NatWest changes mortgage policy and starts taking actual childcare costs into consideration

by Aaron Strutt

Sep 02 2018

NatWest has started taking the actual amount parents pay for childcare costs into account for their mortgage affordability calculations.

The bank previously offered one of the most generous policies across the mortgage market by using average childcare cost data specified by the Office for National Statistics to generate figures for childcare and nursery fees.

NatWest now ask customers to declare the type of childcare they use, how often and how much they spend. The move will capture a true reflection of the customer’s financial circumstances and expenditure.

The lender will not ask for any formal evidence of payments for childcare costs, however, if there is a difference between the amount provided and transactions shown or bank statement or via one of the reference agencies the lender will want to know why. 

Aaron Strutt product director at Trinity Financial, says: “This is not particularly good news for borrowers struggling to get a large enough mortgage because of their childcare costs, but it is not a surprising move as the bank's policy was very different from its competitors.

“Moving forward NatWest will ask borrowers to declare the maximum amount their childcare costs will be over the next five years. However, if your childcare costs are stopping within the next six months they do not need to be declared on the application.”

Call Trinity Financial on 020 7016 0790 to secure a maternity leave or more generous childcare fees mortgage