Family Planning and Mortgages – the impact of maternity leave

Mortgages and Maternity leave – some considerations 

If you are applying for a mortgage and are currently on, or will be going on, maternity leave before the mortgage is drawn down, it’s important to tell your mortgage advisor. They can guide you through any potential impact this may have.

Why It Matters?

Lenders are primarily concerned about whether your income is sustainable and if you can afford to repay the mortgage.

If you are on Maternity Leave In addition to standard income documentation –

• Salary Certificate
• Employment Detail Summary (EDS)
• Recent payslips

You will also need to provide – A letter from your employer confirming:

• Your expected return-to-work date
• That your terms and conditions of your employment remain unchanged

If your maternity leave is unpaid or you plan to take unpaid leave, this will need to be addressed, at minimum to show that you can continue to afford to repay the proposed mortgage during this unpaid period.

Ability to repay – almost all lenders look at the six months immediately preceding application to ascertain if the mortgage is affordable. If you are planning a mortgage application and a period of unpaid leave you will need to plan to ensure you can continue to show repayment ability. This may require additional saving to cover a period of unpaid leave.

Medical Expense – medical expenses including IVF may mean that your regular savings pattern is interrupted or that you need to dip into savings. In such instances we can flag medical expenses as out of course and add them back so as to explain account depletion.

Even After Mortgage Approval –

Lenders can request updated payslips or bank statements at any time. Keep your advisor informed of any changes or exciting news!

What If You are in Early Pregnancy?

If your mortgage will be drawn down before you go on maternity leave, you don’t need to tell your lender.
However, it’s still important to plan how you will cover mortgage payments if you take unpaid leave later.

What if you have a dependent at the time of a mortgage application?

If you apply for a mortgage with a dependent(s) then the bank will generally need to get a sense as to any childcare costs. Also as part of the living allowance required for applicants an additional sum may need to be added for a family living allowance.

Only one lender will take child benefit into account for income multiple purposes with the €140 * 12 = €1,680 * 4 times income multiple for first time buyers allowing you to borrow an additional €6,720 based on income multiples.

Other Considerations – 

If you plan to take Unpaid Leave

• Start saving ahead of time.
• If you already have a mortgage then you may want to consider a mortgage payment break, but be cautious:
  • It may be recorded as a change in mortgage terms on your credit report.
  • This could impact future mortgage applications – generally lenders need to see min two years full repayments being made on a mortgage before they would lend again. This is important if you are looking to trade up to a new home in the near future.

Finances and Maternity leave – Am I entitled to state maternity benefit?

Self-Employed or Employed: Maternity Benefit & PRSI Requirements

To qualify for Maternity Benefit (€289/week for 26 weeks), you must meet certain PRSI contribution requirements.

There is a specific Maternity Benefit Dept in Donegal who you can contract re any queries but some broad conditions for eligibility are –

If You Are Employed –

You need either:

• Min 39 weeks of PRSI paid in the 12 months before your leave,
  OR
• Min 39 weeks of PRSI since starting work + 39 weeks paid or credited in the relevant or following tax year
  OR
• Min 26 weeks paid in the relevant year (e.g. if you are going on mat leave in 2025, the relevant tax year is 2023 and the year before that 2022) + 26 weeks in the year before that

If You Are Self-Employed –

You need:

• 52 weeks of PRSI (Class S) in the relevant tax year (mat leave 2025, relevant year 2023)
  OR
• 52 weeks in the year before or after the relevant tax year (mat leave 2025, relevant year before would be 2022, the tax year after the relevant year would be 2024)

You must have paid your income tax and PRSI to receive Maternity Benefit.

The above is a guide only, all circumstances are different – the Maternity benefit Dept can be contacted on 0818690690.

How many weeks maternity leave in Ireland?

• 26 weeks of paid leave (€289/week via social welfare – remember this is a taxable income)
• Up to 16 additional weeks unpaid leave
• Total of up to 42 weeks leave
• Employer may top up maternity benefit
• Must provide doctor’s cert and employer form (MB2 or MB3)

You must take at least 2 weeks and no more than 16 weeks of leave before your due date.

