Loughborough Building Society has launched a universal credit calculator to support its intermediary partners.

The calculator will assess affordability for clients receiving Universal Credit and other benefits.

The interactive tool, which is available on the website, clarifies how various income sources factor into a client’s borrowing requirements and what the lender will accept. 

It also simplifies an often misunderstood aspect of mortgage lending, enabling brokers to guide clients through the application process with greater confidence.

Universal Credit, Child Benefit, Job Seekers Allowance, Pension Credit, Carers Allowance, Attendance Allowance, and Constant Attendance Allowance, will all be assessed at 100% of income. 

Meanwhile, Working Tax Credit, Child Tax Credit, Personal Independence Payment, Disability Living Allowance, Employment & Support Allowance, and Adult Disability Payment, will all be assessed at 50% of income. 

Loughborough Building Society head of intermediaries Ashley Pearson says: “The Loughborough is dedicated to making mortgage lending more inclusive and we recognise the unique challenges faced by borrowers relying on Universal Credit and other benefits.”

“Our new calculator accounts for these complexities, offering a clear understanding of assessable income when determining mortgage affordability. This ensures our intermediary partners can provide clear, simple and accurate guidance to those who need it most.”

Last week, the government announced it would make welfare cuts that amount £5bn a year. 

Work and Pensions secretary Liz Kendall said the savings that will fully come into force by 2030 are needed because the current benefits system is “failing the very people it is supposed to help and holding our country back”.

Among a range of other restrictions, the welfare department will also make changes to universal credit, paid to 7.5 million people, abolishing incapacity top-ups to claimants under 22. However, the basic rate of universal credit will rise.