How Credit Card Debt Affects Your Mortgage Application in the UK

When applying for a mortgage, most people focus on their income and deposit. But one key factor that often catches applicants off guard is credit card debt. In the UK, lenders carefully review your credit usage, especially how much you owe on credit cards — and it can directly impact both your chances of approval and how much you’re allowed to borrow.

In this guide, we’ll explain exactly how credit card debt affects mortgage applications, what lenders are looking for, and what you can do to strengthen your application even if you have balances to repay.

Do Mortgage Lenders Look at Credit Card Debt?

Yes. UK mortgage lenders take credit card debt seriously when assessing your affordability and risk profile.

They review your:

• Total outstanding credit card balances

• Monthly minimum repayments

• Credit utilisation (how much of your available limit you’re using)

• History of on-time or missed payments

Lenders factor these into your debt-to-income ratio, which measures how much of your monthly income goes towards repaying debt. If you’re carrying significant credit card debt, it can:

• Reduce the amount a lender is willing to lend you

• Trigger a higher mortgage interest rate

• Cause your application to be rejected

How Much Credit Card Debt Is Too Much?

There’s no fixed threshold that applies to all lenders, but some general rules of thumb include:

• Using over 50% of your available credit is often seen as a red flag

• Credit utilisation above 30% may start to lower your credit score

• Multiple cards with high balances can indicate poor financial management

For example, if you have a £5,000 credit limit and you’re using £4,000 of it, that’s 80% utilisation — which can significantly harm your credit score and concern mortgage lenders.

How Lenders View Credit Card Debt vs. Loans

Many borrowers are surprised to learn that credit card debt is often viewed as riskier than a fixed personal loan. That’s because:

• Credit card debt is revolving, meaning it can grow

• Minimum repayments are lower, so it may take longer to repay

• It's easier to overextend yourself with cards than loans

A £3,000 personal loan with fixed repayments may be seen more favourably than £3,000 across credit cards with no repayment plan.

Will Paying Off My Credit Cards Help My Mortgage Application?

Absolutely. Reducing or clearing your credit card balances before applying for a mortgage can:

• Increase your credit score

• Improve your affordability calculation

• Show lenders you manage debt responsibly

• Boost your chances of being approved for better rates

What if I Can’t Clear My Balances?

If you can’t pay them off fully:

• Aim to reduce utilisation to under 30%

• Stop using the cards temporarily

• Avoid applying for new cards before your mortgage application

You may also consider consolidating your credit card debt into a personal loan if it lowers your monthly outgoings.

How Does Credit Card Usage Affect Your Credit Score?

Lenders check your credit score through one or more of the UK’s credit reference agencies:

• Experian

• Equifax

• TransUnion

Your credit card usage affects your score based on:

• Your credit utilisation ratio (the lower, the better)

• Your repayment history (missed payments can stay on your file for six years)

• The age of your accounts (older accounts help)

• The number of recent applications (too many can be a red flag)

Tip: Use a service like:

• https://www.moneyhelper.org.uk/en/everyday-money/credit-and-purchases/check-your-credit-report

What If I’ve Missed Payments on My Credit Cards?

Missed or late payments can harm your mortgage chances, especially if:

• The missed payments were recent (within the last 12–24 months)

• You have multiple late payments or defaults

Even if your overall score is decent, recent missed payments can lead to:

• A higher interest rate

• A declined application

• A requirement for a larger deposit

Read our guide on: What Credit Score Do You Need for a Mortgage in the UK?

Can You Get a Mortgage with Existing Credit Card Debt?

Yes — but how much you owe and how you manage that debt will affect your approval chances. You’ll likely have more success if:

• Your credit card utilisation is below 30%

• You’ve made consistent, on-time payments

• You have stable income and low overall debt levels

• You’re not applying for new credit before your mortgage

Unique Insight: Lenders Often Factor in the Full Credit Limit — Not Just the Balance

Even if you have a zero balance, some lenders consider your total available credit when assessing affordability.

For instance:

If you have three credit cards with a combined £15,000 limit, even if your balances are zero, a lender may still treat that as accessible credit — especially if you're a first-time buyer or applying for a high Loan-to-Value mortgage.

This varies by lender, but it's worth knowing when planning your application.

Should You Close Credit Card Accounts Before Applying?

This can be a double-edged sword:

• Pros: Reduces available credit, which some lenders prefer

• Cons: Can shorten your credit history and increase utilisation if you carry balances on other cards

Only close unused cards if you have multiple open accounts with high limits and you’re not relying on the card’s history to maintain your credit score.

How to Prepare for a Mortgage if You Have Credit Card Debt

Step-by-Step Tips:

1. Check your credit reports across all three major agencies

2. Create a repayment plan to lower or clear balances

3. Avoid applying for new credit in the 3–6 months before applying for a mortgage

4. Use a mortgage broker if your credit profile is complex

5. Speak to a lender in advance to understand their criteria

Related Reading

• Read our guide on: What Credit Score Do You Need for a Mortgage in the UK?

• Read our guide on: Can You Get a Mortgage with Bad Credit in the UK?

• Read our guide on: How to Improve Your Credit Score in the UK

• Read our guide on: First-Time Buyer Mortgage Checklist

FAQs: Credit Card Debt and Mortgages

Will lenders reject my application just for having credit card debt?

Not necessarily — it depends on how much you owe, your income, and how well you manage repayments.

Does it help to pay off my credit card the month before I apply?

Yes — but allow time for your credit report to update. Ideally, pay it off 1–2 months in advance.

What if I only make minimum payments?

This signals to lenders that you may be financially stretched. It’s better to pay more than the minimum when possible.

Can I consolidate my debt before applying for a mortgage?

Yes — consolidating into a lower-interest loan can improve affordability, but avoid applying for too much new credit at once.

Should I close old credit card accounts?

Only if you have high limits you no longer use. Otherwise, keeping them open (with low or no balances) may help your credit score.

Final Thoughts

Credit card debt doesn’t automatically stop you getting a mortgage — but how you manage it can make or break your application. Reducing balances, maintaining on-time payments, and staying below 30% credit utilisation can all help boost your chances.

Plan ahead, check your credit reports early, and seek tailored advice if your situation is complex. With the right steps, you can still qualify for a mortgage — and potentially secure a better deal.

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