Mortgage Discrimination: Your Rights on Age, Disability, and Pregnancy

Getting a mortgage declined is bad enough. Getting declined because of who you are — your age, a disability, or because you're pregnant — is potentially unlawful. UK law protects you from discrimination in financial services, including mortgages. But the line between lawful risk assessment and unlawful discrimination isn't always obvious.

This guide explains your rights, what lenders can and can't do, and what to do if you believe you've been discriminated against.

The Legal Framework

The Equality Act 2010

The Equality Act 2010 is the main legislation protecting against discrimination in England, Scotland, and Wales. It makes it unlawful for mortgage lenders to discriminate based on nine protected characteristics:

1. Age
2. Disability
3. Gender reassignment
4. Marriage and civil partnership
5. Pregnancy and maternity
6. Race
7. Religion or belief
8. Sex
9. Sexual orientation

FCA Requirements

The Financial Conduct Authority requires mortgage lenders to treat customers fairly. The FCA's Principles for Businesses include:

• Principle 6: Treating customers fairly
• Principle 8: Managing conflicts of interest
• MCOB rules: Specific mortgage conduct of business rules

Consumer Duty

Since 2023, the FCA's Consumer Duty requires lenders to deliver good outcomes for all customers and to avoid causing foreseeable harm.

Age Discrimination

What Lenders Can Do

Lenders are allowed to consider age as a factor in mortgage lending, but only in specific ways:

• Maximum age at end of term: Most lenders set a maximum age at which the mortgage must be repaid — commonly 70, 75, or 80. Some go to 85 or beyond. This is generally considered lawful because it's based on a reasonable assessment of the borrower's ability to repay.
• Retirement income assessment: If you'll retire during the mortgage term, the lender can ask how you'll afford payments on a reduced income. This is legitimate affordability assessment.

What Lenders Cannot Do

• Blanket refusal based on age: A lender cannot simply refuse all applicants over 50 (or any other age). They must assess each case individually.
• Ignoring retirement income evidence: If you can demonstrate adequate retirement income (pension, investments, rental income), a lender shouldn't decline solely because of your age.
• Setting unnecessarily restrictive maximum ages: If a lender's maximum age at end of term is unreasonably low compared to the market norm, this could be challenged.

Practical Reality

Older borrowers do face challenges, but these are often solvable:

• Some lenders will go to age 85 or beyond at end of term
• Retirement interest-only (RIO) mortgages have no fixed end date
• Family building societies are often more flexible with older applicants
• Evidence of pension income is key — get your pension forecasts ready

Disability Discrimination

Your Rights

Under the Equality Act, a lender cannot:

• Decline your application because of a disability — physical, mental health, learning disability, or long-term health condition
• Offer worse terms because of a disability
• Refuse to make reasonable adjustments to their process to accommodate a disability

Reasonable Adjustments

Lenders must make their application process accessible. Examples include:

• Providing application materials in large print, Braille, or audio format
• Allowing longer time to complete applications
• Accepting applications by phone if you can't attend in person
• Providing a signing interpreter for appointments
• Making adjustments to their communication methods (email instead of phone, etc.)

Benefits Income

Many disabled people receive disability benefits. How lenders treat this income is crucial:

• PIP (Personal Independence Payment): Some lenders include this in affordability calculations, others don't. Those that do may boost your borrowing capacity.
• ESA (Employment and Support Allowance): Generally included by lenders who accept benefits income.
• Universal Credit disability elements: Treatment varies by lender.
• DLA (Disability Living Allowance): Being phased out but still received by some — treatment varies.

A lender who refuses to consider disability benefits as income isn't necessarily discriminating — they may simply not accept benefits income from any applicant. But if they accept other benefits (like child benefit) while refusing disability benefits, this could be challenged.

Mental Health

This is a sensitive area. Lenders cannot:

• Decline you because you have a mental health condition
• Treat a period of mental health-related sick leave differently from physical health sick leave
• Refuse to lend because you've previously received mental health treatment

However, if a mental health condition has led to financial difficulties (missed payments, defaults), the lender can consider those financial events. They're assessing the credit history, not the condition.

