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    University fees have increased in recent years and so too has the level of student loan debt that millions of people have accumulated. If you are still making payments on your student loan, you will understand the effect this can have on your overall finances.

    If you are currently thinking about buying a house, it might be that you are worried about your student loan. As your financial position has been compromised because of your outstanding debt, you may assume it will affect your chances of a successful mortgage application.

    Yes, your student loan can affect you getting a mortgageHowever, student loan debt alone will not stop you from getting a mortgage. Most lenders will consider your application regardless of your student loan debt, so you don’t necessarily have to clear your outstanding balance before you apply for a mortgage.

    In this guide, we will discuss the effect that student loan debt can have on a mortgage.

    Keep reading to learn more and get in touch with a member of our team if you have any questions after reading our guide.

    Do student loans affect mortgage UK

    A student loan will not automatically rule out your chances of being offered a mortgage. The majority of mortgage lenders will consider your application regardless of your student loan debt. So there is no need to clear your outstanding debt before you apply for a mortgage. We do however strongly suggest you speak to a fee-free mortgage broker.

    When you come to apply for a mortgage you will still be subject to the lender’s affordability checks, and as part of these, your student loan will be taken into consideration. Lenders will look at your overall level of income as well as your monthly outgoings, and they will take these factors into account when determining your eligibility.

    As expected, your student loan will be included within your outgoings, as will your household expenses and any other types of debt that you owe, including credit card debt and any type of personal loans that are outstanding, such as anything pertaining to car finance.

    Your credit history can also have an effect on your mortgage application although you will be glad to know that your student loan information won’t show up on your credit file.

    Got a student loan? No worries let's get you a mortgage

    How Does Student Loan Debt Affect Your Mortgage?

    As suggested, getting a mortgage will be possible for you, despite your student loan debt. However, student loans can still have an effect on a mortgage and the mortgage repayments which we explain further below.

    1. The size of your debt repayments

    Generally speaking, the more money you owe on your student loan, the less money mortgage lenders will be willing to lend to you.

    However, this is in terms of your monthly repayments rather than the total size of your student debt. So, a customer with £2000 student debt and a customer with £10,000 student debt might still be able to borrow the same amount of money, provided they are on a similar income and making the same amount of loan payment each month.

    After taking the size of your monthly repayments into account in relation to your earnings (the debt-to-income ratio), the lender will be able to assess how much they are willing to lend to you.

    2. The impact on your take-home pay

    Unlike traditional forms of debt, such as car loans and credit card debt, your student loan repayments will be taken from your monthly wages. This is the same way as your national insurance contributions which are deducted automatically from your monthly take-home pay.

    After looking at your payslips and taking your other monthly outgoings into account, lenders will determine how much you will be able to afford on your mortgage repayments each month.

    The larger your net pay (after everything has been deducted), the higher the likelihood that the lender will offer you more money. The reverse is true if your take-home pay is reduced because of your student loans and other deductions.

    Do You Need to Declare Your Student Loan When Applying for a Mortgage?

    Yes! If you aren’t transparent about your finances when completing your mortgage application, you are committing mortgage fraud. Your application will be turned down if it is discovered that you have intentionally lied, and other consequences could also be.

    As a mortgage broker with over 30 years of experience, it is our observation that it is essential that you declare your student loans and any other loans you might have when filling out the expenditure box on your mortgage application form.

    We have come across a few new clients that have had a mortgage declined prior to coming to us as they thought it not important to include due to only having a small student loan repayment.

    It is important to be accurate as most mortgage lenders cross-reference the information. If you are a PAYE employee, the lender will check your payslips, and if you’re self-employed, the lender will review your tax year overviews and income tax calculations.

    The only exception is if you are earning under the student loan payment threshold. You won’t need to enter your loan repayments on the form if this applies to you but you should still let your lender know about any student loans you have. If your income rises and you have to start making repayments on your student loans, you should let the lender know about your change of circumstances.

    Got a student loan? No worries let's get you a mortgage

    What If You’re Under the Student Loan Repayments Threshold?

    If you are under the student loan repayment threshold and therefore not making any student loan repayments, this will not affect your chances of getting a mortgage.

    However, as we suggested already, you will need to tell your lender when you do go over the repayment threshold so as to remain transparent. This shouldn’t affect your mortgage as your student loan payments won’t exceed the level of income you are earning so the mortgage lender will still be satisfied that you are able to make the monthly repayment on your mortgage.

    Should I Pay off My Student Loan to Help My Mortgage?

    Before applying for a mortgage, you might assume paying off your student loan is a good idea. If you are in a position to do this, there are benefits. However, it’s not something you necessarily need to worry about if you can already get a favourable mortgage deal, despite having an existing student loan.


