How Does My Overdraft Affect a Mortgage Application?

Worried about a short-term overdraft impacting your credit report during a mortgage application? Here we explore the importance of overdraft debt and the point at which a lender might start to worry.

About your mortgage

Error: Yearly income income must be between £1 and £10,000,000.

Error: Regular bonus must be between £1 and £10,000,000.

Based on your yearly income, you may be able to borrow:


Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.


Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.


Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

How Does My Overdraft Affect a Mortgage Application?

Having pre-existing debts can seem like an obstacle when looking to apply for a mortgage - but it isn't necessarily a reason to be turned down for further lending!

Revolution Brokers often talk with clients who are worried about having an overdraft, and whether that will damage their chances of being approved for the mortgage they need.

In this guide, we'll discuss reasons that a lender might reject a mortgage application due to an overdraft, and what sort of factors go into making this decision.

For dedicated support with applying for a mortgage alongside an overdraft or other borrowing, give us a ring on 0330 304 3040, or drop us an email to

I Have an Overdraft - Can I Still Get a Mortgage?

Overdrafts are a common form of occasional borrowing, and many people have an overdraft facility and successfully apply for a mortgage.

In general, an overdraft in itself isn't likely to be an issue but, of course, a lot depends on the overall picture of your credit, and how extensively you rely on an overdraft to shore up gaps in your income.

Lenders will consider several criteria when deciding whether to lend:

  • Affordability - if you have a large overdraft, or seem to be struggling to keep within your available balance some of the time, it could indicate affordability issues. Affordability assessments look at your income, outgoings, and debts to determine whether you can reasonably afford to keep up with your mortgage repayments.
  • Agreed Overdrafts - where you have an approved overdraft facility and use it from time to time, this is unlikely to have a significant impact on your mortgage application.

A mortgage provider will consider how often you use your overdraft, to what extent, whether you have multiple overdraft accounts, and whether you have been charged for using an unauthorised overdraft facility.

Will It Impact my Mortgage Application if I am Using my Overdraft?

You might potentially find that if you are usually in your overdraft or have multiple overdraft accounts, this might impact your debt to income ratio.

Again, it all depends on how heavily in debt you are, and to what extent you use your overdraft to cover general living expenses.

Having an overdraft facility that you use rarely, or sometimes dip into, probably won't indicate an affordability issue, but being always in debt could mean a lender needs to look at affordability a little more closely.

Should I Close Unused Overdraft Accounts Before Applying for a Mortgage?

Should you have a large overdraft facility that you don't use, then yes it may be worthwhile to close the facility before applying for a mortgage.

This works on a similar basis to credit cards. Even if you do not use the facility, there is potential that you will. Therefore your debt to income ratio and expandable income might change to the extent that it impacts your affordability assessment.

Most lenders work on the assumption that unsecured debt is repayable at 3% of the balance per month. Therefore, if you have a £10,000 debt, or even in some cases debt facilities of £10,000 that you aren't using, a 3% per month provision, in this case, £300 may be deducted from your income and change the maximum mortgage you are eligible for.

Can I Get Approved for a Mortgage if I Have a Student Overdraft Account?

You certainly can, yes. Most students have some grants, loans or borrowing. While a lender will need to include any debt in the affordability assessment, this won't be a primary reason for mortgage rejection.

What Happens if I Have Unauthorised Overdraft Charges and Apply for a Mortgage?

Unauthorised overdraft charges are less standard, and many types of debit account will not permit a payment to be made if you do not have an agreed facility.

However, where they do happen, it can be more serious than using an agreed overdraft facility, since it represents an inability to cover your living costs within your means.

Lenders will usually ask for at least three months of bank statements, so you must declare unauthorised overdraft charges since they will see this information in any case.

Should you have used an unauthorised overdraft once, it may be disregarded as a one-off event that isn't likely to recur.

Can I Draw Bank Funds on my Overdraft Towards a Mortgage Deposit?

No, generally a lender will not accept a deposit that has been financed by other unsecured lending.

The most common form of deposit is in cash savings, or a gift from a close family member - although some lenders will accept other deposit sources, give us a call if you're looking to get a mortgage with a different source of funds.

Expert Advice on UK Mortgages and Overdrafts

Contact the business loan broker team on 0330 304 3040 or via email at to discuss your mortgage eligibility in light of any other debts, including an overdraft balance.

We can advise the best courses of action for your circumstances and direct your mortgage application to the right lenders who we know will be able to provide the borrowing you require.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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