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Being on benefits doesn’t automatically stop you remortgaging. Whether it’s straightforward depends on which benefit you receive, how much of your income it makes up, and which lender you approach, since lenders vary in how they treat different types of benefit income when assessing affordability.
This matters because a remortgage relies on the lender being satisfied you can afford the repayments, so understanding what’s likely to count, and what isn’t, helps set realistic expectations before you apply.
Do lenders accept benefit income for a remortgage?
Some do, though practice varies considerably between lenders. Broadly:
| Type of income | How it’s commonly treated |
|---|---|
| State pension | Widely accepted as income |
| Private or workplace pension | Widely accepted |
| Universal Credit or other means-tested benefits | Accepted by some lenders, often only in part, or alongside other income |
| Disability-related benefits (e.g. PIP) | Some lenders accept these, sometimes fully, depending on the lender’s own policy |
| Child benefit and tax credits | Occasionally counted, usually only alongside other income, and by fewer lenders |
This table shows a general pattern, not fixed rules; each lender sets and can change its own approach, which is why comparing lenders, or using an adviser who knows current practice, matters more here than for many other situations.
How do lenders assess affordability when benefits are involved?
Lenders generally look at your total household income and outgoings, stress-testing against a higher rate in case costs rise, in the same way they would for any applicant. Our guide on how lenders assess affordability covers the general approach, including the mortgage stress test. Where benefits are part of your income, a lender will typically want evidence such as award letters or bank statements showing the payments, and will decide how much weight to give that income based on its own criteria.
Does having a low income from benefits mean you’ll be treated as bad credit?
No. Your income and your credit file are assessed separately. Being on benefits, or having a lower income generally, isn’t adverse credit and won’t appear as an entry on your credit file. What lenders look at separately is whether you have a CCJ, default, missed payments or other credit history issues, alongside whether your income (from any source) supports the repayments. Our page on remortgaging with a low credit score explains how lenders view credit history specifically.
What if you’re older and receiving a pension?
If you’re retired or approaching retirement, pension income, whether state, workplace or private, is usually a more straightforward basis for a mortgage application than some other benefits, because it’s typically stable and well-documented. Age and mortgage term limits still apply and vary by lender. Our page on later life remortgages with bad credit goes into this combination in more depth, including how it compares with equity release for older homeowners.
What if you’re struggling to keep up mortgage payments while on benefits?
If your income from benefits doesn’t currently stretch to cover your mortgage, don’t wait until you’re in serious arrears before acting. Speak to your current lender early: it must treat you fairly and consider options such as a temporary payment arrangement. Depending on your benefits, you may also be able to check eligibility for Support for Mortgage Interest, a government loan (not a benefit itself) towards mortgage interest for people on certain benefits, repayable when the home is sold or ownership changes. Our guide on what to do if you can’t pay your mortgage sets out the wider options.
What if a lender turns you down?
If one lender declines your application, or offers less than you need, that doesn’t mean every lender will reach the same view, since acceptance of benefit income differs so much between lenders. A specialist adviser who regularly places cases involving benefit income, and who also understands adverse credit if that applies to you, can often identify lenders more likely to consider your full circumstances.
What does this mean if you’re remortgaging with bad credit?
If you’re on benefits and also have a CCJ, defaults or other adverse credit, both factors are assessed, but separately: your income source affects what a lender will count towards affordability, while your credit file affects how the lender views your track record with credit. Being upfront with your adviser about both, rather than letting either come as a surprise partway through an application, gives you the best chance of finding a lender suited to your full circumstances. If money is tight, free, impartial guidance is available from MoneyHelper, StepChange and National Debtline.
What evidence should you have ready?
Whichever benefit you receive, having clear, up-to-date evidence ready tends to speed up an application. This usually means recent award letters or online statements showing what you receive and how regularly, alongside standard bank statements covering the last few months. If your benefit income has recently changed, for example after a reassessment, having documentation that explains the change can help a lender understand your current position rather than an outdated one.
Does combining income sources help?
Many people on benefits also have some earned income, a partner’s income, or a pension, and combining these can widen what a lender is willing to consider, since the benefit-only portion of your income may be treated more cautiously on its own. If you’re applying jointly with a partner whose income doesn’t rely on benefits, that can also change which lenders are realistically available, though both applicants’ credit files and circumstances are usually assessed together. A specialist adviser can talk through how your particular combination of income sources is likely to be viewed before you apply, which avoids an unnecessary hard search with a lender unlikely to proceed.
Frequently asked questions
Do all lenders accept benefit income?
No. Some lenders don't count certain benefits towards affordability at all, while others accept a range of benefits either fully or partly. Practice varies a lot between lenders, so it's worth checking, ideally with a specialist adviser who knows which lenders are more flexible.
Does receiving benefits count as bad credit?
Can pension income be used for a remortgage?
Yes, state pension and many private or workplace pensions are commonly accepted as income by mortgage lenders, often more readily than some other benefits, since pension income tends to be stable and well documented. Our guide on later life remortgages with bad credit covers this in more detail.
What if I'm behind on my mortgage and receiving benefits?
If you're struggling, speak to your current lender as early as possible; it must treat you fairly and consider options like a payment arrangement. You may also be able to check eligibility for Support for Mortgage Interest. See what to do if you can't pay your mortgage.