Making the decision to buy a house and apply for a mortgage is never something to be taken lightly. Choosing to take out a mortgage is a huge financial commitment that you need to make fully sure you are  ready for.

This decision can be made a little more difficult – or even taken out of your hands completely – if you are in receipt of Universal Credit. However, it is still possible to take out a mortgage if you are on Universal Credit as other factors influence lenders’ decisions about providing mortgages.

Find out all you need to know about getting a mortgage if you are on Universal Credit with our Octagon Capital guide:


How To Get a Mortgage on Universal Credit

While it can be significantly more difficult to get a mortgage if you are on Universal Credit, it is not impossible. Not all lenders accept benefits towards an income, so it’s important to find one that does. Once you have found a suitable lender who accepts Universal Credit towards your income, they will need to conduct various checks to make sure you are suitable for a mortgage product.

Lenders will assess your income amount and type – as they do with anyone applying for a mortgage – as well as your dependency on your Universal Credit payments. They are also likely to take into consideration if you are in receipt of any other types of benefits.

As with any loan products, it’s absolutely essential to only ever borrow what you know you can afford to pay back – the same applies to mortgages.



What Checks Will a Lender Conduct?

When attempting to ascertain whether or not you are a suitable candidate for a mortgage, the lender will assess your application against a number of criteria. They will be looking to see whether or not you will be able to repay the mortgage on time. This will include checking your income to see what it consists of, how reliable your income is, and how dependent you are on any benefits you may be in receipt of.

  • Your Income & Assets – Lenders will assess what your monthly income is, and what it is made up of. They will also be interested in any other assets you have. Here, additional income sources aside from Universal Credit and other assets will support your mortgage application.
  • How Much of a Deposit You Have – Your deposit amount can be the difference between a lender accepting your application or not. Smaller deposits such as 5% or 10% may prove difficult to sway a lender, but higher amounts such as 20% and beyond will work in your favour.
  • Which Type of Mortgage You Are Applying For – Certain types of mortgage may be easier to secure on Universal Credit. Some mortgages like Buy to Let don’t usually have minimum income requirements.
  • How Dependent You Are on Universal Credit – Lenders will be interested in whether or not you are totally dependent on your Universal Credit payments to get by. If you aren’t 100% dependent on them, and you have other sources of income, your chances of being approved for a mortgage will be higher.
  • If You Receive Any Other Benefits – Lenders will also want to know whether or not you are receiving any other benefits as well as Universal Credit. If you are receiving other benefits and you choose a lender that accepts benefits as a form of income, this can benefit your application.


While it is likely to be more difficult to take out a mortgage if you are on Universal Credit, it is certainly possible. To better your chances of being approved for a mortgage, opt for a lender who accepts benefits as a form of income.

You should only ever take out a mortgage – or any type of loan – if you are sure you will be able to meet the scheduled repayments. Defaulting on payments can damage your credit score and leave you in greater financial difficulty.