Pregnancy and Maternity Discrimination

The Law

It is unlawful to decline a mortgage because someone is pregnant or on maternity leave. Full stop. This is one of the clearest areas of the Equality Act.

What Actually Happens

Despite the law, pregnant applicants and those on maternity leave face real challenges:

Income assessment during maternity leave: A borrower on maternity leave may be receiving statutory maternity pay (SMP) or employer-enhanced maternity pay, which is lower than their usual salary. Lenders must consider:

• What income the applicant will return to after maternity leave
• The temporary nature of reduced income
• Whether the applicant has provided evidence of their return-to-work date and salary

A lender who assesses affordability based only on current maternity pay — ignoring the return-to-work salary — may be discriminating.

Shared parental leave: The same principles apply. Lenders should assess your income based on your returning salary, not your temporary leave income.

What Lenders Can Legitimately Do

• Ask for confirmation of your return-to-work date
• Request a letter from your employer confirming your returning salary
• Assess whether you can afford payments during the maternity period as well as after
• Consider childcare costs in their affordability calculation (they'd do this for any parent)

What they cannot do is simply decline because you're pregnant or on maternity leave.

Sex and Gender Discrimination

Lenders cannot treat applicants differently based on sex. This means:

• Joint applications: Both applicants' income must be considered equally
• Single applicants: A single woman should be treated identically to a single man with the same financial profile
• Self-employment: Women's self-employment income shouldn't be treated differently from men's

Gender Pay Gap Considerations

While individual applicants can't be treated differently based on sex, the gender pay gap means women as a group often face lower borrowing limits because of lower average incomes. This isn't discrimination — it's a consequence of unequal pay in the wider economy — but it's worth being aware of when comparing experiences.

Race and Ethnicity Discrimination

Lenders cannot discriminate based on race, ethnicity, or national origin. This includes:

• Declining based on nationality (though non-UK residents may face different criteria based on residency, not race)
• Treating foreign income differently based on the applicant's ethnicity rather than legitimate verification concerns
• Applying different criteria to applications from certain postcodes in a way that indirectly discriminates on racial grounds

If you suspect racial discrimination, this is a serious matter. Document everything and seek legal advice.

What to Do If You've Been Discriminated Against

Step 1: Request the Decline Reason in Writing

Ask the lender to confirm exactly why you were declined. If the reason relates to a protected characteristic, you have evidence.

Step 2: Raise a Formal Complaint

Complain to the lender in writing, citing the Equality Act 2010 and explaining why you believe the decision was discriminatory. The lender has 8 weeks to respond.

Step 3: Contact the Financial Ombudsman Service

If the lender's response is unsatisfactory, escalate to the FOS. The Ombudsman can:

• Investigate whether discrimination occurred
• Order the lender to reconsider your application
• Award compensation

Step 4: Seek Legal Advice

For serious discrimination cases:

• Contact the Equality Advisory Support Service (EASS) — free advice on discrimination
• Speak to a solicitor specialising in discrimination law
• Contact Citizens Advice for initial guidance
• Consider a county court claim under the Equality Act (within 6 months of the discriminatory act)

Step 5: Report to the FCA

If you believe a lender is systematically discriminating, you can report this to the FCA. They won't investigate individual cases but they do act on patterns of unfair treatment.

The Difference Between Discrimination and Risk Assessment

This is the grey area. Lenders are entitled to assess risk. They're not entitled to discriminate. The distinction:

Legitimate risk assessment:

• Assessing affordability based on your actual income and outgoings
• Considering your credit history and payment behaviour
• Evaluating the property as suitable security
• Assessing whether you can afford payments throughout the mortgage term

Potential discrimination:

• Declining because of your age without considering your actual retirement income
• Refusing to lend because you're pregnant without considering your returning salary
• Not making reasonable adjustments for a disability
• Treating applicants differently based on race, religion, or sexual orientation

If you're unsure whether your experience was legitimate risk assessment or discrimination, seek advice. Many cases fall in a grey area where expert opinion helps.

This is educational content, not financial advice. Your situation is unique — speak to a qualified mortgage broker and, if you suspect discrimination, seek legal advice.