Single parent mortgages with child benefit payments

If you're a single parent buying a home you can get a mortgage, and some lenders will accept child benefit payments as part of your income.

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Whether or not the child benefit or child maintenance payments you receive will be classed as income depends on the mortgage lender. Some banks will take 100% of your child support into account once it’s been paid for a few months, some might consider a percentage of it, and others may ignore it altogether.

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Using your child benefit as income

As a single parent, you may be eligible to receive child benefit or child tax credit, and many lenders will accept it as part of your income.

If you’re receiving child support payments from a former partner, these are also taken into account when assessing your income.

You’ll also need to have sufficient income and meet the lender’s credit criteria for approval, just like any other loan.

Lenders’ policies regarding child benefit payments

We asked some of the UK’s major mortgage lenders about their policies on mortgage applicants receiving child benefit or child tax credit. Here is what they told us.

ProviderWhat it told usCompare
BarclaysWe can take up to 100% of the benefit income into account when assessing affordability.Compare with broker
Halifax/Lloyds Bank/Bank of ScotlandChild benefit allowance and child tax credit will be considered within our affordability assessment.Compare with broker
Santander100% of an applicant’s income from child benefit and child tax credit will be considered during affordability assessments. Compare with broker
Virgin MoneyChild benefit and child tax credits are not acceptable forms of income for the purposes of affordabilityCompare with broker
Yorkshire BankApplicants earning child benefit allowances and child tax credit will all be considered. Compare with broker

Tips for saving a deposit on a single income

Trying to put together a deposit for a home while raising a child on a single income can be difficult, especially as the costs of both are increasing. Take note of the following if you’re looking for ways to save for a home and you’re the provider for a dependent child.

  • Government assistance. Single-income parents may be eligible for child benefit and child tax credit. Government assistance can help cover the incidental day-to-day expenses and larger expenses like rent and child care, which can give you a little more room in your budget to save.
  • How much do you earn? When it comes time to apply for your mortgage, you will want to know how much you can borrow. A higher income means you can borrow more, and pre-approval will give you a ballpark figure. Once you’ve done a comparison of mortgages, speak to the lender directly to find out whether parenting-related payments can be included on your mortgage application.
  • Budgeting. A budget is essential to any financial plan. List all the money you get, your income, and look at ways to cut down on the money going out. You can use mobile budgeting apps like Yolt to keep track of your spending.
  • Get a savings account. High-interest savings accounts are great if you’re saving for a goal, such as a mortgage deposit. Not only do the accounts let you earn interest, they also come with features to help you save. Automatic savings plans are a great way to save for a goal.
  • Get the right mortgage. Spend some time comparing mortgages and find the mortgage that’s the right fit for you. The right mortgage charges less in fees and gives you the flexibility to change the features as your situation changes in the future. A comparison of fees versus features now will save you time and money later.

Get free, personalised help from a mortgage broker

Mortgage brokers specialise in helping borrowers in difficult or unique circumstances, including borrowers receiving government benefits. They can help you find lenders who accept government assistance as a source of income, and will help you work out how much you’ll realistically be able to borrow to avoid being rejected for a loan. Mortgage brokers get a commission from the lender, meaning you don’t have to pay for their help. L&C is a fee free mortgage broker with specialists who can offer advice.

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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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