Can You Get a Mortgage with a Debt Management Plan (DMP)?
Quick Answer
Yes, it is possible to get a mortgage while in a Debt Management Plan (DMP), though options are usually with specialist lenders rather than high street banks. Deposit requirements tend to be higher (often 15–25%), and affordability checks will factor in your DMP payments. A clean repayment record and larger deposit can improve your chances.
What is a Debt Management Plan (DMP)?
A Debt Management Plan is an informal arrangement with creditors to make reduced monthly payments on debts. A provider usually manages it on your behalf, negotiating to:
- Lower monthly repayments
- Freeze or reduce interest
- Stop additional charges
It is not a form of insolvency, but your credit file will show missed or reduced payments, which can make mortgage approval more complex.
Can I Get a Mortgage While in a DMP?
Yes, you can. However, most high street lenders will not accept applications until a DMP is completed. Specialist lenders may consider you if:
- You have a consistent repayment record
- Your income is stable
- Your deposit is strong
Consistency is key — evidence that you are keeping up with your DMP gives lenders more confidence.
How Long After a DMP Can I Apply for a Mortgage?
Lenders vary in their requirements:
- Some may consider an applicant after 6–12 months of consistent DMP payments
- Others prefer 3 years or more
- A few require the DMP to be fully completed
Waiting until the plan is finished often provides access to better rates and more lenders, but mortgages during a DMP remain possible.
How Much Deposit Will I Need?
Deposit requirements are generally higher with a DMP:
| Situation | Typical Deposit Required |
|---|---|
| During a DMP | 15–25% |
| After completing a DMP | 10–15% |
| Clean credit history | As low as 5% |
Summary: Most borrowers with a DMP should budget for at least a 15% deposit. A larger deposit opens up more options and can help secure lower rates.
Will a DMP Affect Affordability?
Yes. Lenders will:
- Factor in your ongoing DMP repayments when calculating borrowing limits
- Assess your credit history, where DMP-related arrears remain visible for up to six years
This means borrowing capacity may be lower compared with applicants without a DMP.
What Documents Will Lenders Require?
You will usually need to provide:
- Proof of income (payslips, P60s, or self-employed accounts)
- 3–6 months of bank statements
- DMP details (start date, balance, and monthly payments)
- Evidence of on-time repayments from your DMP provider
Can I Remortgage with a DMP?
Yes, remortgaging is possible. It may help avoid moving onto a higher variable rate or allow you to release equity. Rates are usually higher, but the outcome is often still an improvement compared with staying on an unfavourable deal.
Should I Apply During or After My DMP?
- During – Limited lender choice, higher deposits, and potentially higher interest rates
- After – Wider lender pool, better rates, and easier application process once credit has had time to improve
If waiting is an option, completing the plan first usually improves outcomes.
How Can I Improve My Chances?
Steps to prepare:
- Keep DMP payments up to date
- Save the largest deposit you can
- Clear any other debts where possible
- Avoid new borrowing before applying
- Work with a broker experienced in adverse credit cases
Common Myths About DMP Mortgages
- “You can’t get a mortgage until your DMP ends.” – Not always true. Some lenders consider applicants during the plan.
- “Rates will be unaffordable.” – They are usually higher, but not always excessively so.
- “Specialist lenders are a last resort.” – They are often the most practical route and can still provide competitive solutions.
FAQs
Can I get a mortgage with a DMP on my credit file?
Yes, but specialist lenders are usually required, and deposit requirements are higher.
Do I need a larger deposit if I have a DMP?
Typically, yes — expect at least 15% during a DMP, though some lenders may accept 10% after completion.
How long should I wait after a DMP before applying?
If possible, wait 12–24 months after completion for better rates and lender choice.
Will all lenders consider me?
No. Many high street banks will decline applications until the DMP has ended, but specialist lenders can help.
Can I remortgage while in a DMP?
Yes, it is possible, particularly to avoid higher variable rates or to release equity.
Final Thoughts
A Debt Management Plan does not automatically rule out a mortgage. With the right lender, a larger deposit, and a strong repayment record, approval is achievable. A broker familiar with DMP mortgages can save you time, reduce rejections, and identify the most suitable lenders.