For many in the UK, owning a home remains a major life goal. Indeed, a survey presented by the Financial Conduct Authority (FCA) reports that 55% of non-homeowners aspire to buy in the future. 

Despite what some may call a challenging housing market, this is a clear sign that the dream of homeownership is alive and kicking. 

However, with this ambition often comes a certain level of anxiety. Buying a home is expensive and often requires a mortgage. This can be daunting, particularly if you’re worried about your mortgage application being rejected. 

The FCA goes on to say that some aspiring buyers are already worried about issues surrounding income, debt, or credit that could make it harder for them to secure a mortgage. 

The good news is that you can overcome many of the common reasons a mortgage application may be rejected, either before you apply or after receiving guidance following a rejection. 

Let’s explore why some lenders may say “no”, and what you can do to lower the chances of this happening.

Lenders can reject a mortgage application for multiple reasons 

Lenders don’t tend to reject applications for no reason. In most cases, the decision to lend you money or not comes back to whether you can reliably pay back the loan. If anything makes them doubt your ability to do so, you could face some obstacles. 

Keep reading for some of the most common reasons. 

1. Credit history issues 

Your credit report can play a large part in a lender’s decision-making when it comes to a mortgage application. Factors that could cause problems include: 

• Missed or late payments 
• Defaults or County Court Judgements (CCJs) 
• Making multiple credit applications in short succession
• Having little to no credit history at all. 

You certainly don’t need a perfect score, but the higher the better tends to be the way forward. Ultimately, showing that you have a track record of managing money well is essential.

2. High levels of debt 

Even if you earn a good salary, too much debt can be a red flag in a lender’s eye. That being said, it’s not always the amount of debt you have, but how much you spend on it each month. So, lenders will check how much of your income goes towards repayments for facilities such as credit cards and personal loans. 

A lender’s concern here surrounds your ability to keep on top of your repayments if your monthly commitments are already high. 

3. A low or irregular income 

Even if you don’t have a low income, but your annual and monthly income varies, lenders may raise a few concerns. This might apply if you’re: 

• Self-employed
• On a zero-hours contract
• Working in short-term or temporary roles. 

It’s important to note that this doesn’t mean that you can’t get a mortgage at all. You simply may need additional paperwork to prove that your earnings are reliable.

4. Deposit size

At the end of the day, the more you’re able to put down as a deposit on a property, the safer it is for the lender. With a small deposit, say 5%, you might find that you have fewer mortgage options. And, on the deals that are available, you could encounter higher interest rates, which would increase your monthly repayments. 

Typically, the higher your deposit, the better. This assures lenders that, if something were to happen, they have some financial security against the loan. 

5. Changes to or gaps in your employment 

If you have recently started a new job, a lender may want to see that you have at least passed your probation period before approving you for a loan. Long gaps in your employment record can raise concerns as well, so it’s best to have clear and well-documented explanations for any major changes. 

Where you’re moving from one job to another in the same industry or profession, lenders may be more relaxed about their views, as it’s likely you have experience in that particular sector and pose less of a risk.

6. Property problems 

Sometimes, the issues won’t lie with you at all but rather with the home you’re hoping to buy. Red flags for lenders can include: 

• Structural issues flagged during a survey
• Properties made from non-standard or dangerous materials 
• Very short tenancy periods left on leasehold buildings, such as flats. 

These issues can concern lenders because they can affect your property’s resale value, making it harder to justify as security for the loan. After all, if you were unable to pay for your mortgage, the lender may need to sell your property to offset their financial loss. 

Improve your chances of success by taking action to strengthen your application 

Though it may seem like you’re facing several hurdles, there are plenty of steps you can take to boost your chances if you’re worried about a mortgage application rejection. For example, you can: 

• Check your credit report regularly and correct any errors
• Pay off debts where possible before making an application
• Avoid new lines of borrowing in the months leading up to a mortgage application
• Save as much as you can for a deposit (even a small amount can make a substantial difference)
• Keep your finances stable and try to avoid big job changes or industry switches right before applying.

Through these simple steps alone, you may be able to improve your chances of a successful mortgage application.

Get in touch

If you’d like support with a mortgage application and could use advice, we can help. Get in touch today to find out more.

Please note:

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Think carefully before securing other debts against your home.

Approver Quilter Financial Services Limited & Quilter Financial Limited. 05/09/2025