Yes, it is possible, but the lender will assess the income you actually have now or can evidence you will return to, not the salary you earned before. Many lenders consider a secured loan, also called a homeowner loan or second charge mortgage, or a remortgage for applicants on maternity leave if a return-to-work letter confirms the date and salary, typically within 3 months of the application. Reduced hours and benefits income can count too, within limits.
- Many lenders use your return-to-work salary if your employer confirms the date and pay in writing.
- Statutory Maternity Pay is paid for up to 39 weeks, and some lenders assess affordability on that figure alone.
- Reduced hours are assessed on the reduced income, usually evidenced by three months of payslips at the new level.
- Child Benefit, Universal Credit and some other benefits are counted by some lenders, often at a percentage of the amount.
- Any secured borrowing puts your home at risk of repossession if you cannot keep up the payments.
How do lenders treat maternity pay and a return-to-work letter?
Lenders fall into three broad groups. The most flexible will assess you on your full pre-leave salary if your employer confirms in writing that you have a job to return to, the date, and the pay, and you can show you will not be relying on that income before you actually go back. The letter usually needs to be on headed paper and dated within the last three months. Some lenders also want to see the last payslip before leave began and the maternity pay you are receiving now.
A second group will use the return-to-work salary only if the return date falls within a set window, commonly three to six months from the application, and will otherwise assess you on your current maternity pay. Statutory Maternity Pay is paid for up to 39 weeks, with the first six weeks at 90% of average earnings and the remainder at a flat statutory rate or 90% of earnings if that is lower, so affordability on SMP alone rarely supports much new borrowing.
The third group assesses everyone on the income being received today. If you apply to one of these while on the flat statutory rate, the case will almost certainly fail on affordability, even though the same case might pass elsewhere. It is a criteria difference, and exactly what a broker exists to navigate. Checking your options with a qualified adviser will not affect your credit score.
With two applicants, the lender also factors in childcare costs on your return, often the outgoing that surprises people at the affordability stage.
What if I have gone part-time or my hours have been cut?
A permanent change to fewer hours is assessed on the new, lower income. Lenders typically want three months of payslips at the reduced level, and if the change is recent, some will ask for a letter from your employer confirming the new contract. Overtime and bonuses earned before the change are unlikely to be counted unless they are continuing.
A temporary reduction is harder. If your employer has cut hours for a defined period and confirmed in writing that they will be restored, some lenders will use the full contractual figure, treating the situation much like maternity leave. If there is no end date, expect to be assessed on what you are earning now. Zero-hours contracts and agency work can still be considered by many lenders, usually on a 12-month average of payslips, and the self-employed are assessed on accounts or tax calculations; see our self-employed page for detail.
Whatever the reason for the drop, the honest question is whether the new payment fits the new budget with something to spare. Our guide on how much you can borrow shows how lenders build the calculation. Consolidation that only works on your old income is a warning sign rather than a solution, because if the loan is secured on your home, falling behind on it can lead to repossession.
Does benefits income count towards affordability?
Often, yes, though not always in full. Child Benefit, the child element of Universal Credit, Child Tax Credit, Disability Living Allowance, Personal Independence Payment and some pension-related benefits are all considered by a number of lenders. Many count them at 100% if they are long-term and evidenced by an award letter and bank statements; others count only a percentage, or only where there is also earned income in the household.
Benefits that are short-term or tied to unemployment, such as the standard allowance element of Universal Credit while looking for work, are less likely to count, and a few lenders will not lend at all where benefits are the main source of income. The secured loan market is generally more flexible here than mainstream remortgage lenders, which is one reason it is worth having both routes looked at rather than assuming a decline from your own bank closes the door. Our bad credit hub covers lenders' approach to non-standard circumstances more widely.
Be careful with consolidation that relies heavily on benefits income. Award rates change, children age out of entitlements, and a reassessment can remove income overnight while the loan payment stays exactly where it is. A lender counting your benefits at 100% is not the same as that income being dependable for a 15-year term.
Should I consolidate now or wait until my income recovers?
Often waiting is the better decision, and it is worth saying so plainly. If you are three months from returning to work on your full salary, an application then will be assessed on that salary by almost every lender, at better rates and higher borrowing limits than the same application today. If your reduced hours are temporary, the same logic applies.
The exception is when the current position is causing missed payments now. A default or a missed mortgage payment on your file will affect your options for years, and a smaller, sustainable consolidation today can sometimes prevent that damage. This is a fine judgement, and it is one to make with independent help rather than under pressure from a lender or broker.
Free, impartial debt advice should come before any application when income has dropped. MoneyHelper, StepChange and Citizens Advice can check whether you are claiming everything you are entitled to, help you set up temporary arrangements with creditors while on maternity pay, and tell you honestly whether borrowing against your home makes sense. Many people in this situation find that a short breathing space arrangement, or a token payment plan agreed with creditors, gets them through the low-income months without adding a secured debt at all. If consolidation still looks right afterwards, a qualified adviser can then match you to lenders whose income rules fit your circumstances.
Consolidating on reduced income is not the right move if the new payment only fits your budget once your full salary returns, since a delayed return, a change of plan or a further cut in hours would leave a secured debt you cannot service. It is also unsuitable if you are already in arrears with creditors or your mortgage, where a free advice charity can negotiate temporary reductions that borrowing cannot match. And if benefits make up most of your household income, weigh how secure that income is over the loan term before putting your home behind it.
Worried about debt? Get free advice first
If you're struggling, it's worth speaking to a free, impartial debt advice service before you borrow more. They don't sell anything and won't judge your situation.
- MoneyHelper: Free, impartial debt advice backed by government
- StepChange: The UK's largest free debt charity
- Citizens Advice: Free, confidential advice on debt and money
Checking your options with Equiclear will not affect your credit score.
Frequently asked questions
Can I get a secured loan while on maternity leave?
Yes, with many lenders, provided you can evidence your return to work with an employer's letter confirming the date and salary. Some lenders will use that salary in full; others will only assess the maternity pay you receive now, which limits how much you can borrow.
What does a return-to-work letter need to say?
It should be on company headed paper, dated within the last three months, and confirm your job title, your return date, your contracted hours and your salary on return. Some lenders also ask that it confirms your position is not at risk of redundancy.
Will Universal Credit count as income for debt consolidation?
Some lenders count the child and disability elements of Universal Credit, usually with an award letter and bank statements as evidence. The standard allowance for those looking for work is less often counted. Criteria vary, so a broker can identify which lenders suit your mix of income.
Is it better to wait until I am back at work?
Usually, yes. Once you are back on full salary, more lenders will consider you, borrowing limits rise and rates are often better. The exception is if delaying means missing payments now, in which case free debt advice can help you weigh the two options.
Will my partner's income be enough on its own?
Possibly. If the loan is in joint names, the lender assesses total household income against total outgoings, including childcare. If your partner's income alone covers the new payment comfortably, the case can pass even if your own income is temporarily low.