Can you get a mortgage with debt?
Yes, most people who get a mortgage have some debt. What matters is how much it costs you each month, how you have managed it, and what is on your credit file. Here is what lenders check, and what helps.
Quick answer
You can get a mortgage with debt. Lenders take your monthly debt payments off your income before working out what you can afford, and count credit card balances at about 3% a month. If your debt payments are under about 20% of your income and your credit history is clean, most lenders will consider you.
Higher debts or recent missed payments narrow the choice and can mean a bigger deposit, but specialist lenders exist for most situations. If you are struggling, free help is available from MoneyHelper.
Updated today
What lenders check
- PaymentsWhat your debts cost each month.
- RatioThose payments against your income.
- HistoryMissed payments, defaults, CCJs.
- TrendWhether it is going up or down.
A mortgage with debt, checked in Theo
- Debt to incomeHow lenders see it
- Adverse creditWhere your history puts you
- Card payoffWhen you could be clear
- ConsolidationThe true cost
If you are struggling
If you are struggling with debt, free and confidential advice is available. MoneyHelper (moneyhelper.org.uk) can point you to a free debt adviser near you.
Not sure where you stand?
Check before any credit search.
A mortgage with debt: how lenders read your ratio
| Debt to income | What it usually means |
|---|---|
| Under 20% | Comfortable for most lenders |
| 20% to 36% | Some lenders lend less |
| 36% to 45% | Fewer lenders, and more checks |
| Over 45% | Most lenders are likely to decline |
Clearing cards can lift borrowing
£15,000 on cards counts as £450 a month, which can cut what you borrow by about £70,000.
What lenders check for a mortgage with debt
Lenders work out what you can afford from your income, minus your commitments and living costs, tested at a higher rate. Every monthly debt payment, from car finance to buy now pay later, reduces what is left, and credit card balances are usually counted at about 3% of the balance a month, however little you actually pay. They also look at your credit file for missed payments, defaults and court judgments. See how much you can borrow.
Your debt to income ratio
Your debt to income ratio is your monthly debt payments as a share of your gross monthly income. Under about 20% is comfortable for most lenders; above that, some lower the amount they lend, and above about 45% most decline. See the debt to income ratio checker.
If your credit history has problems
Defaults, CCJs, missed payments, debt management plans, IVAs and bankruptcy all stay on your credit file for six years. The older they are, and the more you have done since, the more lenders will consider you. Specialist lenders, many of which only work through brokers, cover most situations. See bad credit mortgages and mortgages after an IVA or DMP.
What helps most
If you want a mortgage with debt, clearing credit card balances before you apply can lift what you can borrow quickly. Making every payment on time from now on. Not applying for new credit in the months before a mortgage. Checking your credit file for mistakes and registering to vote. See mortgages with credit card debt.
Moving debts onto a mortgage
Some homeowners move other debts onto their mortgage to lower their monthly payments. It can cut the monthly cost, but usually means paying more in total, and the debts become secured on your home. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. See debt consolidation remortgages.
If you are finding it hard to keep up, speak to a free debt adviser first. MoneyHelper (moneyhelper.org.uk) can point you to one.
Common questions
Can I get a mortgage with debt?
How much debt is too much for a mortgage?
Should I pay off debt before applying for a mortgage?
Do lenders count buy now pay later?
Where can I get free help with debt?
Keep exploring
Debt to income ratioHow lenders see your debts.
Bad credit mortgagesWhere your history puts you.
Mortgage after an IVA or DMPWhen more lenders open up.
Mortgage with credit card debtWhat clearing it is worth.
Debt consolidation remortgageThe true cost, worked out.
How much can I borrow?From lenders’ published criteria, not 4.5 times.
Theo App Ltd is not authorised by the Financial Conduct Authority and does not give mortgage advice. This page is information only and is not a recommendation. General information, not advice. Your home may be repossessed if you do not keep up repayments on your mortgage. Speak to an FCA-authorised mortgage adviser about your own circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.