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Can You Get a Mortgage with Debt? Quick Answer

can you get a mortgage with debt uk

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

If you’re thinking about applying for a mortgage but have some outstanding debt, you may be worried about your chances of securing it. 

While outstanding debts can certainly hurt your chances of securing a mortgage, it’s not impossible to get one. 

Today, I’ll be detailing how lenders look at outstanding debts and what you can do to secure a mortgage for yourself if you have outstanding debt. 

Is it Possible to get a Mortgage when I Already have Debts? 

Sometimes, certain types of debts such as credit card debt can be unavoidable and it’s understandable for you to have some type of debt while you’re looking for a mortgage. 

It’s understandable to think that a bank might be apprehensive about giving you a mortgage loan when you already have other debts to pay. 

That being said, you don’t have to worry as having debts does not necessarily mean that you won’t be able to secure a mortgage for yourself. However, the amount of debt you owe can play a part in whether or not you’ll be able to secure it or not. 

can you get a mortgage with debt

How Will Mortgage Lenders View My Mortgage Application? 

There’s a common false belief among debtors that having a debt completely destroys their chances of securing a mortgage.

However, the truth is that many lenders, if not all, don’t just look at the fact that you have a debt and instantly reject your mortgage application

There are a lot of factors that influence their decision such as the type of debt you have, how long you’ve had it, the circumstances surrounding the debt, your credit rating and your overall financial health. 

One important thing that a lot of lenders look at is your ‘debt-to-income’ ratio. As the name suggests, this is the payments you make towards your outstanding debt each month compared with your monthly income.

Generally, you’re more likely to secure a mortgage if your ‘debt-to-income’ ratio is low. 

Furthermore, if you have an outstanding debt but your credit history shows that you have paid off all of your past debts on time, then your chances of securing a mortgage will be quite high. 

As long as lenders get the impression that you’ll be able to make reliable payments towards your mortgage, they won’t hesitate giving it to you regardless of any debt you may already have. 

How Important is My Credit History when It comes to Getting a Mortgage? 

As I briefly mentioned earlier, most lenders will be very interested in your credit history.

This will help them paint a better picture of what your spending habits are like and whether you’ll be able to effectively pay off your mortgage or not. 

Most lenders look at the ‘spread’ of your credit which essentially means the type(s) of debts you owe. 

There are some types of loans that are generally deemed lower risk to banks than others.

For example, a car loan is generally not a major issue for a bank that’s considering giving you a mortgage. This is especially true if you use that car to commute to work. 

On the other end of the spectrum, you will most definitely lose favour with a lot of banks if you have a payday loan. For some banks, even if you’ve completely paid off your payday loan, it could stop them from giving you a mortgage for at least 12 months. 

As I said earlier, most lenders will be very interested in your credit score as well as the entire story behind your debt. How did you end up in that debt and what are you doing to address it right now?

Most lenders will be more favourable towards your mortgage application if you can point to a single event due to which you had to get that debt. This could be an accident, an illness, etc. 

As you can probably imagine, most lenders will not be favourable if you ended up in debt simply because you were reckless with your spending. 

If you have a poor credit score, you’ll be happy to know that there are a lot of lenders available that give ‘bad credit mortgages’. 

How Much Mortgage can I Borrow if I Already have Outstanding Debt? 

Before your mortgage is approved, your lender will look at your outstanding debt as well as your monthly income and run affordability calculations. 

Outstanding debt repayments will include credit cards, car loans as well as student loans.

This will help them determine how much you can afford to pay towards your mortgage monthly.

Most lenders will assume that you are making repayments towards your credit card debt and run this against your monthly income. This is usually 3% to 5% of your monthly income. 

Thus, the amount of outstanding debt you already have can significantly impact how much mortgage you can borrow. 

Obviously, your mortgage lender will only give you an amount that you will be able to comfortably pay back along with your other debt repayments. 

What if I’m Buying Property with My Partner? 

If you’re getting a mortgage to buy property collectively with your partner or spouse, then your lender may take their debt into account as well. 

Thus, both of your debt repayments as well as your monthly incomes will be taken into account when making affordability calculations. 

There are some rare cases in which a lender may be willing to split the earnings and debts owed by a couple. For example, this could mean that they would be looking at the debts owed by the husband and the monthly income of the wife.

While some banks are willing to consider this given the circumstances, it’s often quite rare. In most cases, they will look at the collective debt and income of the couple. Hence, you must make sure that you prepare your mortgage application accordingly. 

I Plan on Paying Off My Debts soon After Getting a Mortgage, Will this Affect My Chances of Securing a Mortgage? 

If you plan to pay off your debt in full soon after getting a mortgage, then some banks may be willing to take this into account when making their affordability calculations. 

Hence, this could definitely affect not only your chances of securing a mortgage but also the amount of mortgage you can secure.

Keep in mind that most banks are wary of doing this and you will have to provide extensive proof about how you plan on paying off your debts completely once you’ve secured the mortgage. 

Some banks might agree to write off 50% of your outstanding debt amount from their affordability calculations.

Others may refuse to budge and not write off anything at all during affordability calculations. 

I Currently have a Debt Management Plan. Will this Hurt my Chances of Securing a Mortgage?

A debt management plan is a debt solution which can help you out immensely when you’re overwhelmed with your debts.

Many companies even prefer a debt management plan because it helps them recover some (if not all) of the money they loaned.

You may be wondering if having a debt management plan affects your chances to get a mortgage or not.

The truth is that the monthly payments you make as part of your DMP will be taken into account by your mortgage lender just like any other regular debt you may have had.

If the mortgage lender believes that you’ll be able to comfortably make payments towards your DMP as well as your mortgage, they will not hesitate in giving it to you. 

For more advice on seeking a mortgage loan while having a DMP, you can opt to contact an independent charity such as StepChange or Payplan

What Should I Do Before I Apply for a Mortgage?

There are some things you can do to improve your chances of getting a mortgage before you apply for one. These are: 

  • Make sure to close any unused credit card or loan accounts you may have. 
  • Pay down any debts that you can afford in order to lower your debt-to-income ratio. 
  • Build up your credit report by making regular and punctual payments towards your debts. 
  • Make sure to be honest with your lender about any outstanding loans you have such as credit cards, student loans, car loans, etc. 
  • Use a specialist lender; While these people generally have higher interest rates, they are often more flexible if you happen to have a bad credit report. 


In the end, all I have to say is that you don’t need to be discouraged about securing a mortgage if you have outstanding debts.

You can definitely get one as long as you’re able to prove that you can reliably make your monthly repayments towards it. 
Even if you have a poor credit score, you can still look for a lender that provides mortgages to people with bad credit. 

You have a ton of options available to you; All you need to do is assess your situation and find the right one for you.


Are you struggling with debt?
Are you struggling with debt?
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  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring