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SantanderNatWestBarclaysRoyal Bank of ScotlandTSBAccord MortgagesHSBCCoventry Building SocietyBankofIreland4IntermediariesThe Mortgage WorksSantanderNatWestBarclaysRoyal Bank of ScotlandTSBAccord MortgagesHSBCCoventry Building SocietyBankofIreland4IntermediariesThe Mortgage Works
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS. The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
Last updated
June 6th, 2023

Can I get a mortgage with a low income?

Yes, you can. Some high street lenders have no minimum income requirements, meaning you can qualify for a mortgage no matter how much money you have coming in each month. 

Having a lower income will reduce your borrowing power though. So be prepared that you may not be able to borrow as much as you want or need to without some form of assistance. This could be through the use of a home ownership scheme, or from helpful relatives. 

An important thing to note is that income isn’t always restricted to earnings. Most lenders will gladly accept other forms of income, such as pensions, child maintenance payments and benefits. 

How much could I borrow if I have a low income?

In most circumstances, 4.5 times your household income is the average amount you can expect to borrow. So if your income is £20,000 a year and the lender uses an income multiplier limit of 4.49, your loan would be in the region of £89,800. 

People in certain professions may be able to borrow at a higher multiple of their income.

Lenders look at your affordability in more detail than simply how much you earn, however, so not every penny will necessarily go towards your loan calculation. 

They will look at your outgoings to build a full financial picture, such as:

  • Regular bills

  • Financial responsibilities

  • Your credit history

You can also use our mortgage affordability calculator to see how much you could borrow.

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What counts towards income on a mortgage application?

Not all lenders are willing to consider all forms of income types, but there are certainly some willing to consider most or all of the below examples:

  • Salary from employment or self-employed income

  • Overtime, bonuses, commission and earnings from a second job, however, some lenders will only count 25-50% of this type of income

  • Most benefits, so long as they are regular and ongoing

  • Child maintenance payments

  • State and private pensions

  • Some investments

  • Mortgage subsidy income payment protection

What documents do I need to prove my income?

Being on a low income won’t necessarily change which documents you'll need to provide in support of your mortgage. All lenders will want clear evidence of any earnings, benefits and other income that you have coming in each month. This could be in the form of any or all of the following documents:

  • Payslips for a period of at least three months if you’re employed

  • Evidence of bonuses, overtime payments or commission, if not included on your payslip

  • If you’re self-employed, you’ll need to show two to three years of accounts and tax calculations

  • Bank statements going back three to 26 months are sometimes required in addition to payslips/tax calculations

  • If you receive benefits, a benefit award letter for each separate type will be needed from the department for work and pensions (DWP)

  • A copy of a court-ordered maintenance agreement or a CSA assessment for child maintenance payments

  • Your latest annual pension statement or a P60 for pension income

What could I do to improve my mortgageability?

Everyone should take some time to get themselves mortgage ready, but if you’re on a low income, it can be even more important. This may increase the potential of your application being accepted, and, in some circumstances, will enable you to borrow more. The following steps will help to increase your appeal to prospective lenders ahead of your application:

Improve your credit record

Having a clean credit history with no late or missed payments signals to lenders that you are a responsible borrower. You can check your credit score prior to an application and work on improving this.

Reduce your outgoings

As what you pay out each month affects your overall affordability, take any steps you can to reduce them. This could be making sure you’re on the best possible tariffs for bills or cutting back on subscriptions and lifestyle luxuries that you don’t need.

Choose a lender that looks at your whole income

Choose a lender that accepts 100% of your overtime payments, or looks at every benefit type that you receive. Borrowing from the most suitable lender can make a big difference to not only getting lender approval, but to your potential loan size.

Save up a larger deposit

A larger deposit lowers the loan to value ratio of your borrowing, which means you will have access to lower interest rates. Lenders are also more confident in their lending when you provide a larger deposit, as the less of a risk you appear to be as a customer.

