Can I Get a Mortgage With Low Income?

Getting a mortgage can be daunting, especially if you have a low income or complex earnings. Lenders look at many things when checking your mortgage application, including verifying your income. They want to ensure that you can afford the monthly repayments without struggling. 

In this guide, you’ll find all the information necessary to give yourself the best chance of securing the mortgage you need with a low income.

Can I get a mortgage on low income?

Yes, it's possible to get a mortgage even if you have a low income. It may be harder, but not impossible. Lenders all have their own criteria for lending. The type of mortgage you're getting and how much you want to borrow will also determine whether you get accepted. 

Lenders will carry out an affordability check to see if you can manage the repayments without getting into financial difficulty. They won't want to risk missed payments - or worse, repossession.

As part of your mortgage application, they’ll examine your total budget and the size of the mortgage you want, to check if you can cover:

• The mortgage repayments

• Your household bills

• Any other living costs

They’ll also factor in how you'd manage if your circumstances changed or if interest rates were to rise.

You may be worried about passing a mortgage lender's affordability checks. Some big banks and high street lenders might turn you down if you have a low or complex income. In this case, you'll need a mortgage broker who knows the market and which lenders will be most likely to accept you.

Our Mortgage Experts will help you prepare your application. If you need a mortgage but are worried about getting accepted with a low income, make an enquiry.

What counts towards income on a mortgage application?

Your earnings are the most important requirement when it comes to your mortgage application. Some lenders will look at a variety of income sources such as child support, or disability benefit. If you’re a contractor or freelancer, some lenders might also be willing to consider your savings if you have enough money in the bank.

Each mortgage lender is different. That's why it's a good idea to work with a specialist mortgage broker. Our Mortgage Experts know the market, know how to make your application look good, and know which lenders are most likely to accept you. Find out all your options by making an enquiry.

What documents do I need to prove my income?

As part of your mortgage application paperwork, you’ll need to provide a range of documentation as evidence of your earnings. These include:

• Physical bank statements - usually from the last three months

• Payslips - usually three months, but it varies from lender to lender

• SA302 tax statement - usually two or three years' worth (if you're self employed)

• P60 - if you get bonuses alongside your income

• Utility bills - dated within the last three months and must show your name and current address

• Council tax bill - the most recent one

It might take a while to collate everything you need, so it’s good to make a start as soon as you can. 

How do mortgage underwriters verify my income?

When you apply for a mortgage, you'll need to prove you earn what you say you do. Lenders will then work out what kind of mortgage you can afford. Different lenders have different criteria for approving you, but they'll usually assess the following: 

• Income – your regular cash flow

• Credit Report – they’ll prefer a positive credit history

• Assets – anything that could offer financial stability

• Deposit – how much you've been able to save

What do I need to provide a mortgage lender if I’m self-employed?

If you're self-employed, you'll need to provide the following on your mortgage application:  

• A SA302 statement or tax year overview (a summary of your reported income, provided by HMRC after you've submitted your tax return - find out how to get it)

• Two to three years certified accounts (preferably by an accredited accountant)

• An accountant’s reference

• Evidence of annual salary and dividends paid (if a Company Director)

• Accounts showing retained profits (if a Company Director and applying using this as basis for income)

Limited company directors are classed as self-employed in the eyes of a mortgage lender. Same goes if you’re employed in a Construction Industry Scheme (CIS) job role.

Do mortgage lenders contact my employer?

Each lender is different, but most will want to check your employment. Submitting your payslips is usually enough proof, but some lenders may call your workplace to check the salary information you've given is correct. This doesn't happen often - usually only when they need to clarify something in your application.

Do mortgage lenders contact HMRC?

Yes, some lenders will contact HMRC using the Mortgage Verification Scheme. The scheme was created to tackle mortgage fraud, and lets lenders get in touch to check the numbers on your mortgage application match HMRC records.

Should I lie about my income on a mortgage application?

Absolutely not. It’s never a good idea to lie on any type of loan application, including for a mortgage. Providing fake documents or trying to cover up aspects of your financial history can be seen as mortgage fraud. This is a serious matter which could mean losing your home, facing a hefty fine, or even prison time. It's just not worth it.

How can I improve my chances of getting a mortgage on a low income?

Getting a mortgage when you have low income can be a challenge, but it’s not impossible. There are some steps you can take to give yourself the best possible chance of being accepted.

1. Check your credit score
   Along with your income, lenders will be looking at your credit score. Lenders use this score to see how you’ve managed your finances over the last six years. If your income is low but you have a good credit rating then this will work in your favour. Check it regularly (we recommend Checkmyfile**) and do all you can to keep the number high and your record looking good. Get simple credit tips in our Guide: How to Improve Your Credit Score. 

2. Get to grips with your income
   Compared to someone with a salary or fixed income, the amount you’ll be able to borrow can be tricky to calculate. Lenders try to tackle this by looking at your annual income from the last three years and will take an average or lowest figure to work out how much you’ll be able to pay back. Start going through your accounts to get an idea of numbers. You can then use a Mortgage Calculator to see how much you could potentially borrow. 

3. Choose the best time
   Timing is everything. If you can, it’s best to wait until your income is more stable (for example if you’re working on a long-term project) before submitting your application. You want to look as good as possible to potential lenders.

4. Show off your work
   If you’re a self-employed freelancer or contractor, having repeat customers or long-term contracts will prove a certain level of stability. Showing potential lenders your track record and earning potential will make you more appealing as a mortgage applicant.

5. Put down a bigger deposit
   If you’re a first-time buyer, putting down more money upfront will offset the risk for potential mortgage lenders. It also shows you’re a good saver, and will open you up to more competitive deals. 

6. Work with a mortgage broker
   The mortgage market is big. It can be especially overwhelming if you’re worried about low income. An experienced mortgage broker (like us!) understands the market, will know which lenders are most likely to accept you, and will be able to make your application look as strong as possible.

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What help is available to would-be homeowners with low income?

If you’re ready to be a homeowner but are concerned about low income, there are a number of government schemes available to help you buy a property.

• Right to Buy. The Right to Buy scheme allows council tenants in England to buy their council home. If you qualify for Right to Buy, you'll be able to buy your home at a discount. Most mortgage lenders will then accept your discount as a deposit.

• Shared Ownership. The shared ownership scheme allows you to buy part of a property from a council or housing association, and rent the rest. You take out a mortgage on the part you're buying, then pay a reduced rent on the part you don't own. You can buy some or all of the remaining property share later on. Specific shared ownership schemes are also available for people with disabilities and older people.

• Mortgage Guarantee Scheme. The 5% mortgage scheme - also known as the Mortgage Guarantee Scheme - is a government-backed scheme, available until 30 June 2025, allowing first time buyers, home movers and previous homeowners to get a 95% loan-to-value mortgage. 

• Guarantor mortgages. A guarantor mortgage is where someone else agrees to pay for your mortgage if you can’t. You might need a guarantor mortgage if you’re on low income, have a bad credit history, or can’t save a lot of money for a deposit. It’s not a joint mortgage - your guarantor won’t own any portion of your home, they’re just agreeing to pay if you can’t. Their name will be on the legal documents but they won’t have any stake in the property. A mortgage lender will need to secure your mortgage against your guarantor’s home or their savings.

• Joint borrowing. A Joint Borrow Sole Proprietor (JBSP) mortgage is a specific home loan you can take out with your parents or family member. You’re all responsible for paying the mortgage, but you’ll be the sole owner of the property. JBSPs are flexible mortgages, so you can reduce the amount your family needs to pay over time if you want to make the bulk of the payments.