Single person mortgage: Getting a mortgage on your own

There are no limits for single people who want to get a mortgage, other than the financial limits created by applying with only one income.

Mortgage lenders will decide the amount you can borrow from them based on a multiple (usually between four and five times) of your annual income.

It means to buy a £200,000 home with a 10% deposit, a single person would have to earn at least £36,000 a year to qualify. Meanwhile, a couple could be eligible if they only earn £18,000 each per year.

Nevertheless, the government has created a number of schemes for low-earning singletons to get on the property ladder without committing to a mortgage with a partner.

How can low earners be approved for a mortgage?

• Help to Buy. This equity loan scheme could help a lot of single people onto the property ladder. It allows them to apply for an equity loan from the government, worth up to 20% of qualifying new-build properties. This loan is interest-free for the first five years and doesn’t have to be repaid until you sell the property or complete your mortgage. Using this scheme, a single person wanting to buy a £200,000 house with a 10% deposit could access a 70% mortgage worth £140,000. They could be potentially be approved for this mortgage with an annual income of just £28,000.
• Right to Buy. If you’re living in social housing, you may be eligible to buy your home at a huge discount under the Right to Buy scheme. The size of the discount depends on whether your property is a house or a flat and how long you’ve lived there. A single person who has lived in a £200,000 council flat for three years could be entitled to a 50% discount. With this £20,000 deposit, they’d only need a 40% mortgage worth £80,000, which they could be approved for while earning as little as £16,000 a year. However, there’s no guarantee your property will be available for sale under Right to Buy. To find out, you’ll need to apply to your landlord via the Right to Buy website.
• Shared ownership. This scheme allows you to part own part rent a property. You could apply to buy between 25% and 75% of your property, then pay subsidised rent on the remaining portion. You’d only need a mortgage for the portion of the property you’re buying and the deposit can be as small as 5% of this portion. A single person could apply to buy 25% of a £200,000 house. With their £20,000 deposit, they’d only need a mortgage for £30,000. However, in this situation, lenders will want to see evidence you could afford to pay rent, ground rent and service charges for this property, alongside the mortgage.
• Rent to Buy. This scheme allows you to rent a property for up to 5 years at 80% of the market rate. This allows you to quickly save up a bigger deposit to buy the house (either outright or via shared ownership). When you’re ready to buy it, you’ll be gifted 10% of the property’s value to add to your deposit, reducing the amount you need to borrow for a mortgage. There’s no obligation to buy the property you’re renting, although there’s an expectation you’ll aim to do this.
• Lifetime Isa. These savings accounts allow you to claim a free top-up on your mortgage deposit from the government. With a Help to Buy Isa, you’ll get a 25% top-up on your savings when you use them to pay for a mortgage deposit. You can place up to £1,200 in this account in the first month, followed by up to £200 each additional month. The maximum bonus is £3,000. With a Lifetime Isa, you can deposit as much as you like, but you’ll only claim a 25% top-up on £1,000 worth of savings per year, for every year until you turn 50. Crucially, you’ll pay a huge penalty if you withdraw Lifetime Isa funds for any reason other than a mortgage deposit or to fund your retirement.

How to prepare your mortgage application

One advantage of applying for a mortgage alone is there will be less paperwork.

Nevertheless, in order to approve your mortgage application, a lender will need to see:

• ID and proof of address
• Proof of earnings
• Proof of deposit
• Recent bank statements
• Up to three years’ worth of payslips (if you’re self-employed)

As part of a lender’s affordability checks, you’ll be credit checked immediately after submitting your mortgage application. It’s well worth preparing for this credit check now by ensuring all your debts and bills are paid on time. It’s also recommended to check for errors on your credit report by contacting any of the UK’s major credit reference agencies: Experian, Equifax or TransUnion (formerly Callcredit).

Should you use a mortgage broker?

A mortgage broker is a knowledgeable professional who will search the whole mortgage market on your behalf and recommend the best deals most likely to be available to you.

If you’re a low earner, it could be well worth working with a mortgage broker, as they’ll have detailed knowledge of lenders’ eligibility criteria. As such, they’ll be able to point you towards those willing to lend to someone with your financial circumstances.

This saves you the lost time, stress and credit score damage that occurs when you’re turned down by multiple lenders.