Mortgage application, nursery fees / vouchers

Gallowgatejim

I earn a basic salary of 32.5 My wife earns 19. We have no loans, credit cards etc..

We pay 680 per month to a nursery which is made up of a 240 salary sacrifice from my wife and the remaining 440 comes out of our joint account by direct debit.

Subject to how I 'input' / breakdown the childcare figures when completing online calculators I get very different answers to the 'how much can I borrow' question.

With Nationwide for example..

(1) If when completing online calculators I declare our salaries as 32.5 for me, 19k for wife and childcare costs as 680 per month, we can borrow 207k.

(2) if I deduct the 240 per month from my wife's salary (12 x 240 = 2880 (call it 3k)) and so say she has a salary of 16k, and then declare childcare costs as 440 per month, we can borrow over 220k.

This same pattern occurs with most other lenders.

Option 2 is of course better for us (we need 220k to move to the house we want). Logically, I can't see why the results are different. The disposable income left for us (detailed in option 1) are more or less the same as those in option 2 (ie of a couple where the wife earns 16k (not 19k) but who only have to pay 440 per month childcare (as opposed to 680).

In fact, because of the tax benefits of using vouchers, you could argue that the couple in option 1 are 'better off.'

I'd be grateful if any mortgage adviser / other knowledgeable person could advise whether there is any chance of a lender agreeing to let us submit our calculations as per option 2 as opposed to option 1? The wage slips evidence the 19k salary with 240 deducted at source (effectively reducing the annual amount to 16k - leaving only 440 per month payable to the nursery)

Thanks

amnblog

If the £240 is on the left side of the wage slip and coming off of gross then option 2 sounds correct.

Gallowgatejim

Thanks for the response. The wage slip has payments on the left hand side and deductions on the right. The 240 voucher is deducted on the right hand side together with tax and national insurance.

I'm aware therefore that strictly speaking my wife's salary is 19k (as opposed to 16k with a cheaper nursery fee). However I can't see why there would be any disadvantage to a lender in allowing us to input our figures as per option 2 as practically speaking we have the same disposable income (if not more) than the option 2 scenario. For some reason the calculators seem to prefer the lower wage / lower outgoing scenario, even if the disposable income is identical.