We’re here to help you understand the process and how to navigate the unique hurdles foster carers face.
Yes, you can absolutely get a mortgage as a foster carer in the UK. For the most part, the criteria to be approved are the same as anyone else.
Most lenders will require you to have been fostering for a minimum of six months, however some specialist lenders may accept less than this. The mortgage criteria are likely to differ from one lender to the next, so it’s a good idea to shop around.
It can be harder for foster carers to get a mortgage primarily due to how their income is treated by HMRC and how lenders assess affordability. Here are the main reasons:
Self-employed status: Foster carers are considered self-employed by HMRC, which means they are responsible for filing annual tax returns. This self-employed status can be a red flag for some lenders, who often view it as less stable than traditional employment, even though foster carers may have consistent income.
Tax relief: Foster carers receive significant tax relief on their income, meaning much of what they earn is tax-free. This can reduce the taxable income figure they report, making it appear lower than their actual earnings. Lenders might mistakenly view this as a reduced ability to afford mortgage repayments.
Inconsistent understanding among lenders: Not all lenders are familiar with how foster care income works, or how to properly account for the tax relief. This lack of understanding can lead to rejections or more difficult applications for foster carers, even though they may be financially capable of affording a mortgage.
The good news is, while it can be trickier, it’s definitely possible for foster carers to get a mortgage. There are lenders out there who understand the unique financial situation of foster carers and take that into account.
Here are a few tips to help you get started:
Find a specialist lender: Some lenders have tailored mortgage products for foster carers, recognising the tax reliefs and treating your income more accurately in affordability assessments.
Provide detailed paperwork: You’ll likely need to supply more documentation than other applicants. This could include your last two years of income statements, bank statements, and a letter from your fostering service confirming your role.
Work with a mortgage broker: A broker who has experience with foster carers can help guide you to the right lender. They’ll know who is most likely to approve your application and help you navigate the process.
Check your credit score: As with any mortgage application, your credit score will be a factor. Make sure it's in good shape before you apply.
To make the mortgage process smoother, it’s essential to have the correct documentation ready. Foster carers typically need to provide:
Tax returns: At least six consecutive months of tax returns proving your income from fostering.
Bank statements: Lenders may request bank statements for the last 6-12 months to see your regular income and outgoings.
Letter from fostering agency: A letter confirming your status as a foster carer and providing evidence of regular payments.
Proof of identity and address: Standard documentation such as a passport, driving licence, and utility bills.
Credit report: Lenders may access your credit report to review your creditworthiness.
Having these documents prepared can help avoid delays in the application process and improve your chances of approval.
To improve your chances of mortgage approval, avoid these common mistakes:
Not disclosing fostering income properly: Make sure to provide all your income details accurately, including foster care payments.
Applying to the wrong lenders: Some lenders don’t understand foster carers' income structure, so it's best to approach those who do, or use a specialist broker.
Overestimating affordability: Be realistic about what you can afford in monthly payments. Foster care income can fluctuate, so be cautious when estimating future earnings.
Skipping credit checks: Not checking your credit report before applying can lead to surprises. Correct any mistakes ahead of time to avoid issues.
If you're feeling uncertain about your options, there are organisations that can offer advice. FosterTalk, for example, is a useful resource for foster carers looking for financial guidance. They even have a helpline you can call on 01527 836 910 to discuss your situation and get professional advice.
Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.
Fiona is a personal finance writer with over 7 years’ experience writing for a broad range of industries before joining Ocean in 2021. She uses her wealth of experience to turn the overwhelming aspects of finance into articles that are easy to understand.
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