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How can maternity leave affect your mortgage?

A pregnant woman holding her bellyAs any parents-to-be will testify, planning ahead for a new baby is a huge task - especially if you need to move house before the little one arrives to give yourselves more space.

Just like any other borrower, you will be focused on finding the best mortgage for your circumstances, but there are concerns that certain applicants will find the home-buying process more tricky because of the way their lender treats those on maternity pay.

Lenders guidance isn't very clear

Understandably, a lender will want to assess your income to ensure you don't borrow more than you can afford to repay, but mortgage experts say there is a lack of clear guidance on how to treat those on maternity benefits.

“The real problem is the whole area is murky and confused, as lenders differ in their attitudes,” says Melanie Bien from broker Private Finance.

This is a view shared by David Hollingworth at broker London & Country.

“Different lenders employ very different approaches to the way they view maternity leave and the level of income they are prepared to take into account when deciding how much to lend,” he says.

What you can expect to happen

Some lenders will simply use the income that can be confirmed at the time you apply for your mortgage, so if this takes place before you go on maternity leave, there is no problem.

Alternatively, if you are already on maternity leave when you apply for your mortgage, but plan to return to work full-time, your lender may require you to get proof from your employer of your intention to go back to work before agreeing to make a lending decision based on your normal income; certain lenders will only do so if you are due to return to work within a given time-frame.

In the worst case scenario, lenders may only take into account the actual income at the time of application which can prove particularly problematic if your income is reduced to just the statutory maternity pay.

What lenders say

Santander said it would take into account the fact that a borrower’s salary will return to normal following maternity leave as long as the applicant could confirm their intention to return to work on the same hours and pay - and if their employer confirms a position is still open.

“We also consider affordability of the mortgage for the period prior to the borrower returning to work, including any additional future expenses - such as childcare - to help ensure the borrower does not find themselves financially stretched,” its spokesperson said.

Nationwide says that if a mortgage applicant is on maternity leave, or about to go on maternity leave, it will take into account the salary they would expect to earn once they returned to work - as long as proof could be provided. 

“We would ask their employer to confirm the applicant's salary and that the applicant had expressed their intention to return to work,” a spokesperson says.

The issue of affordability

As a borrower with a baby on the way, you may be unhappy about your reduced maternity pay being taken into account - as this could have a big impact on your ability to get a mortgage. But you have to remember that for a lender, affordability is key.

“Although it is illegal to discriminate against a woman for having a baby, if you are taking out a new mortgage, it is fair that lenders will want to see evidence that you can afford the repayments,” says Bien.

Practical tips for parents-to-be

The good news is, by taking a few simple steps, you should be able to find a deal without too much difficulty.

“If you are planning returning to work and can produce a letter from your employer confirming your return date and salary, this should satisfy the lender,” says Bien. “They should then use this when calculating how much you can borrow.”

You also need to do as much research as you can such and compare mortgages from across the whole of the market to find a deal that is right for your particular circumstances.

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Esther Shaw

Esther Shaw

Esther Shaw is a regular contributor to and is the former deputy money editor at The Independent and Independent on Sunday. Before that, she worked as a money and City reporter on The Daily Express and Sunday Express.
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