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Original poster

Maternity leave and mortgage application

31 replies

brettgirl2 · 11/06/2009 14:32

My DH met with mortgage adviser this morning and apparently because I am on maternity leave my salary (which is higher than his) can't be taken into account?

As it happens we will be able to get just about enough on his salary alone as we are not overmortgaging ourselves but it would have been nice to have some leeway.

Is this normal? It seems ridiculous to me - if I gave notice to my employer today then I could go back before we get to completion!

OP posts:
curlygal · 11/06/2009 18:45

That seems v odd to me as you are still employed while on maternity leave.

Surely the period you are on maternity leave for is a very short period of the mortgage you are applying for? eg you are on mat leave for 6 months out of 25 year.

I've never made an application while on mat leave but personally I'd have thought that both salaries would be considered.

Glad you got enough though

LIZS · 11/06/2009 18:52

I suppose their argument is that there is no guarnatee you will earn that again so it is a risk. Another lender might include it, worth shopping around

Original poster
brettgirl2 · 11/06/2009 19:06

I'm glad it isn't just me who is a bit about this.

There is no guarantee with anyone really - my DH could decide to quit his job just like me. As long as we can afford the repayments until I go back I don't see why it should be a problem.

Unfortunately we can't really shop around because we are allowed to extend a .5% interest deal, so it would cost us rather a lot!

I think I'm partly annoyed because it seems quite discriminatory. I've worked out the sums again and it should just about work luckily. I'm also quite to be honest that they'll lend my DH that much on his own!

OP posts:
Boysboysboys · 11/06/2009 19:07

We got a mortgage when I was on maternity leave. They just asked for a letter saying I was planning to return. This was a couple of years ago though (before the credit crunch) and we were with nationwide.

Original poster
brettgirl2 · 11/06/2009 19:16

Well despite the credit crunch they said DH could have 5 times his salary. How on earth he would make the repayments, pay the bills and eat anything apart from value bread and beans when we come off the .5% deal is a mystery to me..... Isn't that what got us into this in the first place . (Although we have a big deposit so they wouldn't really care I suppose)

It's Barclays - I am tempted to query whether this really is policy.

OP posts:
curlygal · 11/06/2009 19:25

I'm single and I have a mortage of over five times my salary (actually well over as am part time now)

They did it on what they called an affordabilty basis - ie what could I afford to pay each month and I can just afford it.

I think if you have a good credit histry and aa big deposit they will be quite generous.

I try not to think about it as it is so scary but needed somewhere for me and DS to ilive so just did it.

kd73 · 11/06/2009 19:37

Hi Bretgirl, we are in a similar situation. I am on maternity leave and looking for a mortgage but First Direct with whom I've banked for 15+yrs would only offer us x3.5 partners salary only.

callalilies · 11/06/2009 19:43

I suppose they're taking the view that a reasonably high proportion of women on maternity leave will either leave altogether or will return on a reduced salary of some kind because of part time working, therefore they are not prepared to offer a mortgage on the basis of a full time salary.

Yes your DH could resign as well, but statistically the chances of that compared to the chances of you as a woman on mat leave either not going back or reducing your salary aren't nearly as great.

I wonder what the statistics are for that? I mean how many women who go on maternity leave do return full time on the same salary as before. Would be interesting to know. Anecdotally I can't think of anyone I know personally off the top of my head who didn't make some sort of change.

Original poster
brettgirl2 · 11/06/2009 19:45

KD the more I think about it the more I think it is really discriminatory. What will come next - will they refuse to give mortgages at all to women of childbearing age?

OP posts:
Original poster
brettgirl2 · 11/06/2009 19:47

I am intending to go back full time, if anything it may be DH who goes part time as his salary is lower than mine.

OP posts:
naraloo · 23/06/2009 18:35

I am having the exact same situation with First Direct. My full-time salary is 3x DH's and they won't even consider including any portion of my salary - even though the existing mortgage is in my sole name.

Anyone had any luck with other lenders?

HerHonesty · 23/06/2009 18:52

i know of someone who got a letter from employer confirming return to work date and salary on retunr which helped.

BigGitDad · 23/06/2009 22:39

Some lenders are more flexible than others. Usually a letter will suffice. That said there is no guarantee that a mum will go back to work after maternity leave. That said, anyone can quit their job at any time anyway, so what is the difference really?

naraloo · 13/07/2009 14:39

Update - First Direct are still refusing to consider my application. I spoke to the Equality and Human Rights Commission (previously equal opportunities commission) and they advised that this is direct sex discrimination in the provision of goods and services.

However, they don't have any case law of anyone successfully bringing this to court. They advised to send a SD74 questionnaire which they must legally respond to stating why in their view this is not discrimination.

Further problems though that Woolwich and Abbey are now also refusing to consider full time salary.

Original poster
brettgirl2 · 14/07/2009 19:16

It's ridiculous isn't it?

