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Student Loans and Mortgages

Does having a student loan affect a mortgage application in the UK? Get the right advice here!

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: April 19, 2022

As student debt continues to increase due to spikes in university fees, there’s no doubt that student loans and mortgages are currently – and will continue to – affect millions.

With this in mind, we’ve come up with a comprehensive guide that will help you get the best out of your student loan mortgage options.

Can you get a mortgage with student loans?

Having student loans shouldn’t prevent you from being able to get a mortgage, although lenders will take the debt into account. Unlike other debt, student loans don’t appear on your credit report but, depending on the level of debt you have to repay each month, have a student loan could impact affordability checks every lender carries out.
To put yourself in the strongest position for getting a mortgage, especially if you have a lot of student debt, a healthy deposit, a solid income and a good credit history will all help support your mortgage application. The better you look as a borrower, the more lenders will be available and the better the chance of a competitive rate.

Do student loans affect a mortgage application?

Although student loans aren’t usually handled with the same terms and conditions as other forms of borrowing, that’s not to say it has no relevance to your financial profile. For example, it’s very common for people to assume that because the debt has no impact on your credit file; they wrongly believe that student loans and mortgages will have no correlation with each other.

With this in mind – coupled with other basic criteria many lenders expect before they underwrite a mortgage such as Income, work history and more – you would not be wrong in thinking that it can often be complex to make your way on and up the property ladder.

To ensure you get your ‘yes’ however, take advantage of our free expert broker services and make an enquiry, or you can hop on the live chat available on our site to find out more. Prefer to interact with a friendly voice via telephone? No worries at all, you can call us on 0808 189 2301 as well.

Did you know… You could access 30% more of the mortgage market with a broker on your side – Get Started with an OMA-Expert to find out how much this could save you and unlock more deals.

How does a student loan affect a mortgage application?

Customers often ask us “will a student loan affect my chances of getting a mortgage?” and “does having a student loan affect mortgages?” and as we explained earlier, while student loans debt is not viewed in the same way as other types of borrowing, the majority of lenders will still ask you about it when applying.

This is to check two key things:

  • How much your repayment is each month and changes your income
  • How much you have left to repay

Looking at how much your repayment is each month while considering student loans and mortgage qualification comes into play because student loans are deducted automatically from PAYE salaried workers.

On payslips, it will be shown in the same way as National Insurance Contributions and other taxes, which are predetermined according to your pay. What you are left with afterwards would be your net pay and in turn, what can be considered by lenders as a part of the money you have available to pay off your mortgage.

Essentially, in the eyes of most lenders – like all other expenses accounted when trying to get a mortgage – student loan debt could affect what you are able to afford.

Your mortgage debt to income ratio with student loans is not the only key thing you should be mindful of though. How much you have left to repay on your student loan is also considered because it’s still noted as a form of  “outstanding debt” – despite it not changing your credit history. With these points acknowledged, it’s risky to disregard student loan impact on mortgages.

However, don’t let that be too much of a concern or put you off, as there is help at hand and you’re in the right place. No need to hesitate in making an enquiry as our mission is to get all who do the right assistance from expert brokers.

Applying for a mortgage with student loan debt: Do you have to declare it on an application?

The first thing we need to address about student loan mortgage applications is the issue of whether it makes sense to declare it.

Going back to what’s been said about lenders looking into your income and outgoings as a standard means of checking affordability, for those who are PAYE workers especially there is no escaping declaring your repayment contributions.

For instance, nearly all lenders look at your payslips as a part of this process and the repayments are stated on them. For those who are self-employed, you won’t show them on your invoices but it’s legally expected – if over a certain threshold of income – for you to declare and make repayments.

When you are requested to show your accounts to lenders, this will appear as one of your expenses too, and so will be taken into consideration.

So, no matter how you view it, you’re likely to declare it, whether it’s done actively or not.

The best way to get all of your questions answered is to reach out and get in touch, that way you can be assured of the options available to you.

Should I pay off my student loan or my mortgage first?

As we all hope to live debt-free, many often are faced with choices on which are the most important debts to clear first. If you’re one of the many people asking “should I pay off my student loan or my mortgage first?” You should weigh up the implications of both.

