Concerning new research from comparison website uSwitch indicates that many women who apply for mortgages in the UK feel discriminated by lenders, because starting a family would impact on their finances.
Since 2014, securing a mortgage has become tougher in the face of stricter regulations. Applicants are now permitted to detail their monthly outgoings and how they would cope should interest rates rise.
Data from the report shows that 25% of women have purposely not disclosed plans to begin a family over fears that their mortgage application would be refused. 9% said they have been discriminated against because of their plans to have a family.
11% said that they would delay having a child in order to obtain a mortgage, with 48% saying they would save up to cover payments during maternity leave. In addition, the added information required when applying for a mortgage of having an emotional impact on a many women. 71% of those who didn’t disclose family plans to their lenders experienced increased levels of stress and anxiety during the application process.
In total, 27% of women believe that current affordability criteria is out of touch with modern family finances, with a large number saying savings should be taken into account.
UK women say mortgage rules are discriminatory
‘There is a strong feeling that mortgage lenders, rightly or wrongly, may be penalising women for starting a family,’ said Tashema Jackson, money expert at uSwitch. ‘A worrying oucome is that some female mortgage applicants are feeling forced to withhold information from potential lenders. Not only can this have severe implications in terms of invalidating any mortgage offers, but it is causing stress and anxiety for home buyers at a critical time in their life,’ she continued.
Jackson suggests that, ‘while it’s vital that lenders help people only borrow within their means and ensure they can afford future payments, it’s not fair for lenders to make blanket assumptions.’ She said that, ‘those planning a family may be able to manage their repayments even with a drop in household income, thanks to careful planning or savings.’
Concluding, Jackson said that uSwitch, ‘believe lenders should be making decisions based on a broader picture of an applicant’s financial situation, including the amount that they have in savings, rather than on assumptions about a woman’s personal circumstances or intentions.’