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DOES A STUDENT LOAN AFFECT MORTGAGE APPLICATIONS?

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Does student loan affect mortgage UK?

If you have previously taken out student finance and are now looking to purchase property, you may be wondering “do student loans affect mortgage deals?”.

In this guide, we will talk you through how student loans are assessed as part of mortgage applications and how you can still get a great mortgage deal even with student debt.

Can you get a mortgage with student loans?

The first question a former student may have when applying for a mortgage will most likely be “can I get a mortgage with student loans?”. The answer to this is yes, it is still possible to get a mortgage when you have previously received student loans.

You can even get a mortgage as a current student if you get the right advice from a trusted and experienced mortgage broker. In fact there are many great options for student mortgages, though often a joint mortgage or guarantor mortgage may be the best option. If a first time buyer, you may even be able to find specific deals with better rates.

Does student loan affect mortgage application UK?

A student loan will be assessed as part of affordability checks when applying for a mortgage. This is not however an immediate cause for concern and shouldn’t prevent you from buying a home.

This type of personal loan is not seen as high-risk debt and if you have good credit overall you shouldn’t run into any issues. Lenders may in fact look at you having been to university as a positive thing.

This is especially true if you did a course that could lead to solid consistent income or high earning career prospects e.g. a medical course.

If you have a poor credit history as well as student loans this can complicate things, but our experts are here to help. We have years of expertise in helping people with various elements of poor credit including defaults, CCJs or IVAs on their credit file find great mortgage rates.

Student loans and mortgages

If you have been to university, this shouldn’t stop you from finding a mortgage with excellent rates. With so many people having been in full time education, lenders will be very used to dealing with student loans during applications.

When it comes to student loan repayments, you may have never made a monthly repayment if you do not earn over the minimum threshold. If you are repaying your loan, these payments are very likely small expenses that shouldn’t majorly impact your overall affordability.

Do mortgage lenders look at student loans?

Lenders will consider your loan when assessing whether you will be approved for a mortgage, but they will always assess your affordability as a whole. This will include things such as savings you may have, deposit size, any investments or other sources of revenue etc.

Other factors lenders will consider include:

  • Credit score/history
  • Loan to Value (LTV)
  • Any significant monthly expenses
  • Loan amount

Can student loans stop you from getting a mortgage?

Student loans should not prevent you from getting a mortgage. Unlike other types of loan and debt, these loans do not automatically appear on your credit file or affect your credit score.

Mortgage providers will consider your loan during the application, but it will be looked on more favourably than other more serious forms of debt or poor credit.

How much do student loans affect mortgage?

Every lender has different criteria for lending and will view forms of debt such as loans differently as well. It is highly unlikely student finance will have a huge impact on your chances of getting a mortgage.

If you want further advice about student loan debt and mortgage applications, speak to one of our mortgage experts. We can search deals across the market and advise you on the best mortgage lenders and deals for your needs. We are authorised and regulated by the Financial Conduct Authority and able to offer years worth of mortgage expertise.

Useful resources

UCAS – Student finance in England

Gov.uk – Student Loans Company

Gov.uk – Repaying your student loan

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