Santander makes change to mortgage rules to help people on Universal Credit

By Staff

Universal Credit will count as secondary income when it comes to affordability if you’re applying for a Santander mortgage – but you will still need a primary income

Santander is now accepting Universal Credit payments as income for mortgage applications.

The change means more people who claim benefits will be able to boost their affordability to get on the property ladder. But benefit claimants will still need to have a main source of income, such as from employment or self-employment, to apply for a mortgage.

Universal Credit will count as secondary income when it comes to their affordability. You will also need to have been claiming Universal Credit for six months before you can apply for a mortgage with Santander. The lender will also ask for a breakdown of any deductions you may have had.

Santander will calculate affordability using an average of the last six months of Universal Credit payments, but not including the latest month’s housing benefit. You won’t be able to use bank statements as proof of Universal Credit awards.

HSBC, Lloyds Banking Group, Natwest, Barclays and Nationwide all consider mortgage applications that include Universal Credit as income. The news comes as Santander launched a new £185 switch offer for new and existing customers.

To be eligible for the switch money, you need to switch your existing current account to either an Everyday Current Account, Santander Edge Current Account, Santander Edge Up Current Account, or Private Current Account v2. You’ll need to complete the full switch, pay in at least £1,500 and set up two active direct debits within 60 days.

The £185 will be paid within 90 days once you have met the above criteria. New customers can switch online through the Santander website, over phone, or in branch, but existing Santander customers must visit a branch. Customers who have previously had a Santander switch bonus are not eligible for this latest offer.

Martin Lewis ‘ said its “top pick” of the Santander accounts is the Santander Edge as you can get 1% cashback, capped at £10 a month, on energy, council tax, broadband, TV, mobile and water bills, and 1% on supermarket, fuel and train spending, again capped at £10 a month. But do keep in mind this account comes with a £3 monthly fee. You also get access to a linked saver that pays 4% on up to £4,000 for the first year.

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