The Question
A bit of a complex question for you – but here goes! I own a three-bedroom house in Leicestershire and I have recently given up my job as a HR manager to become a teacher. I am going to start training in September and, as a consequence, my salary is going to plummet. Fortunately, I have savings to cover mortgage repayments at the moment.
However – and here’s the problem – I am due to remortgage in October. I’m fully aware my mortgage rate is likely to be much higher too.
My grow-up son lives with me and he earns a good salary and has agreed to pay ‘rent’ to help me pay the mortgage. I also have £45k in savings which I can use for repayments until my teacher salary increases. But will a mortgage lender take these savings and my son’s contribution into account?
Ranald’s Answer
Sounds like you are coming to the end of your current interest rate in October. Most lenders should offer you a new rate ahead of this date so that could be an option, rather than going on the lender’s standard variable rate (never do that!). There will be no underwriting of your income to do this.
If you are considering switching lender, you will need to go through the new lender’s affordability assessment. Part of 
this will look at your current income, which fast forward to September, will be lower although it may be sufficient to cover your mortgage.
Savings and your son’s rent are not going to help with this assessment as they are not earned income. From a lender’s viewpoint, savings can be spent, and your son could move out at any time, so they will not be widely considered.
Ranald Mitchell is director of Charwin Private Clients
