Outstanding Loan Debt

Posted on 10 March 2011 by Ben

Will I still be able to get a mortgage whilst in debt? I have a loan and have never defaulted on any kind of credit payment so have a reasonable credit score (last time I checked!). I earn a good salary (£28K + commission) and have a stable job. Would be buying with my partner who earns £20K and has 1 credit card, no other debt.


Yes it is possible to get a mortgage when you have outstanding loan or credit card debts. The usual practice for lenders is to make an allowance for these when calculating how much you can borrow and they will do this by deducting the annual amount of loan payments and approximately 5% of any outstanding credit card balances from your income. You can see the effect this has if you have a play with any of the 'How much can I borrow?' calculators on Banks websites.

The fact that you have credit and it is well conducted will stand in your favour, Lenders like to see a proven track record of paying your debts in time.

I believe you would benefit from speaking to one of our independent mortgage advisers. Please call on 0344 346 3672 and tell the consultant the date and title of your question. They will be able to look at your situation and advise you accordingly.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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