The downside of delaying paying off your mortgage as early as possible is that you will end up paying more interest in the long run. If you have the means to pay off your mortgage early but choose not to, this could mean missing out on great benefits such as having an asset/investment in property and other things like profit from rent or selling if you decide to go down that avenue.

Looking at the downside of not paying off student loans, we must recall what we mentioned about how this type of borrowing is viewed differently and usually involves lower interest rates, longer repayment times/allowances and doesn’t affect credit.

However, if you took out a loan from a bank for postgraduate studies for example, these types of loans are different to standard student loans and their terms and conditions determined by the lender. In these instances flexibility may be limited and paying off your loan may be a priority depending on your circumstances.

To get support making the right choice for you, we can help so please ensure you contact us.

How to get a mortgage with student loan debt

How to get a mortgage with student loan debt is something many of our customers want to know and there are several ways to do it. Like with all mortgages, the first thing you need to do is focus on getting your application right, which we will expand on in more detail later.

As previously mentioned, in most cases student loan debt is not going to decrease your chances of getting a mortgage but that doesn’t mean there’s nothing to take into account.

Important housekeeping to do is to make sure your credit history and other important financial affairs are in order, such as clearing debts from credit cards and other bills if outstanding, ensuring your deposit is sufficient for your lender’s criteria and ensuring you pass affordability checks by being able to prove income.

While it goes without saying that for many this is no easy task, there’s always help at hand if you register your interest with us.

Student loan mortgage application: Getting approved for a mortgage with student loans

Lenders’ views on student loans on mortgage applications are often far from bleak, so don’t be discouraged. The good news is it’s generally proved that graduates end up being higher earners and therefore are more likely to be approved for a mortgage.

The bad news is, this is also subjective to how much student debt you have and/or have borrowed from other creditors since and if your student loan was to fund postgraduate education and borrowed from a bank.

With that said, getting approved for a mortgage with standard student loans should not be at the top of the list of things to consider when making an application.

This is mainly due to the fact that the student loan debt itself is wiped after 30 years anyways – paid in full or not.

Getting a mortgage with defaulted student loans

All student loans are paid back at the same low-interest rate of 9p out of every pound you earn – if taking home over £25,000 a year – so many on low or average incomes end up getting a mortgage with defaulted student loans.

The majority of lenders place more importance on other lending and credit history, such as credit cards than this type of loan. If you have defaulted on other payments, for example, this is much more likely to work against you. So if you have outstanding debts, especially if they have impacted your credit score, it would be best to get those arrears paid off to increase your chances of approval.

To find out more about how to get a mortgage with bad credit using the resources on our site. You can also get in touch to get the support you need in your application process too.

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Using student loans to pay a mortgage

Another important question we get asked by students is: “does a student loan count as income for a mortgage?” 

Many believe that without a steady income you are more likely to be declined a mortgage and frankly, they are technically right and wrong. As a student, you may be unemployed due to your studies and of course this will be reviewed as a part of your application while it’s checked if you can afford your mortgage payments. However, if you do have a source of income that can be proved and/or are employed, you no doubt make your application more attractive to lenders.

While it’s not impossible to solely use your student loans to pay towards your mortgage, to achieve this you’ll have to be smart about how you save for your deposit with this “income”. Some first-time buyers who are students have taken advantage of government schemes like Help To Buy ISAs and also Lifetime ISAs, although the Help to Buy: ISA scheme is now closed. Read our guide for more information.

Help To Buy is a scheme that is set up by the government to help first-time buyers get on the property ladder by providing 20% of the deposit for their home, asking for only a further 5% of the contribution from the buyer. Putting your money into a Help To Buy ISA or a Lifetime ISA is a good way to ensure you get your side of the bargain quickly if you are eligible for one.

If you want expert advice on the best ways to save your deposit and what you need to make your student loan mortgage application a success, make an enquiry to get guidance from one of the specialist brokers we work with.

Did you know… An Online Mortgage Advisor broker has access to more deals than any comparison site. Get Started to unlock more options and increase your chance of mortgage approval.

