Yes, you can get a mortgage with existing debt, lenders are more interested in how well you manage it than whether you have any. This guide explains what lenders actually check, how your debt-to-income ratio affects your chances, the difference secured and unsecured debts make, and five practical ways to strengthen your application.
"It’s a bit of a myth that you shouldn’t apply for a mortgage until you’re debt-free. It’s just not true. Lenders aren't looking for a debt-free applicant. What they want is someone who manages their money well. A credit card balance or student loans won't stop your application in its tracks. But you’ll need to show lenders you can manage your debts and that you can be trusted with a mortgage on top of what you already owe."
Rachel Geddes
Strategic Lender Relationship Director
Will I get a mortgage with debt?
Yes, probably. Having debt doesn't rule you out of getting a mortgage. Most people applying for one have a credit card, car finance, or a student loan ticking away in the background. Lenders expect it.
What actually matters is how much you owe, what kind of debt it is, and how well you've kept on top of it.
Speak to an adviser
Not sure where to start? That's exactly what our advisers are here for. Speak to one of our mortgage advisers if you’re worried about your debts affecting your mortgage application.
What do lenders actually look at?
When you apply for a mortgage, lenders weigh up three things:
Affordability – can you comfortably cover the monthly repayments?
Credit history – does your track record show you borrow responsibly?
Existing debts – how much of your income is already spoken for?
A bit of debt is totally normal, so don't stress about it. In fact, if you've never borrowed anything at all, that can sometimes work against you. Lenders like to see that you know how to handle credit, not that you've avoided it altogether.
Use our Affordability Calculator to see how much you can afford to borrow.
Getting to know your debt
Not all debt gets treated the same by lenders.
Here's a quick rundown:
Credit cards – flexible, but often with higher interest
Personal loans – fixed repayments over a set time
Car finance – secured against the vehicle
Student loans – low priority, as repayments link to income
Overdrafts – short-term borrowing that still counts
Buy now pay later – small, frequent payments
Knowing where you stand across the board makes the whole process smoother.
How does debt affect my mortgage chances?
Debt can play into your application in two main ways:
Monthly repayments eat into your disposable income, which reduces how much you can borrow.
High balances or missed payments can dent your credit score, making lenders a little more cautious.
Plenty of people with debt get approved every day. Lenders just want to see debt that's manageable, with a solid repayment history behind it.
Secured vs unsecured debt
Debt falls into two camps: secured and unsecured.
Secured debt (like a car loan or another mortgage) is tied to an asset. If payments are missed, the lender can repossess that asset to recover their money. Because there's less risk for the lender, secured debt is usually seen as more manageable.
Unsecured debt (think credit cards, personal loans, overdrafts) isn't tied to anything. There's a bit more risk involved, so lenders look closely at how much you owe and how reliably you've paid it back. It's not a dealbreaker at all, just something they'll want to understand.
What about high-interest debt?
High-interest debt, especially big credit card balances, can raise a few eyebrows from a lender. It suggests your repayments could climb if rates change, and it can make paying things off trickier.
If this sounds like you, chipping away at it before you apply (or showing you're managing it well) can really strengthen your case.
Working out your debt-to-income ratio
One of the biggest things lenders look at is your debt-to-income ratio, or DTI. Don't worry, no advanced maths needed. Here's the simple formula:
· DTI = (total monthly debt repayments ÷ gross monthly income) x 100
So if you earn £3,000 a month and pay £600 towards debts, your DTI is 20%.
Generally, the lower your DTI, the more comfortable lenders feel lending to you.
Why does DTI matter?
Lenders use your DTI to work out whether you can realistically afford mortgage repayments alongside everything else you're already paying. A high DTI can suggest you're a bit stretched already, which might affect how much you can borrow, or whether you're approved at all.
The best bit? Your DTI isn't set in stone. Paying down debt, boosting your income, or a mix of both can bring it down before you apply.
Can I get a mortgage when I have credit card debt?
Yes, absolutely. Loads of people successfully get a mortgage with credit card debt, personal loans, or other borrowing sitting in the background. The trick is showing lenders that debt is under control.
When you apply for a mortgage, and you have credit card debt, lenders will look at:
Your balance compared to your credit limit
Your repayment history
Whether your debt is growing or shrinking
How much of your income goes towards repayments
Here's what helps:
Keep your utilisation low, ideally under 30%
Make consistent, on-time repayments
If you've just got a small, well-managed balance, try not to worry about it too much. Even bigger balances won't automatically lead to being told no by a lender. That said, if you’re able to pay off your credit cards before you apply for a mortgage, it will definitely help your application.
