Each lender has a different criteria for this, and different lenders may take different proportions of the maternity income into account.
Will my maternity income be taken into account?
Every lender differs on this, so it is important to consider your application before submitting it to a lender.
Some lenders may take into account different proportions of the income, but some may or may not take into account the future income after the maternity period completes.
This can create problems as future income is typically much higher than the maternity income, if you are on maternity pay, which could throw up affordability issues when applying for a mortgage, despite you being able to afford the repayments.
How can I prove future income?
There are lenders out there who will consider the full salary you will be earning after the maternity period, they normally just require proof, such as reference or a letter from you employer, which confirms the date you’ll be resuming work and the terms of work such as hours and salary.
What should I disclose?
You should disclose that you are on maternity leave, as it will affect your application.
If you don’t disclose this information to the lender then it could be seem as non-disclosure and result in your mortgage application being declined.
You should also disclose if you are pregnant when applying, as the lender will need to know as it will have an affect on your income during the course of repayments.
How much can I borrow?
This all depends on the lender. Some will only accept 50% of your income, while some will base your affordability on your usual salary.
The lenders then multiply your income amount by four or five times to determine how much you can borrow, just like a normal mortgage application.
Bear in mind that you will still have to meet a long list of criteria set by the lender when applying for a mortgage during maternity leave, so even though they may accept your maternity income, you could still face issues relating to your credit score or other factors such as deposit amount.
For advice on getting a maternity income mortgage, speak to one of our expert advisers who will be able to help you with the next steps.