Consolidate student loans with a mortgage

If you are interested in finding a way to consolidate student loans with your mortgage there are a handful of things that you should keep in mind. While many use the method of consolidating loans to make their debts easier to manage, by putting them into one – usually lower interest loan – that principle makes rolling student loans into a mortgage a tempting prospect.

To answer the question of whether you can you consolidate student loans with a mortgage, it’s a yes, as it still counts as borrowing and requires repayments, despite more relaxed rules surrounding them.

Although most lenders are open to letting customers refinance student loan debt into mortgages, that could be subject to your credit history if you get an “unsecured” loan, which is approved on your creditworthiness. If a secured loan your debt will be held against an asset – in these instances likely your property – which could be a risk.

To find out more make an enquiry.

Will my student loan affect me getting a mortgage in Scotland?

Despite Scotland having different rules, when it comes to student loans, the guidelines to getting a mortgage with student loan debt are under the same principles. For example, the general standard across the UK is that loans will not affect your credit history. Your overall financial profile is what will be assessed in detail.

Need more information on this, let us know and you’ll be in safe hands as we will connect you to an expert whole-of-market broker.

What to do if you can’t get a mortgage because of student loans

If you can’t get a mortgage because of student loans – regardless of your circumstances – don’t lose hope because there are often many ways around it. Also, there may be lenders out there that would approve your application, and with the help of a whole-of-market broker, you will stand the best chance of finding them.

Stronger applications are the thing to aim for, for all who have been turned down for a mortgage. Even if you’re worried about being declined when getting a mortgage with defaulted student loans or any other student debt issue, reach out. The worst thing you can do is continue to apply with multiple lenders as each one is counted on your credit and if all are refused it can have a negative impact on it.

Where to find a mortgage broker for student loan mortgages

With so much inaccurate information floating around, we’re here to cut through the white noise and get you to the right place. If you have questions and concerns about where to find student loan mortgages that work for you and would like support, register your interest with us, so we can match you with an expert that suits your needs and circumstances.

Using our services will not impact your credit rating and, of course, it won’t cost you a penny to enquire.

Speak to a student loan mortgages expert

If you have questions about student loans and mortgages and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.


Student loan debt vs mortgage debt: Which is more important to clear?

When deciding which to clear first you should consider which has the most impact on your financial profile, as well as which is more feasible to do in your circumstance.

If your student loan was borrowed from a bank, for example, you may want to pay it off sooner rather than later as they can often have high interest rates. This doesn’t apply to standard undergraduate student loans, which are low interest.

In regards to your mortgage owning your property and clearing your mortgage could be a great asset to use to get yourself out of other debts. Weigh up the pros and cons while speaking to an expert broker, and you will have a good indication of what’s best for you.

How much deposit do I need to save for a student loan mortgage?

Like with any mortgage application the biggest the deposit the better your chances of paying lower interest rates and getting approved. Getting a mortgage with student loan debt is no different in that respect, so your options are almost always the same.

If you’re looking to put down a smaller deposit schemes like Help To Buy set up by the government to help first time buyers get on the property ladder by provides 20% of the deposit for their home, while they contribute just 5%.

Do student loan repayments affect mortgages?

In the eyes of lenders student loan debt could affect what you are able to afford depending on your debt to income ratio with student loans. When they look at how much your repayment is each month student loan repayments are noted because they are deducted automatically from PAYE salaried workers.

This is done to calculate your net pay and in turn what can be considered as income and affordability.

Can I get a Virgin Money mortgage with student loan debt?

Virgin money are similar to most in that they look at your debt to income ratio with student loans via repayments as a way to determine if you meet their affordability criteria. Keep in mind that’s one part of a list of things you have to meet  to increase your chances of a successful application, so it’s always good to get support.

Will I qualify for a mortgage with student loan debt?

To get an exact answer is dependant on many factors in your individual circumstances but for the majority it’s more than possible and options are wide and varied.

Do you best to make sure you get your ‘yes’ by making an enquiry today.

Ask a quick question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

Ask us a question and we'll get the best expert to help.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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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