Buy with someone else

Joint mortgages can help you achieve the loan you need to buy a property, as lenders will combine the income of all applicants on the application. Whilst joint mortgages are typically used for couples. Some lenders will even allow three or four people to buy a house jointly, which can increase your buying power even further.

How much deposit is needed to get a mortgage on a low income?

Most applicants need a minimum deposit of 5% of the total value of the property for a 95% LTV mortgage. Lenders offer better interest rates and potentially larger loans to those with a bigger deposit, so saving as much as possible will certainly benefit those on a low income. 

That said, saving a deposit on a low income can be difficult. There are a few options available if you’re unable to save much:

  • Guarantor mortgages – allow you to borrow up to 100% of the cost of the property, assuming your guarantor is able to pass the lender’s affordability checks

  • A gifted deposit – you can accept a gifted deposit from most family members, so long as you can provide evidence of its origin

  • A Lifetime ISA – if you’re under 40, this government scheme tops up your own savings by an additional 25% each year, helping you grow them more quickly

Do mortgage lenders accept people who receive benefits?

Yes, most lenders allow people to supplement their mortgage income with some forms of benefits. But it’s less straightforward if you rely on benefits exclusively.

A number of the larger high street lenders such as Halifax, Nationwide and TSB will consider applicants that receive benefits, so long as ongoing payments can be proven.

Not all lenders accept all types of benefits, so it’s important to opt for a lender that is willing to consider the type of benefits that you receive.

You may be able to use some or all of the following benefit types in support of your mortgage, depending on the lender:

  • Attendance allowance

  • Carers allowance

  • Child benefit

  • Child tax credit

  • Disability living allowance

  • Disability income support

  • Employment and support allowance

  • Industrial Injuries Disablement Benefit

  • Pension credit 

  • Personal Independence Payment

  • State widows pension

  • Working tax credit

  • Universal credit

What other support is available if you have a low income?

Shared ownership

The shared ownership scheme helps those unable to borrow enough to buy a home outright, to buy a share in a home instead. This can be as little as 10% to as much as 75% of the home initially.

Ownership is increased through a process known as staircasing, which allows you to buy more of the property in chunks as small as 1% extra at a time. Some terms restrict you from owning the property 100%, so it’s best to seek advice from a qualified broker if this is your aim.

First homes scheme

The first homes scheme was introduced in 2022 and provides first-time buyers with the opportunity to buy a home at a significant discount on the market value (30-50%).

All first time home buyers with a household income below £80,000 (£90,000 in Greater London) are eligible. Key workers and those with personal links to the geographical area of homes within the scheme will be prioritised. 

The home will need to have been purpose built for the scheme, and the idea is that it is only sold on to other people eligible for the scheme, keeping a pool of affordable homes available to first-time buyers indefinitely.

Right to Buy/Right to Acquire

Right to Buy

The Right to Buy scheme offers council tenants in England a significant discount to help them buy their rented home. The level of discount is based on the current market value of your home, minus 35-70%, depending on how long you’ve been a tenant.

Right to Acquire

The right to acquire scheme is similar to the Right to Buy, however, it’s exclusively for housing association tenants in England. The discount offered in this case is set at between £9,000 - £16,000, depending on the value of your rented home. 

Deposit unlock scheme

The Home Builders Federation introduced the first non-government led home ownership scheme in 2022, which is known as the Deposit Unlock scheme.

This provides the opportunity for anyone (not necessarily a first-time buyer) to purchase a new build home with just a 5% deposit. To date, a number of home building companies are participating in the scheme, and a handful of lenders have signed up to it.

Help to Buy

The Help to Buy mortgages scheme is no longer open for residents in England, Scotland and Northern Ireland. However the scheme is still available in Wales, and you can find further details here.

What other support is available if you have a low income?

Shared ownership

The shared ownership scheme helps those unable to borrow enough to buy a home outright, to buy a share in a home instead. This can be as little as 10% to as much as 75% of the home initially.

Ownership is increased through a process known as staircasing, which allows you to buy more of the property in chunks as small as 1% extra at a time. Some terms restrict you from owning the property 100%, so it’s best to seek advice from a qualified broker if this is your aim.