Additional Support:

Parents Benefit

• 9 weeks of paid leave (€289/week)
• Must be used within 2 years of the child’s birth

 Premature Births

You may get extra paid leave based on how early your baby is born. Contact the Maternity Benefit team.

Unpaid Leave & Mortgage

If you’re considering unpaid leave, plan ahead:

• Save where possible
• Talk to your advisor about your options (e.g. mortgage payment breaks)
• Understand the credit implications of a payment break

Don’t forget if you have medical expenses you can claim a tax refund –

You may claim 20% back on eligible medical costs (this claim is after deduction of any refund by a private insurer):

• IVF
• Doctor or consultant visits
• Prescriptions
• Physio or chiropractic care

Upload receipts to Revenue’s MyAccount.

How much is Child Benefit in Ireland and how do I claim it?

• €140/month per child
• Twins: 1.5x the rate per child
• Triplets or more: 2x the rate per child

How to Claim –

• Register your baby’s birth within 3 months
• DSP will automatically start a claim and send a form (CB1)
• If you already receive Child Benefit, your new child will be added to your claim

Useful Link:

• Citizens Information: Maternity and Adoptive Leave

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Planning for a period of unpaid leave? 

Planning for a period of unpaid leave—especially around maternity or parental leave—requires careful financial preparation and clear communication.

Here are some tips and considerations –

1. Understand Your Timeline

• When will unpaid leave start and for how long?
• Will it follow paid maternity leave or be taken separately (e.g., extended parental leave)?

2. Estimate Your Monthly Expenses

Make a list of essential outgoings:

• Mortgage or rent
• Utilities and bills
• Groceries
• Childcare (if any)
• Insurance and car costs
• Subscriptions and other recurring payments

Add any one-off costs (e.g. baby gear, medical bills)

3. Calculate the Income Gap

Figure out how much income you’ll lose:

• Will you receive any social welfare (e.g., Parents Benefit)?
• If relevant, will your partner or spouse continue to work?
• Subtract expected income from total monthly expenses to determine the shortfall.

4. Build a Savings Buffer

Try to save at least 3–6 months’ worth of expenses before going on unpaid leave (easier said than done I know with all the other costs of a new small person!) Ways to build savings:

• Set up a dedicated savings account
• Save any bonuses, tax refunds (claim those medical expenses), or where possible maternity benefit during paid leave

5. Review Your Mortgage & Loans

• Can you overpay your mortgage in advance? An example is PTSB allow break based on prior overpayment – discuss with your mortgage lender
• Explore the option of a payment break—but note this can affect your credit file and future lending ability
• Speak to your lender or mortgage advisor early if you expect there to be issues with your return to paid employment due to exceptional issues

6. Check Your Entitlements

• Maternity Benefit: €289/week for 26 weeks if eligible
• Parents Benefit: €289/week for 9 weeks (within 2 years of birth)
• Medical expense tax relief: Claim 20% on eligible costs (like IVF, prescriptions, consultants)
• Child Benefit: €140/month per child

Sites for further information –  MyWelfare.ie and CitizensInformation.ie for details.

7. Talk to Your Employer

• Confirm your unpaid leave approval in writing
• Ask if you’re entitled to any top-up payments or benefits so you can budget your income
• Discuss how this time will affect:
  • Annual leave accrual
  • Pension contributions if applicable
  • Returning to work conditions

8. Revisit Your Budget Monthly

• Track spending closely during leave
• Adjust non-essential spending as needed (e.g., eating out – although your social life may be curtailed anyway!)

9. Plan for Return-to-Work Costs

• Childcare
• Commuting

10. Don’t let finances cause you undue stress

If we can be of any assistance please do let us know – our advisory team at doddl are always there to help and we are normal people with family lives – we understand everything can come at once, we can help.

If you want to plan for your mortgage application, let’s get started – Get in touch with our team!