Virgin Money makes huge change to mortgages - and it could mean you can borrow more
Share:
Virgin Money has increased the number of different types of benefits it will accept for mortgage applications. It means more people can count their benefit income as part of their affordability when applying for a mortgage, giving them the potential to borrow more. In order to include Universal Credit, at least one applicant must have a separate income and any Housing Benefit shown on your Universal Credit award letter should be deducted from the income.
If you claim Child Benefit, you can only include it in your mortgage application if both your income is below £60,000 a year. Virgin Money now accepts the following types of benefits:. Santander confirmed it will include Universal Credit payments for mortgage affordability in March last year - but again, benefit claimants will still need to have a main source of income. You also need to have been claiming Universal Credit for six months before you can apply for a mortgage with Santander, and the lender asks for a breakdown of any deductions you may have had.
HSBC, Lloyds Banking Group, Natwest, Barclays and Nationwide all consider mortgage applications that include Universal Credit as income. It comes after financial comparison website Moneyfacts revealed the rate gap between the average two- and five-year fixed rate mortgage has fallen to its lowest margin in two years.
The average five-year fixed rate was 5.55% at the start of January but this is now 0.30% lower at 5.25%. The average two-year fixed rate has dropped by 0.45% over the same period, down from 5.93% to 5.48%. The number of mortgages available rose month-on-month, to 6,508 options.
