NatWest ignoring childcare costs and nursery fees for mortgage affordability

by Aaron Strutt

Oct 20 2016

Trinity Financial has access to a bank that does not reduce the maximum mortgage loan size for childcare costs or nursery fees.

NatWest for Intermediaries treats childcare costs as “lifestyle expenses” and uses data build into its affordability calculator from the Office for National Statistics (ONS).

If your child is of pre-state school age, the bank will lend up to 4.85 times single and joint salaries for mortgages below £500,000. Where the loan amount is more than £500,000, the maximum loan is capped at four times salary, and the term cannot exceed 30 years.

Aaron Strutt, product director at Trinity Financial, says: “The vast majority of mortgage lenders use affordability calculators to work out the maximum loan size and the have wildly different acceptance criteria. These lenders also reduce the size of the mortgage if the client has regular payments coming from their bank account or credit commitments.

NatWest is one of the most generous lenders, especially as it does not reduce the mortgage size for clients making pension payments, season ticket loan repayments or other salary sacrifice items showing on their payslips. Also, if you are on maternity leave, the bank should be able to take your return to work income into consideration.

The bank uses ONS data to ensure mortgages are affordability and clients will need a clear credit score to qualify.  

Even though NatWest has a generous affordability policy, it is worth noting that a couple with family commitments are still unlikely to be able to borrow as much as a couple who earn the same amount, but who do not have children.

To secure a larger childcare or salary sacrifice mortgage, call Trinity Financial on 020 7016 0790.