In this brief guide we are going to answer the questions: Can I get a mortgage on carers allowance?

Can I get a mortgage on carers allowance

Yes, you can get a mortgage on a carer’s allowance as long as you are able to prove that you can make the monthly mortgage repayments. As a carer, you may also be able to receive other benefits such as universal credit, tax credits, job seekers allowance, housing benefit,  etc which many mortgage lenders will consider when assessing your mortgage affordability.

Being on a carer’s allowance may also affect how much of these benefits you are able to assess.

When assessing your eligibility for a mortgage, the mortgage lender is not concerned with the type of income you earn, be it a carers allowance income or not, as long as it is legitimate income. They are simply interested in how much disposable income you have at the end of each month which will allow you to be able to afford a mortgage.

Use a mortgage calculator

Tell us about you
 
Repayment type
First-time buyers are unlikely to be able to secure an interest only mortgage
Repayment
Interest-Only
 
Property value
£
 
Deposit amount
£
 
Mortage Term
Min 10
Max 40
 
years
 
Initial interest rate
Choose an example below, or enter a rate if you already know it
1.9%
2-years fixed
2.2%
3-years fixed
2.4%
5-years fixed
 
Enter a Different Rate
 
Calculate

 


Government schemes for those on carers allowance

Aside from being able to display other benefits, you may receive as part of your income when trying to get a mortgage on a carer’s allowance you may also be eligible for government schemes which will generally help you reduce the price of the property, or increase your mortgage deposit so you can get on the property ladder on a carer’s allowance.

Some of these government schemes include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy- allows you to buy your home at a discount price.
  • Preserved right to buy- same as above.
  • Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

FAQs: Can I get a mortgage on carers allowance

How much will I get on a carer’s allowance?

A carer’s allowance will earn you £64.60 a week in 2018/19. This may go up in 2019/2020.

The amount you get on a carer’s allowance is set and will not change if you look after more people.

To get the best return it may be better to simply look after one person. Two people cannot claim for a carer’s allowance on one person although one of the people may be entitled to carers credit.

What is a carer’s allowance?

A Carer’s Allowance is a type of benefit which you can claim if you provide full-time care to a disabled person. This means thirty-five hours or more a week worth of care to a disabled person.

This person does not have to be a friend or family member, you also don’t need to live with the person to be able to claim carer’s allowance.


Mortgage broker for a carer’s allowance mortgage

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide we answered the question: can I get a mortgage on carers allowance If you have any further questions or comments please let us know below.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.