Why might I have been turned down for a mortgage?
A lender looks at the value of the property you want to buy, the deposit you’ve saved up and your general financial situation before coming to a decision on your mortgage application. Ultimately, it comes down to the question of whether the lender thinks you can afford the repayments.
Here are some common reasons why you might have been refused a mortgage:
Your credit score is low
When you apply for a mortgage, lenders will do a ‘hard’ credit search of your credit report. This gives them a better understanding of your financial behaviour and history, and your ability to pay back your mortgage.
Your credit report will show things like:
How much you owe on credit cards
Details of any other loans
Recent missed or late payments
County Court judgements (CCJs) in the last six years
Financial links with someone else - a joint bank account for example
If you’re registered on the electoral roll
Every time you make a credit application, it will show up on your credit file. Too many hard credit checks over a short period of time is a red flag for mortgage lenders. It can affect your credit score and your chances of being approved for a mortgage.
Your credit score might also be low if you’ve had little or no credit in the past, as lenders won’t have any evidence of how you manage money.
The lender doesn’t think you can afford the repayments
Since affordability rules were introduced in 2014, lenders have become far stricter when checking whether you can afford your mortgage repayments. This means they’ll go over your finances with a fine-tooth comb.
You’ll need to provide evidence of your income and your household expenses, for example, outstanding loans, child maintenance, utility bills and basic everyday living costs like groceries and clothing.
Lenders will also take into account known or likely future changes to your income or expenses that could affect your ability to repay the mortgage if interest rates go up.
You don’t have enough deposit
You'll normally need a deposit of at least 5% of the property price - but the more you can put down, the better. This is because lenders will see you as a smaller risk if you're borrowing less, and so may be more likely to offer you a mortgage.
Too many credit applications
As we mentioned a bit earlier, repeatedly applying for credit could make mortgage lenders wary. Every time you apply for credit, a hard search will leave a footprint on your credit report. It could make you look a little desperate and could imply that you have money problems.
You’re not registered to vote
If you’re not on the electoral roll at your current address, lenders won’t be able to confirm who you are and where you live – simple as that. If the lender doesn’t accept other proof of your identity and address, this could cause an issue for your application.
An error on your credit file
A simple admin error on your credit file can have an impact on your credit score and therefore your ability to get a mortgage approval. For example, inconsistent name spellings, an old address or an unused bank account that you forgot to close.
The lender might not give a specific reason why your credit report isn’t up to scratch, so it’s up to you to check it out and correct any mistakes.
You don’t meet the lender’s criteria
Every mortgage lender is different and they all have their own criteria. It could just be that you don’t fit the profile type for that particular lender. For example, it might be that you’re self-employed or have lived in the UK for less than three years.
Some lenders are also picky about the type of property they’re willing to lend money for. If you don’t keep up with repayments on your home and it’s repossessed by your lender, they don’t want to be stuck with a lemon that they can’t sell on.
You haven’t provided the right paperwork
There’s a mountain of admin to complete when you apply for a mortgage. If you don’t supply a crucial bit of paperwork, like bank statements, you could find yourself being turned down.
The property is ‘unmortgageable’
It might be that your dream home isn’t one that a provider is willing to lend on. Lenders have their own criteria, but if the home you want to buy is non-standard in some way, you may be turned down for a mortgage. For example, it may be that the property’s walls are concrete rather than brick or stone, or it’s got issues like serious damp.
Just remember that these are ‘possible’ reasons why your mortgage application could be refused. Each lender has their own criteria, so a refusal from one, doesn’t necessarily mean the same for another, so try not to get disheartened. You could still find one who is prepared to offer you a mortgage
Your home may be repossessed if you can’t keep up repayments on your mortgage.
Did you know?
Some lenders refuse to offer a mortgage if you’ve been in your current job for less than a year.
What should I do if I’m refused a mortgage?
If your mortgage application is refused, you’ll want to know why. You can ask the lender why your application was declined. They don’t have to tell you the reason, but it’s worth a try.
Consider if applying for another mortgage straight away is the right thing to do. This could make the situation worse as another hard check will be marked on your credit file and could lower your score.
If the lender hasn’t given you a specific reason, check your credit report to see if anything’s there that may have put them off.
You can check your credit report free of charge, from one of the three main credit agencies: Experian, Equifax and TransUnion. This won’t affect your credit score in any way.
Take your time to address any issues that may have caused your application to have been rejected, so you can improve your chances of getting approval next time.
FAQs
Why has my mortgage been declined after the agreement in principle?
An agreement in principle is only a ‘conditional’ offer based on basic information and a preliminary credit search. It doesn’t guarantee you’ll be given the mortgage.
If you’re refused a mortgage after you get an agreement in principle, it usually means the lender found something that didn’t meet with their criteria when they did a deeper search of your finances and credit file.
If you ask the lender, they should be able to tell you why you were rejected. Make sure you sort out the issue before applying elsewhere. It might also be wise to speak to a mortgage broker who could help you work out what went wrong and find a lender that’s likely to approve your application.
Why has my mortgage been declined after valuation?
As part of the mortgage process, lenders will carry out their own valuation of the property you want to buy.
The underwriter might decline your mortgage if the surveyor down-values your property. For example, if it needs significant repairs or it’s made from unusual construction materials, like wood, which could make it a bigger risk than a traditional property.
Why has my mortgage been declined after exchange of contracts?
This is very rare, but it can happen. In most cases, it’s because you’ve failed to disclose something pretty major on your original application, like bankruptcy, or you’ve given false information.
If this is the case, you’ll find it very difficult to get another mortgage, and you’ll also have to give up your deposit.
That’s why it’s vital that you’re 100% honest when making a mortgage application. If there’s something lurking on your credit file that you haven’t declared, the lender will find it anyway.
Does being refused a mortgage affect my credit score?
Being refused a mortgage won’t necessarily damage your credit score. Your mortgage application will appear on your credit report, but it won’t say if you were accepted or rejected.
But applying for another mortgage straight away could damage your score. Every time you apply for credit, a hard search will be marked on your credit file. Another application will result in another hard search, and so your credit score could dip further. Lenders will see this, and most likely reject your application.
If you’re refused a mortgage, consider at what point applying again will be right for you and your credit rating. And in the meantime, do what you can to improve your credit score.

Compare the Market’s Editorial Team is made up of industry experts with decades of experience in personal finance, insurance and utilities. Each of our authors has an area of expertise, where they can share their extensive experience to help you get a better deal, by finding the right product and saving money.
Our content is written by a Compare the Market expert, backed by data and enhanced by AI. Find out how we ensure accuracy and quality in our Editorial Guidelines.