You should still be able to get a mortgage if you have an illness or disability, even if your income is made up partly or solely from benefits.
Lenders cannot discriminate against you if you have a disability or illness, whether it’s a mental or physical condition. They should simply apply standard mortgage assessment criteria, deciding whether to lend to you based on your application, which takes into account your income, outgoings, credit history, and personal circumstances.
Here’s what you need to know if you’re in this situation, including charities and government schemes that could help you understand your options, and improve your chances of having your mortgage application accepted.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
Can you get a mortgage if you’re ill or disabled?
Yes, but as with any mortgage the success of your application will depend on an assessment of your financial position. If you can afford repayments, lenders cannot reject your application because you suffer from a disability/illness, or request that you put down a bigger deposit than other customers.
You are basically protected from discrimination in this situation under the Equality Act 2010. This applies to a wide range of illnesses and disabilities, including cancer, for example, HIV, or mental illnesses such as depression. Ultimately, if your ability to carry out normal day-to-day activities is impacted by your condition, you fall under the definition of disabled as set out in the Equality Act, and cannot be discriminated against on these grounds.
Can you get a mortgage if you’re on benefits?
The chances of you getting a mortgage if you’re on benefits will typically be greater if this money only forms part of your income. Lenders may include the full amount you receive in benefits as part of their mortgage affordability process, or a percentage, depending on their criteria.
Lenders will ultimately want to know whether you can afford the mortgage repayments, both now and if interest rates rise in future, based on a thorough look at all your income and outgoings. This includes whether you could continue to repay your mortgage if your personal, or wider circumstances changed, for example, if you lost your job.
Lenders may take into account the following benefits as part of your income when assessing whether to offer you a mortgage, but it’s worth checking before you apply, as their rules can vary:
- Universal Credit
- Attendance Allowance
- Carer’s Allowance
- Child Benefit
- Child Tax Credit
- Disability Living Allowance (DLA)
- Incapacity Benefit
- Industrial Injuries Benefit
- Maternity Allowance
- Pension Credit
- Severe Disablement Allowance
- Widow’s Pension
- Working tax credit
If your income is solely from benefits, it’s a good idea to seek help from a specialist mortgage broker, as they will know which lenders may be willing to offer you a mortgage in these circumstances. This way, you avoid making applications which will be rejected once the lender assesses your situation, as this could damage your credit score and make it harder for you to get a mortgage in future.
What should you do before applying for a mortgage?
Whatever your personal circumstances, if you need to apply for a mortgage, start by making a list of your income and regular outgoings, and gathering together paperwork you’ll need to support your application. This will include recent payslips, bank statements, your latest P60 from your employer (if you have one) and details of any regular payments you make, for example, into your pension or to pay down credit card debts or personal loans.. Ideally, you need to ensure your finances are in the best shape possible before applying for a mortgage, so if you’re able to clear any debts before you apply, this is likely to stand you in good stead. Read our article How to apply for a mortgage – everything you need to know.
Consider what would happen to your budget if your circumstances were to change, such as you lost your job, or your benefits were reduced. Find out more about how to tackle a benefit reduction in our article My benefits have been cut – what can I do?
If your mortgage application is declined, you’ll need to establish the reason, and boost your chances of being accepted in the future. Reasons may include, for example, that mortgage payments are considered unaffordable, or you have a poor credit history. But as explained, you shouldn’t be refused a mortgage because of a disability or illness. Read more in our article What to do if your mortgage application is declined.
Shared ownership schemes
If you’re disabled and need a mortgage, you may be able to get help from a government scheme or independent organisation offering a shared ownership scheme. These include
1. HOLD - Home Ownership for People with Long-Term Disabilities
This is a type of shared ownership scheme for people with long-term disabilities under the government’s affordable housing programme.
Similarly to other shared ownership schemes, you buy a share of a property and the housing association buys the remainder, with the opportunity to increase your share over time, if it’s affordable to do so. You buy, say, between 10% and 75% of the home’s value, and pay rent on the remaining share. You can apply for the HOLD scheme if shared ownership properties otherwise on the market are unsuitable for your needs. For example, you need ground-floor access. You need an income of £80,000 a year or less outside London, or £90,000 a year or less in London to apply.
You will be helped with the mortgage application and buying process, as the housing association will negotiate on your behalf. You can find more information on the Government’s HOLD website.
2. My Safe Home
If you’re disabled, you may also get help through the specialist organisation My Safe Home, which negotiates with lenders to secure mortgages through shared ownership schemes. Find out more on the My Safe Home website.
Seeking guidance
There are a number of charities offering advice to disabled and ill people across the country. For example, you can contact Disability Rights UK, Scope, or your local Citizens Advice for more information. Charity Disability Action can offer help if you live in Northern Ireland.
Where can you get specialist mortgage help?
If you’ve got a disability or illness, then it’s a good idea to seek regulated advice from a professional mortgage broker. They know the market well and will be aware of the different lending criteria that each provider has, meaning they’ll be able to point you in the direction of a lender suited to your personal circumstances.
If you’re considering getting a mortgage adviser and would like to know how to find the right one for you, read our article Should I get advice on my mortgage?
Alternatively, there are a number of well respected fee-free mortgage brokers available in the market.
If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.