£500,000 mortgage with 10% deposit for home mover with £50,000 credit card balance

Trinity Financial helped arrange a £500,000 mortgage for a senior sales professional to secure a10% deposit mortgage after several high-street lenders’ affordability systems were affected by their outstanding credit card balances.

The client

Our client worked as a Vice President of Sales for a multinational firm and was looking to move to a new home.

They earned a strong salary and had a good overall financial profile. However, they also had approximately £50,000 of outstanding credit card debt, which needed to be carefully considered as part of the mortgage application.

Why did the client contact Trinity Financial?

The client found Trinity Financial through our website and wanted an experienced mortgage broker to guide them through the home-moving process.

Although they were not under pressure to complete the process quickly, they wanted to ensure the application was structured correctly and that their credit card debt would not prevent them from obtaining the mortgage they needed.

High levels of unsecured debt can significantly reduce the amount some mortgage lenders are prepared to offer. Even when an applicant earns a high income and has maintained their payments, lenders may apply strict credit-to-income limits or deduct monthly credit commitments from their affordability calculations.

What was the challenge?

The client was purchasing with a 10% deposit and therefore needed a mortgage at 90% loan-to-value.

A number of mainstream lenders declined the application at the decision-in-principle stage because of the level of credit card debt compared with the client’s income.

How did Trinity Financial help?

Our mortgage broker reviewed the client’s income, monthly commitments, credit balances and property purchase in detail.

After assessing the available options, we identified a big bank as the most suitable lender. The lender's affordability assessment did not apply the same credit-to-income ratio restriction that had caused problems with several other high-street banks.

The client’s credit card commitments still needed to be declared and included in the affordability assessment, but this bank was prepared to consider the overall strength of the application.

What mortgage was arranged?

Trinity Financial arranged a capital repayment mortgage with over a 30-year term.

The mortgage was agreed at 90% loan-to-value with an interest rate of just below 4.75%, which was a competitive option given the deposit size and the client’s outstanding unsecured borrowing.

The application was submitted on 10 July, and the formal mortgage offer was issued on 20 July.

The result

Despite having approximately £50,000 of credit card debt, the client successfully secured the £500,000 mortgage required to purchase their next home.

This case demonstrates why lender selection is so important. Different banks assess credit commitments in different ways, and an applicant declined by one lender may still be acceptable to another.

Do you have credit card debt and need a mortgage?

Having credit card balances does not automatically prevent you from obtaining a mortgage, particularly where you have a strong income and a good repayment history.

However, outstanding debts can affect affordability, the maximum loan available and the choice of lenders. Trinity Financial’s mortgage brokers can review your finances, compare lender criteria and identify banks or building societies most likely to accept your circumstances.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage.