When you’re looking to take out a mortgage, expenses such as private school fees, nursery fees, or other childcare costs can significantly impact how much you can borrow. If you’re a parent juggling the costs of childcare, it’s important to understand how these expenses factor into your mortgage affordability.
How Much Will Nursery or Childcare Costs Reduce What I Can Borrow?
Childcare costs, such as nursery fees, will be considered by most mortgage lenders when calculating how much you can afford to borrow. This is because these fees reduce your disposable income, which in turn lowers the amount you’re likely to be able to borrow. Different lenders assess childcare expenses in slightly different ways, but they all take them into account when determining affordability.
I Get Government-Funded Childcare – Will This Impact My Mortgage?
If you receive government-funded childcare, it can still impact your mortgage options. Whether this helps or hinders your affordability will depend on when and how the funding is applied. For example, if you’re currently paying out of pocket but will soon receive government funding, lenders may consider this future change in your financial situation. It would be a good idea to run this one past an experienced mortgage broker; you can get started with our team here.
Can I Pay for Childcare Upfront to Borrow More on a Mortgage?
While it may seem like paying for childcare in one lump sum could free up more borrowing potential, lenders are cautious about affordability. Whether you pay for childcare upfront or in instalments, lenders may still factor these costs into their calculations to ensure you can afford your mortgage in the long term.
Can I Use Child Benefit Income for a Mortgage?
Child benefit income is typically considered by some lenders, but it won’t offset your childcare costs. While this additional income can be helpful and support affordability, childcare fees are still factored into lenders’ calculations as they will look at your overall financial commitments.
My Childcare Costs Will Stop Soon – Do I Need to Declare This for a Mortgage?
Yes, it’s always advised to declare everything, including when your childcare costs are due to stop. If your childcare fees will end shortly after you take out the mortgage, some lenders may be able to disregard these costs when assessing your affordability. However, this varies from lender to lender, and it’s best to be upfront about your situation so your mortgage broker can find the best deal for you.
Do Private School Fees Need to Be Considered?
Yes, private school fees, just like nursery and other childcare costs, need to be factored into your mortgage affordability and application. Whether you’re paying for private tuition or after-school clubs, these expenses will impact how much a lender will allow you to borrow.
How Can I Understand the Impact of Childcare Costs on My Mortgage Application?
The best way to understand how your childcare and education costs will affect your specific mortgage application is to speak to a professional mortgage broker. At The Mortgage Pod, our friendly team have over 35 years of combined industry experience, and we will support and guide you based on your individual circumstances.
Get started with our team at The Mortgage Pod – we’re here to make the process as smooth as possible.
FAQs
Do private school fees, nursery or other child-care related costs needs to be considered for mortgage affordability?
Yes. These costs will always need to be declared and considered. These may impact what you can borrow on a mortgage, depending on your income and other factors.
Can I get a mortgage if we pay for private school or nursery?
Yes, having these expenses won’t be a reason to stop you getting a mortgage. These costs will just need to be considered into your affordability purposes, however.
Can The Mortgage Pod help me understand how school or child care fees will impact my mortgage options?
Yes, absolutely we can. If you are ready to contact our friendly team, we suggest you Get Started HERE.
