Do You Qualify for a Stipend Mortgage?

Do You Qualify for a Stipend Mortgage?

The few lenders that offer stipend mortgages have different criteria when deciding if your stipend can be used. Some will only consider your stipend if other criteria are met.

The main issues are having enough time remaining on your stipend, if you have non stipend income, and if you are applying with somebody else.

Once you know if you qualify see the how much can you borrow with a stipend mortgage page and learn what documents are required.

Your exact circumstances will also determine what the minimum deposit size you will need it. Read more on deposit sizes needed. There are additional rules for non-British borrowers but EU citizens with settled or pre-settled status can be treated as British.

Last updated: 4th January 2022

Stipend Mortgages

Only you apply, only stipend income

Time since stipend started

You need to have received your first stipend payment.

If you have already been receiving your stipend for six months you will have the most options.

Time remaining on stipend

You need to have 12 months remaining at the point of the mortgage application.

Previous employment

Previous employment is not essential but you will have more options if you were continuously employed (or self-employed) for the six months before you started your PhD. 

If you have already been receiving your stipend for six months this counts as employment.

Only you apply, you have other income

Time since stipend started

You need to have received your first stipend payment.

Realistically though, to use your additional income most lenders will want to see you can earn the additional income for 12 months before agreeing to use both.

Time remaining on stipend

Ideally you would have have 12 months remaining but it could be possible with just six months remaining so long as your additional income is acceptable (see next two sections)

Employed income

Permanent role

If this is a permanent position your income could be considered up to 3 months before the position starts.

Fixed term contract

If it is a fixed term contract then it must be at least 12 months long at origin, with at least 6 months remaining.

OR

You’ve been on fixed term contracts without breaks for the last 12 months and currently have more than 3 months remaining (though ideally this would be 6 months).

Zero Hours Contract

One years history and evidence is required.

Important to note:

Ultimately your employed income needs to be seen as sustainable and it must be realistic that you can manage your PhD and the source of your additional income. For this lenders will be more comfortable if you can evidence that you have done both for the last year.

If your fixed term contract is coming to an end a few months after your PhD starts it is unlikely to be considered sustainable, especially if both, or even just one is full time.

Self-employed income

You need to have been trading for at least two years 

Your latest two years net profit or income from self employment will be used.

They will take the average of the two years when assessing your income, or the latest year if it is lower. 

This can be your net profit as a sole trader, or your income from employment and dividends if you are the director of a limited company. 

Important to note

Your self-employed income needs to be seen as sustainable by the lender in order to consider it. If you were working full time for yourself and now are commencing a PhD but plan to keep doing some self-employed work it is unlikely to be accepted.

More likely, the lender will want to see that you have managed a PhD and self employment for at least the last year before considering your self-employed income.

Do You Qualify?

You and an employed or self-employed partner apply

Time since stipend started

You need to have received your first stipend payment.

Time remaining on stipend

You need to have 6 months remaining at the point of the mortgage application.

Partner's income

Ideally they will have been employed for the last 6 months to give you the best stipend mortgage options.

Employment contracts starting in the next 3 months can be acceptable. If on a fixed term contract they need an original length of 12 months with 6 months remaining, or at least 3 months remaining if they have already got 12 months fixed term contract experience.

If your partner is self-employed they need two years trading and two years Tax Calculations & Tax Year Overviews.

If your partner does not work or has been self employed for less than 2 years see the ‘Only your apply’ section. 

You and another PhD candidate apply

Time since stipend started

You each need to have received your first stipend payment.

Time remaining on stipend

You each need to have 12 months remaining at the point of the mortgage application.

Other employed or self-employed income

it may be possible to use this. See the employed income and self-employed income sections under ‘Only you apply, you have other income.’