The Client
The clients were a couple looking to purchase their first home. One partner was leaving employment to take up a research position, furthering their qualifications and long-term earning potential. This meant they would no longer have an earned income for the duration of their studies.
The Scenario
With only one income remaining, the couple could not afford a property in their area. The client pursuing further study was due to receive a non-taxable stipend to support their research, but several banks had already turned the couple away, saying they could not accept this type of income at all.
The Solution
We secured the clients a mortgage with a high street bank on a low, fixed five-year rate. The lender was willing to accept the stipend income, taking the view that the client’s job prospects and future earnings would improve significantly once qualified, reducing the long-term risk of lending against a temporarily reduced income.
The Outcome
The clients had expected to rent for the full three years of the research programme. Instead, they are now settled in their new family home. This case shows the value of working with a whole-of-market residential mortgage broker with the reach to find lenders willing to work with non-standard incomes and arrangements that high street banks decline outright.
Frequently Asked Questions
Can I get a mortgage if my income is a PhD stipend or studentship?
Yes, though not every lender will accept this type of income.
Some high street lenders decline stipend income outright, while others will consider it, particularly where future earning potential is strong once the qualification is complete.
Will lenders accept non-taxable income for a mortgage?
Some will, though it depends on the lender and how the income is evidenced.
Non-taxable income such as a research stipend still needs to be documented clearly, and not every lender’s policy allows for it.
Does a temporary drop in income during study affect mortgage eligibility?
It can, but a strong future earnings case can offset this with the right lender.
Lenders willing to consider this type of case often look at the qualification being pursued and what it is likely to lead to, not just the income during the study period itself.
Why would a bank decline standard income types like a stipend?
Many mainstream lenders only have policies built around salaried or self-employed income.
A stipend does not fit either category cleanly, so automated criteria often reject it even where the underlying case is strong – this is where manual underwriting and lender selection make the difference.
If you have any questions relating to a mortgage with non-standard income, contact us today to speak directly with one of our Mortgage Advisors.
UK Mortgage Broker is a whole-of-market broker directly authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: +44 1628 969 500
Email: info@uk-mortgagebroker.co.uk
Related Pages
- Residential Mortgages – whole-of-market advice for homeowners across the UK
- First-Time Buyer Mortgages – deposit requirements, affordability and how to get approved
- Self-Employed Mortgage – how lenders assess non-standard income for mortgage applications
- How Lenders Actually Check Your Income – what counts and what does not when a lender assesses affordability