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Will your child maintenance be taken into account when you are applying for a mortgage?

In January 2016 the Ipswich Building Society announced that they would consider 100% of income from child maintenance when assessing mortgage affordability.  They join a list of other mortgage lenders, including NatWest and Virgin Money.  However, there are some other banks and building societies that will not take child maintenance into account, or only take a certain proportion of that income into account.

 

This new approach by Ipswich Building Society will make it easier for separated parents to obtain a mortgage but the child maintenance does need to be supported by the Child Maintenance Service (the successor of the Child Support Agency) or a court order, and would need to have at least five years left to run.  This may cause a problem where parents have agreed an informal arrangement, which is something they are encouraged to do by the government.

 

Coventry Building Society and Post Office do not take any child maintenance payments into account when assessing affordability, with Lloyds Banking Group and Yorkshire Building Society considering only a proportion of that income to be relevant.

 

Santander, Tesco Bank and Barclays will take the income into account whether or not it is supported by a court order or the Child Maintenance Service so long as they can establish that the payments are being made regularly.  Whether all mortgage lending institutions will follow this lead is yet to be seen, but an approach which does not take this income into account is likely to be increasingly hard to justify in a society where it is not unusual for parents to be separated.

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