    • Peace of mind. With one less expense to cover each month, you would have one less thing to worry about. This is just one reason why paying off your student loan (as well as clearing personal loans) is a good idea as you wouldn’t have the burden of added financial stress.
    • More money for your deposit. If you could clear your student loans before applying for a mortgage, you would have more free money in your bank account. You could put this towards your mortgage deposit as the more you can pay towards this, the greater number of lenders and mortgage options will be made available to you. You should qualify for a mortgage with a lower rate of interest with most lenders too.
    • A greater net income. If you were to pay off your student loan, this would be one less thing coming out of your wage slip each month, and as such, your net income would be higher. You increase your chances of mortgage approval if your net income is larger and lenders should offer you a deal at a better mortgage rate too.


    • A dint to your finances. If you have the ability to pay off your student loan in one lump sum and put down enough money for a larger deposit, then paying off your loan can be a good idea. But if paying it off means you have less money for your deposit, you could rule out your chances of lenders offering you a mortgage with the lowest interest rates.
    • Less opportunity to clear other debts. It’s sometimes better to prioritise your other debts before your student loans. This is because your other debt, such as a personal loan, can have an effect on your credit rating and this could affect your eligibility for a mortgage and the size of your mortgage payments. As such, if you can still afford to make payments towards your student loans each month, which don’t affect your credit file, you might want to pay off any personal loans you have instead. This will positively affect your credit report and improve your chances of mortgage approval.
    Got a student loan? No worries let's get you a mortgage

    Consolidation of Debts

    Debt consolidation is one way to refinance your debts. It’s the process of combining your outstanding debts into one single loan and it can be beneficial in a number of ways.

    For one thing, you would only have one monthly repayment to worry about, so that means no more juggling multiple loan payments each month. You can often benefit from a lower interest rate too, so that can make the loan more affordable for you. And as you would reduce the chances of making a late payment if you only had one loan to worry about, you could positively affect your credit history.

    People often ask does a student loan count as a debt for consolidation purposes. The answer is yes! This is a good idea if you want to make your life financially easier and you’ll be pleased to know that it’s possible to consolidate student loans for mortgage purposes!

    You would benefit in all the ways we suggested earlier, such as having one less payment to worry about each month. Many lenders will allow you the opportunity to consolidate your student loan so it is something worth considering.

    You may have to stretch your mortgage over a longer-term, however, so this might not be something worth considering if you are already nearing the end of your student loan term. As the outstanding balance of your student debt will be written off automatically when your term ends, you may want to stick to your student loan payment schedule until it naturally clears rather than consolidating it into a mortgage.


    In answer to the question, does student loan affect mortgage chances, the answer is clearly yes but that doesn’t mean lenders will turn you down your application when you’re interested in getting a mortgage.

    Borrowing money shouldn’t be a problem for you, provided you have a track record of making your student loan repayment each month, have the means to accommodate an extra loan, and can prove to the lender that you will be able to keep up with your mortgage payments.

    You may be asking ‘will a student loan affect my mortgage lender’s decision? Most mortgage lenders will consider you if you have a positive financial profile and they might let you consolidate by rolling your student loan into your mortgage.

    To improve your chances of getting a mortgage, with or without a student loan, you should do what you can to improve your finances, perhaps by finding a way to get a pay rise or by reducing your monthly expenditure (or doing both).

    You should do what you can to improve your credit history too, perhaps by clearing your other debt if you have any other loans outside of your student loan.

    By taking these steps, you should be able to get a mortgage but to improve your chances further, speak to a mortgage broker such as ourselves as we will give you the professional advice you need to both get a mortgage and qualify for a better mortgage deal.

    We have a lot of experience with student loans and how they affect mortgage applications. Our observation is that mortgage lenders will take into consideration your income and your affordability to pay the mortgage before making a decision. Our expert mortgage advisers will know which lender will be best for your individual circumstances. – Stephen Roberts (Director)

    Got a student loan? No worries let's get you a mortgage

    How YesCanDo Money Can Help

    If you have been asking ‘will a student loan affect my mortgage chances,’ we hope we have answered your question. But if you would like more mortgage advice, get in touch with a mortgage advisor at YesCanDo Money today.

    Whether you’re a first-time buyer looking to get on the property ladder or somebody who is looking to move house, we are here to give you the mortgage advice you need. After getting in touch with us using the contact details on our website, you will be given an appointed representative who will help you throughout every step of your mortgage journey.

    They will let you know how much deposit you should put down to qualify for the best mortgage deals, and they will search for these deals on your behalf to make life easier for you. And as we have access to more lenders than you see advertised on your local high street, your advisor will be able to search for those deals that might be better for you.

    So, don’t let the fact you have a student loan put you off your hopes of getting your dream home. With our help, you will get a mortgage that is right for your needs, with the lowest rates of interest you are eligible for to reduce your mortgage debt. We will do this for you for FREE, so you are guaranteed to save money if you decide to use our services.

    If you have any questions at all, get in touch with our mortgage experts who will be happy to help.

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    Megan Stoyles (CeMAP)
    Megan Stoyles (CeMAP)

    Megan CeMAP is a dedicated Mortgage & Protection Adviser at YesCanDo Money. With her fresh and approachable style, she specialises in guiding clients through the mortgage process, whether they're first-time buyers, home movers, or interested in buy-to-let. Megan's passion for helping people find their dream homes and ensuring their financial security sets her apart.

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