First homes scheme

The first homes scheme was introduced in 2022 and provides first-time buyers with the opportunity to buy a home at a significant discount on the market value (30-50%).

All first time home buyers with a household income below £80,000 (£90,000 in Greater London) are eligible. Key workers and those with personal links to the geographical area of homes within the scheme will be prioritised. 

The home will need to have been purpose built for the scheme, and the idea is that it is only sold on to other people eligible for the scheme, keeping a pool of affordable homes available to first-time buyers indefinitely.

Right to Buy/Right to Acquire

Right to Buy

The Right to Buy scheme offers council tenants in England a significant discount to help them buy their rented home. The level of discount is based on the current market value of your home, minus 35-70%, depending on how long you’ve been a tenant.

Right to Acquire

The right to acquire scheme is similar to the Right to Buy, however, it’s exclusively for housing association tenants in England. The discount offered in this case is set at between £9,000 - £16,000, depending on the value of your rented home. 

Deposit unlock scheme

The Home Builders Federation introduced the first non-government led home ownership scheme in 2022, which is known as the Deposit Unlock scheme.

This provides the opportunity for anyone (not necessarily a first-time buyer) to purchase a new build home with just a 5% deposit. To date, a number of home building companies are participating in the scheme, and a handful of lenders have signed up to it.

Help to Buy

The Help to Buy mortgages scheme is no longer open for residents in England, Scotland and Northern Ireland. However the scheme is still available in Wales, and you can find further details here.

Low income mortgage FAQs

What is considered ‘low income’ in the UK?

Low income is a relative term, so perhaps you’re wondering whether you are on a low income or not. As it’s possible to get a mortgage with a low-income, labelling yourself is not necessary. But according to the GOV.UK, houses in the UK on low income live on less than 60% of the median income.

What is the minimum income I need for a mortgage?

It depends on how much you need to borrow. The minimum amount of income will need to be enough to be able to afford the loan repayments, no matter how much you borrow.  

Is there a minimum salary for a mortgage?

Some lenders have a minimum income requirement, which tends to be around £20-£25k, however, the majority of lenders are more concerned with whether you can afford the loan than the size of your salary.

Can I get a mortgage without a job?

Yes, if you’re able to comfortably afford loan repayments with income from other sources, then most lenders will consider your application, depending on your individual circumstances.

That said, the majority of lenders will prefer that you are working if you can, unless you have very substantial savings or assets.

Can I afford a mortgage on a low income?

Lenders will only ever offer a mortgage that they believe you can afford, and this will be considered and discussed with you as part of their affordability checks.

Will my credit record matter if I am trying to get a low-income mortgage?

A good credit record will always improve your chances of being offered a mortgage, and this is even more relevant if you’re on a low income. 

There are specialist bad credit lenders that are able to help people that have had certain credit issues in the past, such as CCJs and even IVAs in some circumstances. However, you will typically need to see a broker to access this type of lender. Lenders also charge higher interest rates in these circumstances.

Can I get a buy-to-let mortgage on a low income?

Yes, in fact, your income is of less relevance with buy-to-let mortgages than it would be if you were buying a standard residential home. This is because how much you can borrow is based largely on how much the rental property will earn. 

Many lenders do not have a minimum income requirement and borrowing is not typically calculated using your income, although some will prefer that you do have some form of income as a backup. 

Can I get a mortgage with a low income and bad credit?

It will be more difficult to get a mortgage in these circumstances, but not necessarily impossible. There are bad credit lenders that will look at all sorts of circumstances, but it’s best to speak to a mortgage broker with plenty of experience in this area in order to achieve the best outcome.

About the author

Atousa Cunnell
Atousa is a Content Producer for money.co.uk, responsible for writing and editing a wide range of mortgage content that are helpful to the reader.

money.co.uk is not a mortgage intermediary and makes introductions to Mojo Mortgages to provide mortgage solutions.

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