Mortgages for Carers on Carers Allowance and Part-Time Income

This guide explains how people on Carers Allowance and part-time income can approach applying for a mortgage. It breaks down what lenders look at, how income is assessed, and practical steps to improve your chances of being accepted.

Who Is This Guide For?

This is for people who care for someone and receive Carers Allowance, and who also earn part-time income — and are looking to understand how that affects mortgage eligibility. The intent here is informational with elements of transactional guidance on preparing to apply.

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How Do Lenders Treat Carers Allowance?

Short Answer

Most lenders do not count Carers Allowance as eligible income for mortgage affordability calculations because it is a means-tested benefit.

Lenders assess income to make sure you can afford monthly repayments now and in future. Regular benefits like Carers Allowance are generally excluded because they are not guaranteed long-term and can be withdrawn if your circumstances change. This means your mortgage application will be assessed mainly on your part-time earned income and any other eligible income sources.

Note: There are very limited specialist lenders who may consider some benefits under specific criteria — usually only if you have a strong overall affordability position.

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What Counts as Eligible Income?

Short Answer

For most lenders, paid earned income from employment or self-employment is preferred. This includes part-time wages or salary and documented earnings.

Here’s how different income types are generally treated:

• Part-Time Income: Counted if regular and documented (payslips, contracts).
• Carers Allowance: Usually not counted.
• Other Benefits: Most means-tested benefits are excluded; non-means-tested benefits (e.g., disability benefits) may sometimes be considered by specialist lenders.
• Overtime/Bonuses: Can be considered if consistent in history and likely to continue.
• Self-Employment: Income must be evidenced with accounts and tax returns.

Lenders will request:

• 3–6 months of payslips
• Up-to-date employment contract
• Bank statements showing income received

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How Lenders Assess Part-Time Income

Short Answer

Lenders typically annualise part-time income — meaning they take your hourly wage or monthly pay and multiply it to see what you earn over a year.

For example:

• If you earn £12,000 per year from part-time work, lenders will use that figure in affordability checks.

Important factors:

• Contract hours: Fixed hours are easier to assess than zero-hour contracts.
• Consistency: Longer history of part-time earnings strengthens the case.
• Future work pattern: Lenders want assurance hours are likely to continue.

If your part-time income fluctuates, you may need:

• A letter from your employer confirming expected hours
• Evidence of regular past earnings

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Can Benefits Ever Count Towards a Mortgage Application?

Short Answer

In most cases Carers Allowance and similar means-tested benefits do not count for affordability — but there are exceptions in specialist lending.

Some specialist or adverse-credit lenders may consider benefits differently, especially:

• If combined with stable earned income and strong affordability
• For smaller mortgage amounts relative to your income

This is not standard offering at high-street lenders. Speaking with a regulated adviser who understands specialist products can help identify lenders open to considering mixed income sources.

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Affordability: What Lenders Look At

Short Answer

Lenders test whether you can afford the mortgage repayments by comparing your income against your outgoings and regular commitments.

Key affordability factors:

• Your gross income (what you earn before tax)
• Monthly outgoings: bills, rent, existing debts
• Credit history: missed payments, defaults
• Deposit size: larger deposits improve affordability chances
• Interest rates: lenders stress-test your ability to pay if rates rise

Importantly, lenders use a stress-test rate — typically higher than today’s rates — to make sure you can still afford payments if rates increase.

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What Happens if You Have Limited Income?

Short Answer

If your part-time income is low, lenders may either decline your application or offer a smaller mortgage. There are ways to improve your position.

Practical Strategies to Boost Eligibility

1. Increase Your Deposit
A larger deposit reduces the loan-to-value (LTV) ratio. Lower LTV often means:

• More lenders available
• Better interest rates

2. Improve Income Evidence
Providing clear documentation of:

• Contracted hours
• Payslips and P60s
• Employer confirmation

This helps lenders see the stability of your part-time income.

3. Reduce Outgoings
Paying off debts or reducing credit commitments strengthens affordability, making your application more attractive.

4. Add a Co-Applicant
Applying with a partner or family member with steady income can improve affordability.

5. Consider Specialist Lenders
Some lenders specialise in:

• Part-time income criteria
• Non-standard income profiles

A regulated adviser can point you towards these options.

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Joint Applications and Shared Ownership

Short Answer

Applying jointly with someone else (partner, family member) can increase overall income, improving affordability.

Shared Ownership
This is a scheme where you buy a share of a property and pay rent on the rest. Lenders often have different income requirements for Shared Ownership, and part-time income may be more acceptable in this context.

If you’re looking at Shared Ownership:

• Ensure you understand rent + mortgage costs
• Get eligibility checked early

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How Credit History Affects Your Application

Short Answer

Your credit history plays a significant role. Even if income is sufficient, lenders will look at:

• Missed payments
• Defaults
• County court judgments
• Credit utilisation

Improving credit score before applying can strengthen your overall application.

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Steps Before Applying for a Mortgage

Short Work Plan

1. Check Your Credit Report
   • Review and correct inaccuracies
   • Pay down debt where possible
2. Gather Income Evidence
   • Contracts
   • Payslips
   • Bank statements
3. Calculate Your Budget
   • Include all costs: deposit, fees, solicitor costs
4. Speak to a Regulated Mortgage Adviser
   • Especially one experienced in specialist cases
   • They can identify lenders open to part-time incomes

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What If You’re Self-Employed and Caring?

Short Answer

Self-employed carers must provide:

• Tax returns
• Account figures
• A history of consistent earnings

This can be more complex than employed income — but many lenders accept self-employment if backed by proper documentation.

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Can You Improve Your Chances Over Time?

Short Answer

Yes. The following actions can strengthen future applications:

• Increase your deposit
• Build longer employment history
• Improve credit score
• Consolidate debts
• Provide clear written explanations of income sources

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Summary

• Carers Allowance is generally not counted by mainstream lenders for affordability.
• Part-time income can be counted if it’s regular and evidenced.
• A regulation stress test ensures you can afford repayments even after rate rises.
• Specialist lenders may offer more flexibility — especially with strong part-time income and a bigger deposit.
• Working with a regulated mortgage adviser improves your chances of finding a suitable lender.

If you’d like regulated advice tailored to your personal situation, speaking with a qualified mortgage adviser can help clarify your next steps.