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Mortgage rejection stats revealed

Mortgage rejection stats revealed
Mark Langshaw

Author: Mark Langshaw - Content Manager

Updated: June 30, 2022

One in six (16%) mortgage holders have overcome being rejected for a mortgage in the past, highlighting that getting a home loan is not something to be complacent about.

Research found that over half (54%) of homeowners who were rejected took longer than three months to be accepted for another mortgage.

Not only can getting turned down significantly delay the process of buying a house, it can affect your credit score when applying for a mortgage again.

There are a host of reasons for being rejected. Mainstream lenders can turn you down for having a lower than acceptable credit score, or you might simply be trying to borrow too much.

The research from Which? certainly highlights the importance of getting advice to boost your chances of securing a mortgage for the amount, term and price that you expect.

Important

Find out how we can help if you have been refused for a mortgage.

Young people and Londoners need help the most

Younger homeowners are more at risk of being rejected perhaps reflecting a lack of time to build up a strong credit profile.

Four in 10 (41%) 18 to 24-year-old homeowners have experienced a mortgage rejection before buying their current home.

That compares to 15% of 35 to 44-year-olds and 8% of those aged 45 to 50.

Regionally people living in London (29%) and the West Midlands (22%) are most likely to be turned down for a mortgage.

How to ensure you’re not rejected

Getting whole of market advice from an advisor will improve your likelihood of being granted a mortgage as they have the experience and knowhow to understand when a lender will lend to you.

Since the introduction of the Mortgage Market Review in 2014 mortgage lenders have had to stress test affordability stringently, as you have to demonstrate that you could still afford to pay the mortgage if interest rates go up.

While this gives you peace of mind that you can afford the payments in future, it means lenders are stricter than in the past about lending to you.

If you have less than perfect credit there are lenders that will value you as a customer, but you may have to rule out some other lenders.

Knowing where you stand is vital.

It’s worth applying for a mortgage in principle before you attempt to buy a house so you’ll know how much you can afford.

You don’t want to get anyone’s hopes up – whether it’s the seller or yourself if you fall in love with a property.

Getting rejected for a mortgage can be avoided if you take all the necessary steps.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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