Credit Score Basics > How to check your eligibility for a mortgage

How to check your eligibility for a mortgage

Wollit Team4 minute read · Updated 24th September 2024

Getting a mortgage is an important step if you’re looking to buy a home in the UK. 25% of all the Brits have a mortgage, while only 15% rent.

However, figuring out if you qualify can be tricky. Different lenders have different rules, and your age, income, job status, credit score, and deposit size all play a role.

Here is how a mortgage in the UK works, how to check if you’re eligible for one, and what to do next.

What are the basic mortgage eligibility requirements?

To get a mortgage in the UK, you’ll usually need to tick these boxes:

Your age. You will need to be at least 18 years old. Also, most lenders will have an upper age limit by the time your mortgage ends, usually around 70-75 years old.
Your income. Some lenders require a minimum income of £10,000 to £25,000, and most will assess whether you can actually afford the repayments.
Whether you’re employed or self-employed. Having a permanent job is generally better than having a temporary or zero-hour contract. If you're self-employed, you may need to show more documents like the last two years’ tax returns.
Your credit score and credit history. A higher credit score and a lack of recent missed payments or other “adverse events” usually means you have a better chance of getting approved for a mortgage.
How much deposit you can afford. A larger deposit can improve your chances of getting approved and might even get you better interest rates.

How does my credit score affect my mortgage eligibility?

Your credit score is one of the most important factors when applying for a mortgage in the UK.

Each lender has its own rules for what they consider a good credit score but you should aim to be at least in the “Good” credit score band with the three main credit reference agencies (Experian, Equifax, and TransUnion).

You can find your credit scores and whether you’re in the “Good” banks for free using Experian, ClearScore (for your Equifax score) and Credit Karma (for TransUnion).

Also, if you have recent bad marks in your credit report, like missed payments or County Court Judgments (CCJs), this could hurt your chances of getting approved.

However, some lenders might overlook small issues if other parts of your application are strong.

This is why, before applying for a mortgage, it’s smart to check your credit score and make improvements if needed. This can include paying off debts, making sure bills are paid on time, and avoiding new debts right before applying.

Can I get a mortgage with bad credit?

Yes, it’s possible to get a mortgage with bad credit, but it may be harder. Some lenders focus on helping people with poor credit histories but often charge higher interest rates or have stricter conditions.

How can I check my mortgage eligibility?

To find out if you're eligible for a mortgage in the UK, follow these steps.

First, get all your documents together, especially proof of income (payslips or tax returns), and bank statements that show your spending habits.

Next, take advantage of the many online calculators and eligibility checkers out there. Many banks and financial websites have online calculators that help estimate how much you can borrow, based on your income and deposit size.

You should also talk to a mortgage broker. They can give you personalised advice based on your financial situation and help you understand different lenders' requirements.

Finally, try to get an Agreement in Principle (AIP) as well. This is a quick check that shows how much a mortgage lender is willing to offer you. It’s not a formal mortgage agreement, but it doesn’t affect your credit score and it can give you a good idea of what you might be able to borrow. It also serves as an indication that you’re a committed buyer, meaning that many sellers will expect you to have one in hand.

What documents do I need for my mortgage application?

You’ll usually need:

Proof of identity (passport or driving licence);
Proof of income (payslips, recent P60 and P45, tax returns, or an SA302 form if you’re self-employed);
Recent bank statements from the past 3-6 months;
And any documents regarding existing debts or other financial obligations.

What do lenders look at when deciding eligibility?

When you apply for a mortgage, lenders will want to see three things: that you fulfil the basic requirements, that you can actually afford the mortgage, and that you’re likely to make payments on time.

This means that lenders will look at:

Your regular bills (like rent, utilities, and loans) to see if you can afford monthly mortgage payments along with these costs.
Your income-to-loan ratio. The amount you want to borrow compared to your income is crucial. Most lenders use income multiples (usually between 4-5 times your annual salary) to figure out how much they will lend.
The type of property. Some properties may not qualify for certain mortgages due to their condition or type (like flats under specific schemes). Lenders will check if the property meets their lending criteria.
And your credit history. Lenders will want to see whether you’ve been making payments on time and whether you’ve been handling debt responsibly.

This final point is why it’s so important to work on building a strong credit history. In the UK, a good credit score can open the doors not only to affordable mortgages, but also to great credit cards with rewards, personal loans with generous terms, and even things like low premium insurance.

Luckily, now there are many apps that can help you build and improve credit.

One such app is Wollit. Wollit is an app available both on Android and iOS, and it works by reporting a fixed-fee monthly subscription as a loan repayment to all three credit reference agencies. This helps you build your credit history and directly influences your credit score.

On top of this, Wollit can also report your monthly rent payment to Experian. This can add another line in your credit report that shows lenders that you’re reliable and pay your bills on time, helping you make the most of your rent while you prepare to become a homeowner.