with benefits to boost your income, you may still not pass affordability. An experienced and qualified mortgage advisor will be able to run through your case initially, to see if this will be an issue or not.

How much can I borrow if I am on benefits?

Each lender assesses affordability differently, so the amount you can borrow will be dependant on the mortgage lender.

Of course, how much income you have, either on benefits alone or combined with employment income, will determine how much you can borrow. Additionally, your credit history and the amount of deposit you have can affect this.

The way your credit history would affect this, is if you have adverse credit, you may still be eligible for a mortgage, but it will likely have higher interest rates. When your affordability is checked, the mortgage lender will look to see if you can afford those higher rates and judge accordingly.

With your deposit, you’ll typically need at least 5-10% for a standard purchase. When you are on benefits, however, whilst that may still be sufficient, increasing that to perhaps 20%, will increase your chances of mortgage success.

In the latter case, you’ll be borrowing less, but will have put more in of your own money, therefore will be deemed less of a risk to the lender and more likely to be accepted for a mortgage.

Remember though, that some mortgage lenders will only accept benefits as a contribution to income and some won’t accept it at all. If this is the case and you can’t make up the monthly payments for the amount you need, you may be offered less or even be declined on your application.

What type of mortgage can I get on benefits?

You’ll find that there are lots of different types of mortgages you can get whilst on benefits, providing you meet the mortgage lenders criteria. These can range from repayment and fixed-rate, to interest-only and variable mortgages, even buy to let mortgages!

Your dedicated mortgage advisor will take a look at your case, running through to make sure you are eligible for a mortgage before any applications are made. You may not be eligible for every mortgage type, though your mortgage advisor will inform you of this.

Some mortgage lenders may not take into account a minimum income for buy to let purchases, which means that in some cases, you may be able to obtain a buy to let mortgage whilst on benefits. That being said, your options may be more limited and you’ll have much stricter lending criteria to face.

The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.

Are there any mortgage schemes that could help if I am on benefits?

For applicants on benefits who are struggling to afford a first time buyer mortgage, you may be pleased to know that there are a selection of government mortgage schemes, each designed to help a first time buyer get onto the property ladder.

Shared Ownership Scheme

Shared Ownership allows for first time buyers to purchase a percentage of their home, typically between 25-75% of the value, with the rest being bought through a local authority, such as council or housing association.

This lowers how much you need to borrow, as you’re only purchasing part of it, not all of it. You will need to pay the local authority back a monthly rental fee for the part they own, though you may be able to increase your shares later on.

Shared Ownership Mortgages are great for applicants who can afford the initial deposit, but cannot afford the full purchase price.

Home Ownership for People with Long-Term Disabilities (HOLD)

Whilst it has its own name, HOLD is actually not a separate product, but a way for disabled applicants of which other Shared Ownership products may not be applicable, to purchase a home.

In order to qualify for HOLD, you must be a first time buyer or be classified as in need of housing. You must have a household income of £80,000 or less (outside of London – £90,000 or less if you are in London), and you must not have any outstanding credit problems, such as CCJ’s.

Not all mortgage lenders will offer products on this government scheme, so you should definitely get in touch with a qualified mortgage broker to see whether or not they are able to help with your enquiry.

A Right to Buy is another scheme that works well for first time buyers looking to get onto the property ladder. This scheme applies to local authority (council or housing association) tenants.

The scheme factors in how long you have been a tenant within the public sector, the value of the property and the type of property (flat or house), in order to apply a discount on the market value of the property.

This means that eligible tenants can purchase the home that they have living in, for a price that is less than it would otherwise have gone for. This discount does have a maximum cap depending on where you are living, so it is worth speaking to an advisor ahead of time.

In order to qualify for a Right to Buy Mortgage, it needs to be your main home, have no shared facilities such as kitchen or bathroom, you are a secure tenant, and you have been a public sector tenant for at least 3 years (this does not have to be 3 years in a row).

If your home was sold by your local council or housing association whilst you were living in it, you may still be able to access this scheme with a Preserved Right to Buy. To check whether or not this applies, or to see if you are eligible for a Right to Buy Mortgage, you need to get in touch with your local authority.

Book Online & Speak with a Qualified Mortgage Advisor

As you can see, just because you are on benefits, it does not mean that getting a mortgage is impossible. Quite the contrary, in fact! Providing you can match the lenders criteria and pass affordability checks, you could be well on your way to home ownership.

To get started on your mortgage process, book your free initial mortgage appointment online with a member of our open & honest mortgage advice team, using our online booking feature. We are open 7 days a week, from early until late, with appointments at times that best suit you (subject to availability).

About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm Davidson

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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