Having high levels of unsecured debt can make applying for a mortgage feel more challenging. Credit cards, personal loans, overdrafts, car finance and other monthly commitments can all affect how much a lender may be willing to offer.
At Just Mortgages, our Adverse Credit Solutions Team helps clients understand how their debts may impact a mortgage application and what options may be available.
Can I get a mortgage with unsecured debt?
You may still be able to get a mortgage if you have unsecured debt, but lenders will look closely at affordability.
Unsecured debt does not automatically mean you cannot get a mortgage. However, if your monthly repayments are high, your borrowing power may be reduced. Lenders need to be confident that you can afford your mortgage payments alongside your existing financial commitments.
What is unsecured debt?
Unsecured debt is borrowing that is not secured against your home or another property. Common examples include:
- Credit cards
- Personal loans
- Overdrafts
- Store cards
- Car finance
- Buy now, pay later balances
- Catalogue credit
- Debt consolidation loans
The amount you owe, your monthly repayments and how well the accounts are managed can all influence a lender’s decision.
How does unsecured debt affect a mortgage application?
Lenders will usually assess your income, outgoings and existing credit commitments before deciding how much you may be able to borrow.
High levels of unsecured debt may affect:
- How much you can borrow
- Which lenders may consider your application
- Your affordability assessment
- The mortgage products available to you
- Whether the lender is comfortable with your financial position
Even if you have never missed a payment, large monthly debt commitments can still reduce mortgage affordability.
Will lenders look at my credit card balances?
Yes. Lenders may consider your credit card balances, credit limits and monthly repayments.
Using a large percentage of your available credit could make some lenders more cautious, particularly if balances are increasing or minimum payments are being made each month. However, every lender assesses this differently.
Should I pay off debt before applying for a mortgage?
Paying down debt before applying may help improve affordability, but this depends on your circumstances.
In some cases, reducing monthly commitments could increase the amount you may be able to borrow. In other cases, it may be more important to keep savings available for your deposit, legal costs or moving costs.
A mortgage adviser can help you understand which approach may be more suitable before you make a decision.
Can I remortgage with unsecured debt?
You may be able to remortgage if you have unsecured debt, depending on your income, property value, equity, credit history and affordability.
Some clients consider remortgaging to review their current deal, manage monthly payments or consolidate debts. Debt consolidation should be considered carefully because it may involve securing previously unsecured debts against your home and could increase the total amount repayable over the mortgage term.
What do lenders look at?
When reviewing a mortgage application where unsecured debt is involved, lenders may consider:
- Your total outstanding debt
- Your monthly repayments
- Your income and employment status
- Your regular household spending
- Your credit conduct
- Your credit utilisation
- Your deposit amount
- Whether debts are reducing or increasing
- Whether you have missed any payments
- Your overall affordability
A lender’s main concern is whether the mortgage remains affordable both now and in the future.
How can I improve my chances?
Before applying for a mortgage, it may help to:
- Check your credit file
- Make payments on time
- Avoid taking on new borrowing
- Reduce credit card balances where possible
- Avoid relying on overdrafts
- Keep your bank account well managed
- Review unnecessary subscriptions or commitments
- Prepare up-to-date income documents
- Speak to a mortgage adviser before applying
Applying to the wrong lender could lead to disappointment or unnecessary credit searches. Getting advice first can help you understand what may be realistic.
How Just Mortgages can help
At Just Mortgages, we will take time to understand your full financial picture. We can review your income, existing debts, deposit and credit history to help you understand how lenders may assess your application.
Our Adverse Credit Solutions Team can support clients with unsecured debt as well as other credit issues, including missed payments, defaults, CCJs, IVAs, Debt Management Plans, bankruptcy and repossession.
Speak to a mortgage adviser
High levels of unsecured debt do not always mean you cannot get a mortgage. The right next step depends on your income, commitments, deposit and wider circumstances.
If you are buying your first home, moving home or remortgaging, Just Mortgages can help you explore your options with clear, supportive advice.
Speak to our Adverse Credit Solutions Team today.
Mortgage with Unsecured Debt FAQs
Can I get a mortgage if I have credit card debt?
You may be able to get a mortgage with credit card debt, but lenders will consider your outstanding balances, monthly repayments, credit limits and overall affordability.
Does unsecured debt affect how much I can borrow?
Yes, it can. Monthly repayments on credit cards, loans, car finance and other debts are usually included in affordability checks, which may reduce the amount you can borrow.
Is it better to clear debt before applying for a mortgage?
Clearing or reducing debt may improve affordability, but it is not always the right option for everyone. You may also need savings for your deposit and moving costs, so it is best to get advice before making changes.
Can I get a mortgage if I am only making minimum payments?
It may still be possible, but some lenders may view ongoing minimum payments as a sign that your finances are stretched. They will look at your wider circumstances, including income, deposit and credit conduct.
Will overdraft use affect my mortgage application?
Regular overdraft use can make some lenders more cautious, especially if it suggests you are relying on borrowing to cover everyday spending. Occasional or well-managed use may be viewed differently.
Can I remortgage to consolidate unsecured debt?
It may be possible to remortgage to consolidate unsecured debt, but this needs careful advice. Consolidating debt into a mortgage may reduce monthly payments, but it could increase the total amount paid over time and puts your home at risk if repayments are not maintained.
Do I need a specialist mortgage adviser if I have high unsecured debt?
Specialist advice can be helpful because lender criteria vary. An adviser can help you understand how your debts may affect your application and which lenders may be more suitable.
Can Just Mortgages help if I have unsecured debt?
Yes. Just Mortgages can review your income, debts, deposit and credit history to help you understand what mortgage options may be available.