I also suspected it was in breach of sex discrimination act. Have you got a link to the questionnaire and I'll also follow it through at least that far with Barclays?

Maybe we should take it on properly nara, it's the principle of the thing as well as individual.

However, I did go in for financial verification when putting in offer for house and financial adviser there did seem interested in my salary. So presumably as biggit says some are more flexible.

OP posts:
naraloo · 15/07/2009 00:58

Here is the link to the questionnaire. I will definitely take it to this stage but want to get the mortgage sorted out and my accounts moved so there can be no come back before I do. Apparently you have upto 6 months to bring a case.

www.equalityhumanrights.com/uploaded_files/sd74_questionnaire.doc

Their helpline was also (funnily enough!) helpful on 0845 604 6610 and they gave some numbers for free legal advice.

I am going also to pursue it through the banking ombudsman as they specifically state that you can't be refused a mortgage because you are pregnant - surely maternity leave is the logical conclusion, so why should that be any different.

Absolutely right though, it is the principle of the thing. Banks using the credit crunch as an excuse to go back to discriminatory practices.

mummysleepy · 14/08/2009 20:34

anyone had any update on this yet? I have just encountered same problem (trying to remortgate as current deal ending) even though I don't start mat leave till next week my salary doesn't count! firstdirect again.
I am fuming as this is clearly discrimination and could end up costing us a lot of money as we won't be able to get the best deal
just wondering if they have responded further I am certainly planning to take it further if they continue to refuse on the basis that I am pregnant

Umlellala · 14/08/2009 20:40

Worth trying a broker IMO - London & Country free and very good.

I spoke to a broker who agreed it was sex discrimination too. Mine was worked out on my last 3 year's accounts...

naraloo · 15/08/2009 15:18

Agreed - London and Country got me a deal with Alliance and Leicester.

Sent the sex discrimination questionnaire to First Direct who refused to complete it as "there is no obligation". I am going to escalate the complaint to the Financial Services Ombudsman.

I have found on their website that it is discrimination to refuse a mortgage because of pregnancy - link here www.financial-ombudsman.org.uk/publications/ombudsman-news/37/banking-equal-access.htm

I also tried to contact a few legal aid solicitors but it seems they do not take "consumer" cases and will only pursue discrimination in employment.

naraloo · 02/11/2009 17:33

Update on this case to the financial ombudsman - it is now going to adjudication so they have not rejected it out of hand. Also spoke to the FinanciaL Services Authority who requested me to submit evidence so that they can enforce the banks to change their policies. If anyone else is interested in pursuing this as well, I am happy to give you the contacts.

sausagerolemodel · 10/03/2010 16:40

Is there any further news on this case - its really interesting and well done for chasing it through.

ArcticFox · 11/03/2010 09:32

Surely sexual discrimination in the provision of goods and services would only be the case if the bank refused to take a woman's salary on equal footing to a man's. ie. if the bank took into account the salary of a man who was on a career break.

In this case the bank is taking a view, based on the fact that many women do not return after maternity leave which would leave the borrower on a very high multiple based on one salary. All banks are being more cautious now as they need to build lower risk loan books. The bank therefore has a valid reason (risk factor) for it's decision.

The fact that a case has not been won on this is critical.Until a law has been tested and upheld, it's not really the law(look at fox hunting- what a great use of parliamentary time that one was).

Also, bear in mind that if banks were forced to take salaries of women on mat leave into account, either 1. they will do but that borrower will pay a higher rate to reflect risk of default, or 2. if this were not allowed, then the costs of borrowing goes up for everyone.

Backinthebox · 19/01/2011 08:03

Bringing this post back up to the top - did anyone get anywhere with this? I'm trying to extend my mortgage. All approved taking into consideration my normal salary, and then refused when the bank found I was on maternity leave. They got themselves in a bit of a pickle about it as OH discussed Life Assurance with them, and they had me down as a housewife for the mortgage and then realised that my normal job (which I will be returning too) has a risk category all of it's own for Life Assurance.

Katjunior79 · 31/01/2011 21:45

Hi,
Backinthebox, I am also curious as to whether anyone got anywhere with this.
I am currently on mat leave and unfortunately separating from my husband. Im trying to get a mortgage but despite my FA stating that lenders couldn't have it both ways, they seem to be doing so! I was told they would either have to consider my salary I left on or my new pt one. They wont look at either until Im back at work, so Im in limbo!
I feel this is pure discrimination. I understand the 'risk' factor and that lenders are more wary now of preventing people get into something they cannot afford, but anyone could lose a job at any time, why are pregnant women and new mums penalised in this way??

bluepanda · 01/02/2011 18:00

Shop around if you can - we go a mortgage in August/ September with Coventry Building Society while I was on mat leave - not a problem at all - they just asked for a letter from employers stating my intended return to work date and salary. As others have said, this was obviously no guarantee I would go back - but anyone could be made redundant at any time so what's the difference??Good luck.