Mortgage declined. It's a phrase that strikes fear into the hearts of many applicants. If you're one of them, don't worry — you're not alone. Every day, people are turned down for mortgages for all sorts of reasons. But that doesn't mean your dream of owning a home is over. In this guide, we'll explore why a mortgage application could be declined and the options available to you after having been refused a mortgage. That way, you’ll know what to do next if you ever find yourself in this situation.

Why Would My Mortgage Application Be Declined?

Most of the time, people's mortgage applications are rejected not because they can’t get a mortgage, but because they didn’t meet that specific lender’s criteria. The market is huge with many providers who have flexible lending criteria better suited to different situations.

If you were turned down by your bank, it doesn't mean another lender won't be willing to consider you. High street lenders like HSBC, Natwest, Lloyds and Barclays usually have stricter criteria so, depending on your situation, you may be better off applying with a building society or specialist lender instead.

Going through independent mortgage broker like John Charcol is the easiest way to ensure you apply with a lender with that can actually consider your application. We have access across the whole market and can help you find a mortgage product that's suitable for your needs.

For example, if you had a Natwest mortgage application declined, we can look at your situation and direct you towards more suitable lenders.

In order to give yourself the best chance of finding a suitable lender, it's important to understand why your application was rejected in the first place.

Let's take a look at some of the common reasons behind mortgages being declined.

Insufficient Income

One of the key requirements for getting a mortgage is having a sufficient income. If your income is too low, it can lead to your mortgage application being declined or the lender offering you a reduced loan amount. This is because lenders want to be sure that you'll be able to make your monthly mortgage payments.

Lenders will also look at your debt-to-income ratio when considering your mortgage application. This ratio is a measure of how much debt you have against your salary. If your debt-to-income ratio is too high, it may indicate to lenders that you're not in a good position to take on additional debt and this can lead to your application being declined.

It's important to take a close look at your income and debts to ensure that you'll be in a good position to get approved. By getting your finances in order before you apply for a mortgage, you can maximise your chances of a positive outcome.

Poor Credit Rating

Your credit record is another important factor in determining whether you're eligible for a mortgage or not. Your credit history shows lenders how reliable you are when it comes to paying back money that's borrowed. If your credit report contains any bad events like late payments, defaults or CCJs, this can have a negative impact on your mortgage application.

It's important to check your credit report regularly and take steps to improve it if necessary. This may involve satisfying any existing debts, making payments on time, setting up direct debits to regularly pay off credit cards, etc. Be careful about taking out new loans or using too many credit cards as this can have a negative impact on your credit rating, too.

It's important to note that there are 3 main credit reference agencies in the UK (Experian, Equifax and TransUnion) and lenders often use different ones when assessing your application, so it's important to check all 3 for any discrepancies on your credit report. If there are any errors, you should dispute them with the relevant agency as soon as possible.

Too Many Credit Applications

Making too many credit applications in a short period of time can also be a red flag for lenders. When lenders see this they’ll often assume you are overstretching yourself financially and will consider your application high risk. Therefore, it's best to avoid making multiple credit applications within a short period of time. This includes applying for a mortgage with multiple lenders as well. While this may seem difficult as you may not know which lenders will accept your application, there is a simple solution: speak to an independent, specialist mortgage broker.

At John Charcol, our experienced advisers are on hand to provide impartial advice and help you find the right mortgage product for your needs. We have access across the whole market, meaning we can quickly identify which lenders are likely to consider your application and give you the best rate available.

So, if you had a Santander mortgage application declined, an HSBC mortgage application declined, or are having difficulties securing a mortgage with any other financial institution, then please get in touch on 0330 433 2927. Our team are here to help.

Absence from the Electoral Roll

Lenders look at your electoral register status as part of their assessment process. This is to verify your identity and that you live at the address stated on your application. If you're not registered, then it can be more challenging to secure a mortgage with most lenders. To avoid any delays or problems in your mortgage application process, it's important to make sure that you're registered to vote. This can easily be done online or by post and it's a relatively simple process which shouldn't take too long.

Payday Loans

Payday loans are often seen as a red flag by lenders, as they can indicate that you're in financial difficulty and have had to resort to short-term borrowing. If you have any outstanding payday loans or other high interest debt, it's important to pay these off before applying for a mortgage. Paying them off early will also help improve your credit score and give you a better chance of being accepted by the lender. Any payday loan you take will stay on your credit file for 6 years, so it's important to be aware of this before taking out this kind of high interest loan.

Deposit Size

The size of your deposit is also a key factor in whether you're accepted for a mortgage or not. Lenders often require at least 5% - 10% of the purchase price as a deposit, but this can be higher depending on your circumstances.

The larger the deposit you have, the lower risk you’re perceived to be by lenders. This is because the LTV (loan-to-value) ratio is lower, so the lender is assuming less risk of losing money if you default on your repayments.


