With more people working from home since the pandemic and the Great Resignation, it’s worth checking whether remote work affects your mortgage.
The short answer? For most employees doing clerical or computer-based work at home, it won’t.
The longer answer? It depends on how you’re using your home.
Working from home and mortgages
For many, working from home has been a positive change, more balance, less commuting, and your own brand of tea on tap.
But if you’re making working from home permanent, could it affect your mortgage? Maybe.
Most lenders are fine if you’re an employee working remotely with a laptop at the kitchen table or in a spare room.
Where it gets more complicated is if you’re running a business from home.
Use a mortgage broker or do it yourself – Which is best?
When a home-based business could affect your mortgage
Some mortgages include a clause preventing you from operating a business at the property.
That doesn’t usually apply if you’re just working for an employer remotely, but it may apply if:
- You use more than 30–40% of your property for business activities
- You store significant stock at home (e.g. running an eBay or online shop)
- You host clients, customers or staff at your property (e.g. beauty salon, photography studio)
- You’ve converted part of your home into business premises (e.g. garage storage, home office suite, or a supper club)
In these scenarios, your lender may say you need a semi-commercial or commercial mortgage.
Why it’s worth telling your mortgage provider
Even if you think your setup is fine, it’s better to inform your mortgage provider.
Most will simply confirm that no changes are needed. But in some cases, not telling them could technically put you in breach of your mortgage terms.
Mortgage expert Claire Flynn at money.co.uk explains:
“If you’re running a business from the comfort of your own home, the first thing you need to do is notify your mortgage lender. If not, you risk breaching the terms of your contract, with some lenders prohibiting business use as part of the terms and conditions. In the worst case this could result in you having to repay the whole mortgage immediately.
However, in most cases homeowners are simply doing their regular job from home. If that’s the case, and you’re just at a computer, then it’s unlikely this will cause a problem and your lender will probably allow you to continue with your residential mortgage.”
Other factors to consider when working from home
Insurance
Home insurance may not cover business equipment. If you use specialist kit or have clients visiting, you may need additional cover.
Council tax and business rates
If part of your home is used exclusively for business, the local authority could classify it for business rates.
This is rare for standard remote working, but more likely if you convert a room solely for business use.
Planning permission and deeds
Some homes have restrictions on business use written into the title deeds. Always check before making changes.
Income and affordability checks
- Employees: If you’re just remote working, this has no impact on how lenders assess your income.
- Self-employed: If you’re freelancing from home, you’ll need to show consistent income—usually two years of tax returns or SA302 forms. Irregular income may require a specialist lender or broker.
When to get professional advice
If you’re:
- Running a business from home
- Unsure if your use breaches your mortgage terms
- Self-employed with variable income
…then it’s wise to speak with a mortgage broker or solicitor. They can advise whether you need a different mortgage product or extra insurance cover.
What is a mortgage holiday and should you take one?
What happens if you don’t tell your mortgage provider you work from home?
For the average home worker, I suspect nothing will happen. At the end of the day, the mortgage company just wants their money and won’t care too much about where it comes from.
That said, it’s much better to just tell them so you’re fully covered and there are no issues down the line.
For a more professional opinion:
Claire Flynn, mortgages expert at money.co.uk, said: “If you’re running a business from the comfort of your own home, the first thing you need to do is notify your mortgage lender.
“If not, you risk breaching the terms of your contract, with some lenders prohibiting business use as part of the terms and conditions. In the worst case scenario this could result in you having to repay the whole mortgage immediately.
“However, in most cases homeowners are simply doing their regular job from home. If that’s the case, and you’re just at a computer, then it’s unlikely this will cause a problem and your lender will probably allow you to continue with your residential mortgage.
“You’re much more likely to need to make a change if a significant portion of your property is being used for business purposes. This could be the case if you sell products and have stock on the premises, or run a photography studio from your residence, among other things.”
So there you have it.
If you work from home at a computer, nothing much is likely to change.
If you use more than 40% of your home for your business, you may have to consider a commercial or semi-commercial mortgage.
Mortgages and working from home FAQs
1. Do I need to tell my lender if I’m working from home for an employer?
Usually no. If you’re just doing your day job remotely (emails, video calls, spreadsheets), most lenders treat this the same as working in an office.
2. When would I need a commercial or semi-commercial mortgage?
If 30–40% or more of your home is used for business, or if you have clients visiting, stock stored on-site, or structural changes for business use, lenders may require a different mortgage.
3. Could working from home affect my insurance?
Yes. Standard contents insurance may not cover work equipment, and liability cover may be needed if clients visit your home. Always check your policy.
4. How does self-employment from home affect mortgage applications?
Lenders will need proof of consistent income—usually two years of HMRC returns or accountant records. Self-employment itself isn’t a problem, but fluctuating income can be.
5. What happens if I don’t tell my lender?
For the average home worker, probably nothing. But technically, not informing them could breach your contract—especially if you’re running a business. Worst case, the lender could call in the loan.
