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Getting a Mortgage if You’re Paid in Cash

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: November 3, 2021

What does it mean if you’re applying for a mortgage with cash payments as your main source of income? We’ve put together this guide to explain the full implications of this, including how to get a mortgage with cash wages and how to evidence a cash deposit.

Can I get a mortgage if I get paid in cash?

Yes. Although there are mortgage lenders, such as Post Office Money and Metro Bank, who decline customers with cash income outright, other mortgage providers are more flexible and can consider applicants with cash-in-hand wages, under the right circumstances.

Despite the myths that tend to circulate around this topic, it’s not actually illegal or dodgy to be paid cash-in-hand for work carried out in the UK. As long as the employer is paying the employee’s PAYE (Pay As You Earn) and National Insurance contributions to HMRC and the employee agrees to cash wages, this method of payment is perfectly acceptable.

If cash is the main source of your income, you can expect the lender to carry out extra checks and place more scrutiny around your affordability to safeguard themselves. Additional payslips, P60s, bank statements or employers references may be requested as most mortgage providers will want to see your salary paid into your bank account.

Applicants whose main income is cash payments have a higher chance of mortgage rejection if they head to the market without professional guidance. This is simply because there’d be fewer approachable lenders compared to someone who’s paid directly into their bank account – but there’s a quick and easy way to tip the odds in your favour.

There are mortgage brokers who specialise in customers who are paid cash-in-hand. They fully understand the needs of these applicants and have deep working relationships with the lenders who offer mortgages based solely on cash income. Speaking to the right broker before you apply is the best way to make sure you get the ideal mortgage for you.

When is cash income not acceptable for a mortgage application?

Some mortgage lenders have strict caveats when it comes to applicants who make their money cash-in-hand.

Certain mortgage providers might decline an application if…

  • They have any reason to suspect the employer isn’t paying the right tax
  • The applicant has recently moved to the UK from another continent
  • Not enough proof of income – additional evidence may be required for cash-in-hand applicants, such as extra payslips, P60s, bank statements or employers references
  • The cash-earner is the main applicant – a minority of lenders only consider applications on a joint basis where the second applicant is the cash-earner
  • The cash-based job isn’t a full-time position

As you can see from the example criteria above, there are lender restrictions that you can fall afoul of if you’re a cash-earner and you approach mortgage lenders at random. The best way to avoid these pitfalls and boost your chances of mortgage approval is to find a broker who specialises in cash-based applications and arranges them every day.

How to get a mortgage with cash-in-hand income

The application process itself will be no different to applicants who don’t receive cash-in-hand wages, besides the possibility of extra scrutiny from the lender…

Here are the steps to follow to kick off your mortgage application…

  • Get your documents together: As a cash-income applicant, you might need extra proof of your earnings. So make sure you have at least three months’ worth of payslips and bank statements, as well as your P60. You might also need a reference from your employer confirming that you’re paid cash-in-hand.
  • Download your credit reports: It’s a good idea to download all of your credit reports to make sure they’re fully up to date. Challenge any inaccuracies and have any outdated information removed. You might also want to read our guide on building and repairing credit for a mortgage application before you press ahead.
  • Find a mortgage broker: This is highly recommended if your income is made up of cash payments. The right mortgage broker can make sure you’re paired with the ideal lender, first time, boosting your chances of mortgage approval.

Make an enquiry with us so we can match you with a mortgage broker who specialises in cash-in-hand applications and help you ensure your application gets off on the right track.

How to evidence a cash-based mortgage deposit

Cash deposits which were sourced from cash-in-hand income are perfectly acceptable as far as most lenders are concerned. They need to be evidenced in the usual way, via bank statements showing the funds building up in your account and during the affordability assessment, in which the lender will request wage slips from you.

Moreover, cash deposits from other sources, such as gifted deposits from family, will need to be evidenced with documentation. In this case, a letter from the person who is providing the gift to confirm it in writing and state that they will have no interest in the property.

Cash-funded mortgage deposits are only an issue for lenders and underwriters if the origin of the funds cannot be traced or the source is illegitimate. If either of these things is true of your cash deposit, these funds generally can’t be used for a mortgage application.

Speak to a broker who specialises in cash-income mortgages

If your income comes from cash-in-hand payments, speaking to a broker before you apply for a mortgage is recommended. The right broker can offer bespoke advice, guide you through the application process and make sure you find the right lender, first time.

We’ve made it our mission to make sure people find the perfect mortgage broker for them. Our free broker-matching service will carry out a quick assessment of your needs and circumstances to pair you up with the advisor who’s best placed to help you get the best mortgage deal available to you. In this case, it will be a mortgage expert we’ve handpicked because of their knowledge and experience with cash-in-hand-earning applicants.

Call us today on 0808 189 2301 or make an enquiry and we’ll set up a free, no-obligation chat between you and a broker who specialises in mortgages for people on cash income every day.

Ask us a question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in different income types.

Ask us a question and we'll get the best expert to help.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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