Having an overdraft, whether planned or not, can make getting a mortgage more difficult. This includes arranged overdrafts that you have with your bank and unarranged overdrafts that you have fallen into. An overdraft can be seen as a sign of financial difficulty and money mismanagement. Potential lenders may be wary of approving you for a mortgage when they see this on your credit file. But don't worry — there are plenty of lenders who are happy to take on applications that have been previously rejected because of their overdraft.

UK Residency Status

If you've lived in the UK for less than 3 years, then some lenders may be reluctant to take you on. This is because they may struggle to build a comprehensive overview of your financial situation and will be unable to get the whole 6 years of credit history from your file.

The above are just some of the common reasons why a mortgage application may be declined. It's important to remember that getting rejected doesn’t necessarily mean you won’t be able to get a mortgage, it simply means that the lender may have stricter requirements than you can currently meet. Make sure you ask your lender or broker for feedback on your application so you can make any necessary changes or improvements before reapplying.

What Can I Do if My Mortgage Application Is Declined?

Mortgages Types

If your mortgage application is declined, don't despair; there are other options available. The truth is that this happens to many people, especially first-time buyers who may not be as aware of the different criteria that lenders use when assessing applications. When we explored what percentage of mortgage applications are declined in the UK, we found that a huge 65% of first-time buyers had their applications rejected in 2021.

Here are some tips about what to do if your mortgage application is declined and you want to apply again.

Identify Why Your Application Was Rejected

Contact your lender or broker to find out why your application was declined.

If it’s due to something on your credit report then obtain your credit report from a credit reference agency immediately. You can then take action to rectify it, whether it’s an error that can be corrected, a bill that needs to be paid off, or something more serious that requires time to pass in order for it to have less of an impact on your credit score.  

If it’s due to you not meeting that lender’s specific criteria – whether it’s a bad credit event or something else - then you can use this information to direct you towards a more suitable lender with more flexible criteria.

Not Reapplying Straight Away and Avoiding Unnecessary Hard Credit Checks

Rushing to look for another lender is an understandable temptation, but it's not always the best idea. Applying with too many lenders in quick succession can result in too many hard credit checks on your credit report, which can lower your score and limit the deals available to you.

If you want to reapply sooner rather than later, consider a lender that offers soft credit checks at the DIP (decision in principle) stage of the mortgage application, rather than hard credit checks. While all lenders will conduct a hard credit check before sending you a mortgage offer at the full application stage, securing a DIP with a soft credit check can give you a better idea of whether a lender is going to accept you without having an impact on your credit score. This can save you from unnecessary hard credit checks. Your mortgage broker can direct you towards a lender that conducts a soft credit check at the DIP stage.

Addressing the Issue

Once you've identified the problem, take steps to remedy it as best as you can before reapplying.

This can include:

  • Improving your credit score: take steps to improve your credit score, such as paying any outstanding debts, paying bills on time and making sure you're on the electoral register. This may take some time but will ultimately give you access to better deals and give you a better chance of securing a mortgage
  • Saving for a larger deposit: if you have the means to do so, try putting together a larger deposit which can help to reduce the risk for lenders. This will also potentially give you access to better deals and lower rates
  • Applying with an alternative lender: whatever the reason you were rejected, it’s likely there is a lender out there that can consider your application. For example, if you have a bad credit score that’s too low for a high street lender, then there will likely be an adverse credit lender that can consider you. Independent mortgage brokers like John Charcol can help you to find the right lender for your circumstances

Getting the Best Advice for Your Situation

It’s best to get an expert's help if you've had a mortgage application rejected. At John Charcol, we’ll direct you towards the right lender for your situation, giving you the best chance of securing a great mortgage deal. Even if you were declined recently, we can advise you on your next steps and explain what other options are available to you.

Will Being Declined a Mortgage Affect My Credit Score?

Having a mortgage application declined will show that a hard credit check has been performed. Other lends will be able to see this on your credit file. While one hard credit search is unlikely to severely damage your credit score, too many of these searches can lower your credit score.

This can be avoided by:

  • Waiting to reapply – waiting until you’ve managed to boost your credit score, save a bigger deposit or improve your financial situation overall before reapplying will give you access to more lenders who can consider your application and increase the likelihood of you securing a mortgage
  • Applying with lenders who do a soft credit search at the DIP stage – approaching lenders that don’t do a hard search until you’ve submitted your full mortgage application will enable you to get a better idea of whether a lender will accept you without going through unnecessary hard credit checks that can damage your credit score
  • Use a mortgage broker – brokers like John Charcol can direct you towards lenders that are more likely to accept your application and that do soft searches at the DIP stage. This means we can help you avoid unnecessary hard searches and give you the best chance of securing a mortgage

What to Do if Your Mortgage Is Declined – Speak to an Expert

It’s worth speaking to a mortgage broker like John Charcol if your mortgage application is declined. We’ll learn about your situation, explain your next steps and guide you in the right direction.

Call us on 0330 433 2927 to learn more.

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