5 tips to boost your chances of mortgage approval
1. Pay down debt where you can
You don't need to be completely debt-free, but trimming your balances can genuinely help. Even small reductions make a difference to how lenders view your application, and to how much you could borrow.
Here's why it helps:
It improves your DTI. Smaller balances mean smaller monthly commitments, and a healthier ratio.
It boosts affordability. Fewer repayments going out means more income available for a mortgage.
It shows good financial habits. Paying down debt signals stability, and lenders love that.
2. Boost your credit score
Your credit score is a snapshot of how you manage money, so a better score can open the door to approval and better rates.
Here's how to give it a lift:
Check your credit reports on Experian, Equifax and TransUnion, and fix any mistakes.
Register on the electoral roll, as it helps confirm your identity and proves stability.
Build up positive history with things like rent reporting, a credit builder card (paid off in full each month), or a pay monthly mobile.
3. Stay on top of your payment history
Your payment history has one of the biggest impacts on your credit score. Lenders want proof you're reliable and always pay your bills on time, even with the small stuff like mobile bills or Buy Now, Pay Later loan payments.
How to strengthen it:
Set up direct debits for at least the minimum payment
Pay on time, every time, as even one late payment can leave a mark
Keep an eye on upcoming bills so nothing sneaks up on you
4. Manage your credit utilisation
Credit utilisation is simply how much of your credit card balance that you're using, shown as a percentage. Don’t worry, the maths is simple. Owe £200 on a card with a £1,000 limit? That's 20% utilisation.
Lower utilisation tells lenders you're managing your borrowing comfortably. Aim to keep it under 30%.
Ways to bring it down:
Pay down balances where you can, especially if you're close to your limit
Spread spending across accounts rather than maxing one out
Ask your provider for a higher limit if you won't be tempted to spend more (this lowers your percentage automatically)
5. Cut down on Buy Now, Pay Later (BNPL) debts
BNPL services like Klarna, Clearpay and PayPal Later can affect your mortgage application, especially if you use them often or miss payments. Lenders pay close attention to BNPL because it shows how you manage everyday spending.
What lenders look for:
Monthly commitments. BNPL instalments count as regular outgoings, which can reduce how much you’re able to borrow.
Spending habits. Frequent use can suggest cash flow issues or reliance on short term credit.
Bank statements: Even if BNPL isn’t on your credit report, lenders will see the payments and may ask questions.
Speaking to an adviser early on means you'll know exactly where you stand, and what (if anything) to work on before you apply. It can save you time and stress later.
Speak to a mortgage adviser today
You can also try our mortgage calculator to get an idea of what you could borrow, or check out our guides on credit scores and affordability to learn more.
Ready to chat? Our advisers are ready to call you back today. The first chat costs nothing and is totally free of obligation.
Something to bear in mind...
FAQ
Start with what'll make the biggest difference. Tackle high-interest debts first, as they cost you the most and hit affordability hardest. Try to bring credit card balances down, especially if you're using more than 30% of your limit. Paying a bit more than the minimum each month helps your balance shrink faster. And where you can, hold off on any new borrowing in the run-up to your application.
Student loans don’t work like traditional debt when it comes to mortgages. They don’t appear on your credit report, they don’t affect your credit score, and lenders don’t consider the total amount you owe. What lenders do look at is your monthly student loan repayment, because it counts as a regular outgoing. This means your student loan can slightly reduce how much you’re able to borrow, but it won’t harm your creditworthiness or block your application.
There's no single number that applies to everyone, as it depends on your income, your outgoings, and the lender's own criteria. That said, a good rule of thumb is to keep your DTI as low as you can. If your debt repayments are eating up a big chunk of your income each month, it's worth speaking to an adviser before you apply. They can look at your full picture and tell you exactly where you stand.
Using Klarna, or other Buy Now, Pay Later services like Clearpay or PayPal Later, can affect your mortgage application, depending on how often you use it and whether you’ve ever missed a payment. Klarna now reports repayment data to credit reference agencies, so late or missed payments can show up on your credit file and harm your chances of approval. Even if BNPL doesn’t appear on your credit report, lenders will still see the payments on your bank statements and may ask questions about them