Myth-busting mortgage hurdles

Mortgage myths that can derail your plans (and what’s usually true instead)

Buying a home can feel like a maze of “rules” you’ve heard from friends, family, or online. The problem is that mortgage decisions are rarely as simple as a single headline like “you need a 20% deposit” or “bad credit means no mortgage”.

In this guide, we break down common mortgage hurdles and explain the reality behind them—so you can focus on what lenders typically look at and how to avoid unnecessary delays.

Myth: You need a huge deposit (at least 20%)

Reality: A larger deposit can improve your options, but it’s not the only route to a mortgage.

Many buyers use mortgages with lower deposits. Lenders often discuss deposit size in terms of loan-to-value (LTV)—the relationship between the loan amount and the property value.

Common examples you may hear about include:

• Higher-LTV options (where the deposit is smaller than 20%)
• Government-supported routes (where eligible), such as Shared Ownership or other schemes designed to help buyers with smaller deposits

What to remember: the deposit affects pricing and availability, but it doesn’t automatically rule you out.

Myth: You need a perfect credit score

Reality: Lenders don’t usually make decisions based on a single “score” number.

Instead, they consider your credit history as a whole, including patterns like:

• whether payments have been made on time
• how much credit you have used
• any defaults or missed payments
• how long accounts have been active

Even if your credit file isn’t spotless, you may still have options—particularly if the issues are older, explained, or you’ve improved your situation since.

What to remember: improving your credit behaviour can help, but it’s not always an all-or-nothing test.

Myth: Self-employed people can’t get mortgages

Reality: Self-employed applicants can often qualify, but the evidence required may be more detailed.

Because income can be less predictable than a standard salary, lenders typically want to understand:

• how stable your earnings are
• what your income looks like over time
• whether your business is sustainable

Depending on your circumstances, lenders may request documents such as:

• accounts and/or tax returns
• evidence of income and expenses
• bank statements
• references or supporting information from relevant professionals

What to remember: it’s not “self-employed = no mortgage”; it’s usually “prove income stability clearly”.

Myth: Student loans will disqualify you

Reality: Student loan repayments are usually treated as a monthly liability within affordability calculations.

That means the lender may factor in your expected repayments when assessing whether you can afford the mortgage alongside your other outgoings.

What to remember: student loans are often considered, not automatically excluded.

Myth: You should always choose a fixed-rate mortgage

Reality: Fixed rates can offer certainty, but the “best” choice depends on your plans and the wider interest-rate environment.

Some buyers prefer fixed deals to reduce uncertainty. Others may consider variable options if they expect circumstances to change or if the structure suits their risk comfort.

Key decision points often include:

• how long you plan to stay in the property
• whether you’re comfortable with payment changes
• whether you might move, refinance, or make overpayments

What to remember: fixed vs variable isn’t a moral choice—it’s a fit-for-purpose decision.

Myth: You can’t get a mortgage with bad credit

Reality: Bad credit can reduce options, but it doesn’t always mean “no”.

Some lenders specialise in more complex cases, and the outcome often depends on factors such as:

• the type of credit issue (e.g., late payments vs defaults)
• how recent it is
• whether you’ve maintained good conduct since
• your overall income and affordability

What to remember: the same label (“bad credit”) can cover very different situations.

Myth: First-time buyers can’t get on the property ladder

Reality: First-time buyers often have access to support and alternative routes.

Depending on the property type and your circumstances, options can include:

• Lifetime ISA (LISA) or Help to Buy ISA (where applicable)
• Shared Ownership, where you buy a share and rent the remainder
• First Homes style schemes on selected new-build properties

What to remember: “first-time buyer” doesn’t mean “limited to one mortgage type”.

Myth: Changing jobs means you can’t get a mortgage

Reality: Job stability matters, but a change of employment doesn’t automatically stop you.

Lenders commonly look for evidence such as:

• recent payslips
• an employment contract
• continuity of income (and sometimes the nature of the role)

If you’ve moved jobs, the key is often whether your income is sufficient and credible and whether the lender can assess affordability properly.

What to remember: a new job can still work—especially if the income is clear and consistent.

Myth: Your current bank is the best place to get a mortgage

Reality: Loyalty doesn’t always translate into better mortgage terms.

Mortgage deals vary by lender and product, and what suits one buyer may not suit another. A broader search can help you compare:

• interest rate structures
• fees and charges
• repayment options
• product features (such as overpayment allowances)

What to remember: comparing options can uncover routes you wouldn’t see by staying put.

Myth: You can’t overpay without penalties

Reality: Many mortgages allow overpayments, sometimes up to a limit, without an early repayment charge.

Overpayment rules vary by product, but common themes include:

• an annual overpayment allowance
• restrictions on how overpayments are made
• potential charges if you exceed the permitted amount

What to remember: overpaying may be possible—check the terms of your specific mortgage.

Myth: Bankruptcy or debt problems permanently block mortgage applications

Reality: Serious credit events can affect mortgage availability, but they don’t always create a permanent “no”.

Specialist lenders may consider applications after a period, particularly where you can demonstrate:

• time since the event
• improved financial conduct since
• stable income and affordability

What to remember: lenders often assess recovery and current circumstances, not just past events.

Myth: Renting is always cheaper than buying

Reality: Renting can be cheaper in the short term for some people, but it isn’t automatically cheaper overall.

When comparing renting vs buying, it helps to consider:

• monthly housing costs (rent vs mortgage repayments)
• upfront costs of buying (deposit, fees, and other purchase-related expenses)
• long-term value (building equity over time)
• how rent may change in the future

What to remember: buying can be more expensive at the start, but it may offer benefits that renting doesn’t.

The common thread behind most mortgage “hurdles”

Many myths persist because they treat mortgage lending like a single rule. In reality, lenders typically weigh up a combination of factors, such as:

• affordability (income vs outgoings)
• deposit and LTV
• credit history and conduct
• the type of income (salary vs self-employed)
• the property and the mortgage product structure

When you understand what’s actually being assessed, you can avoid wasting time on assumptions.

If you’re unsure which myths apply to you

If you’re worried about your deposit, credit history, income type, or past financial events, the most useful next step is to clarify your situation and ensure your application is supported with the right information.

That way, you’re not just “hoping” the hurdle is cleared—you’re addressing the factors that lenders typically focus on.