Do Workplace Share Schemes affect Mortgage Borrowing Amount?

Legacy_user

Good morning

My question to you helpful fellows is this.....if i pay into a Workplace Share Scheme (post tax, not salary sacrifice) will this affect the maximum amount we can borrow on our mortgage?

Bit of background...

We are currently looking to move to a bigger home, at present we are stuck in a Santander 2 year fixed mortgage. This product is portable so provided we stick with Santander we won't have to pay the £6,000 early exit fee (ouch!). However we did find out that we can renegotiate onto a cheaper product 6 months before the end of our fixed....so swings and roundabouts i guess!

Anywho! At work they have released an option to put money into a pot for 3 years and then have the option to either pull your money out OR buy shares at an option price (around 20% lower than todays current share price). Now the maximum I can put in is £375pm, of which i will probably use about £40. But i thought this might be a good opportunity to invest some of my dear old mums money as she's nearing retirement and doesn't have a private pension. So thoughts are she could get a nice return of around 30% which is better than her Santander 123 account and her money is safe as if the market crashes she can just get her money back.

So back to the original question. By putting £375 into this share scheme, then having dear mumma transfer the money into my account each month, would this affect our maximum lending potential?

I have asked Santander and awaiting a response but wanted to get a whole market opinion from the lovely mortgage advisors at MSE

betmunch

Its depends on the lender.


For Santander they will include it, unless you can, and tell them you will, opt out if it is required to keep paying the mortgage

System

Thank you for the quick response

I don't suppose you have a list of lenders who won't take it into consideration?

If i can get a mortgage lender who doesn't and means i can help my Mum out then it's a win win.....however if it affects how much we can borrow then i'll have to deal with the Mrs as could compromise getting our dream home

betmunch

That's not the sort of list I would share with knowing full details of a client, and even then it would be a formal recommendation of one of the lenders of the list.


The ONLY reason I even used the word Santander in my post is that you brought them up first!


Naming a lender could be seen as giving advice, which is why none of the professionals on here will name a lender.


If this sharesave scheme is a deal breaker then you need to speak to a professional broker.

System

Ok thanks for your help, i'll check the an advisor

AnotherJoe

Can I presume you aren't locked into this scheme for three years?
In which case, why is it any different to, say, you deciding to save £375 a month into an ISA ?

You can stop that if it interferes with the mortgage. Its not something you are committed to like a car loan, or credit card debt. So I wouldn't put it down.

System

I can cancel the scheme at anytime and would get 'my' money back

So this would make it voluntary? much like you suggested 'paying into an ISA'. I imagine this is why some lenders will and some wont

derelyth

I also pay in to a Sharesave/SAYE scheme with my Employer. My Broker checked with the lender (Nationwide) and they said as it is Voluntary they wouldn't take it in to account as I can stop paying it if required.

System

Thank you derelyth!

This helps us decide whether to stick with Santander or wait until our fixed has finished in February to find a new lender to which this SAYE scheme doesn't get taken into account

chanz4

npower offered these, their shares flopped