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Original poster

Childcare costs in mortgage application

9 replies

Marghe87 · 08/08/2023 11:18

Do all lenders take childcare costs into consideration when applying for a mortgage? Are they also likely to consider nuances and the bigger picture (i.e. what if you only have just over 1 year left in childcare fees) and is it easier to borrow more via a broker that can work this all out for you?
Our joint income would allow us to borrow enough to buy a nice home in our preferred area, where we already live, but if we put childcare costs into the equation, our borrowing potential will be massively impacted (outer London so very high fees).
Is there a way to go around ths?

OP posts:
Twiglets1 · 08/08/2023 11:24

The only way to get round it is to lie( not suggesting this, just being factual).

confusedlots · 08/08/2023 11:28

If you use tax free childcare, I know that people often top up their tax free childcare accounts with enough to cover 3 to 6 months childcare (if you're able to do so) and then use this to pay for childcare over the 3+ months when the mortgage company will want to see your bank statements. The mortgage companies generally just look at bank statements, not your tax free childcare account statements. Or you can work it so you top up the childcare account a bit and just add a lesser amount from your bank account each month so it looks like your childcare costs are lower.

Not saying that it's the right thing to do, but I certainly know that people do this.

arlequin · 18/08/2023 23:07

Not all lenders look at bank statements at all. Halifax doesn't for example.

Unexpectedlysinglemum · 18/08/2023 23:14

confusedlots · 08/08/2023 11:28

If you use tax free childcare, I know that people often top up their tax free childcare accounts with enough to cover 3 to 6 months childcare (if you're able to do so) and then use this to pay for childcare over the 3+ months when the mortgage company will want to see your bank statements. The mortgage companies generally just look at bank statements, not your tax free childcare account statements. Or you can work it so you top up the childcare account a bit and just add a lesser amount from your bank account each month so it looks like your childcare costs are lower.

Not saying that it's the right thing to do, but I certainly know that people do this.

Good idea

LittleRebelGirl · 19/08/2023 22:17

My broker input that when we move our childcare costs will stop and a high St lender accepted this. No evidence required.

WoWsers16 · 20/08/2023 08:21

Childcare costs was a major factor in ours last year - I had one on free hours but I was topping it up as well as before and after school club. I had £200 coming out my wages before tax and my mortgage broker kept going on about this and in the end I put it down to £50 which pleased them! I personally think it's what stopped our first try at mortgaging!
Our mortgage broker was fab tho - quite detailed but it always came back to childcare costs x

Original poster
Marghe87 · 21/08/2023 09:14

@WoWsers16 Can I ask, what do you mean with "put it down at £50"?

OP posts:
WoWsers16 · 21/08/2023 09:17

Marghe87 · 21/08/2023 09:14

@WoWsers16 Can I ask, what do you mean with "put it down at £50"?

So I can have £252 a month in vouchers - I don't have to use all of that so can be any amount under that - so before mortgage I was getting £200 out - during mortgage application I put it to £50 to help application. As soon as mortgage approved and we had moved I put it back up to £150 x
I did find in my experience childcare is something they look at x

Original poster
Marghe87 · 21/08/2023 09:29

@WoWsers16 I see. Thank you!

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