How to Get a First-Time Buyer Mortgage with a Student Loan

For most graduates in the UK, student loans are a normal part of life — which means they’re also a normal part of the first-time buyer mortgage process. The reassuring truth is that having a student loan does not prevent you from getting a mortgage. In fact, lenders see student loan repayments very differently from traditional debt.

This guide explains how to get a first-time buyer mortgage with a student loan, how repayments affect affordability and what steps can help strengthen your application. This article provides general information only and does not offer regulated mortgage advice.

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Do Student Loans Affect a First-Time Buyer Mortgage?

Yes — but not in a negative way for most people. Student loans:

• Do not appear on your credit file
• Do not affect your credit score
• Do not impact lender decisions based on debt levels

Instead, lenders only look at the monthly repayment shown on your payslip because it reduces your net income.

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What Lenders Consider When You Have a Student Loan

1. Your Monthly Repayment

This directly affects affordability. For example:

• £50 per month repayment → small impact
• £150 per month repayment → slightly reduced borrowing capacity

Lenders care about affordability, not the student loan balance.

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2. Your Income Level

Affordability models use take-home pay after the student loan deduction, so higher earnings often balance out the repayment.

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3. Your Credit Behaviour

Even though student loans don’t appear on credit files, lenders still check:

• Payment history
• Credit utilisation
• Missed payments
• Personal loans or car finance
• Recent credit applications

Strong financial behaviour helps offset the impact of student loan deductions.

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4. Employment Stability

For first-time buyers with student loans, lenders look at:

• Length of time in your role
• Industry experience
• Contract type (permanent, fixed-term, zero-hour, etc.)

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5. Deposit Size

Larger deposits can reduce the effect of reduced affordability.

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How Student Loans Affect Borrowing Amounts

Student loans only affect borrowing through reduced net income.

Example

If your payslip deducts £80 per month for your student loan:

• Your available income decreases by £80
• Maximum borrowing may reduce slightly depending on the lender

Some lenders are more generous and treat student loan deductions as minor commitments.

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Can You Still Get a 5× Income Mortgage With a Student Loan?

Yes — in some circumstances.
Lenders offering higher income multiples generally look at:

• Profession (e.g., certain professional sectors may qualify)
• Income level
• Credit history
• Deposit size
• Monthly commitments (including student loans)

Having a student loan does not automatically exclude you from higher multiples if the rest of your profile is strong.

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How Different Student Loan Plans Affect Affordability

Your repayment depends on your loan plan:

Plan 1

Lower repayment threshold → often lower monthly deductions.

Plan 2

Common for more recent graduates → repayments can increase as income grows.

Plan 4 (Scotland)

Similar treatment to Plan 1.

Postgraduate Loan

Repayments added on top of Plan 1/2/4 → lenders include both in affordability.

Lenders do not differentiate deeply by plan — they simply look at the monthly amount deducted.

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What Documents You Need as a First-Time Buyer with a Student Loan

Lenders typically require:

• 3 months of payslips
• 3 months of bank statements
• P60 (optional but sometimes requested)
• Identification and address documents
• Deposit evidence
• Employment contract (if recently started)

Bank statements should clearly show:

• Salary paid in
• Student loan deduction
• Clean financial conduct

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How to Strengthen Your Mortgage Application

(General Information Only)

Even with a student loan, first-time buyers can strengthen their profile by focusing on the areas lenders value most.

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1. Improve Bank Statement Conduct

Aim for 3–6 months of:

• No unarranged overdrafts
• No returned direct debits
• Predictable, sustainable spending

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2. Reduce Credit Utilisation

Lower balances on cards improve affordability and lender confidence.

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3. Avoid Taking Out New Credit

Recent loans and finance agreements may reduce borrowing.

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4. Increase Your Deposit

A larger deposit:

• Reduces lender risk
• May unlock better rates
• Increases affordability

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5. Check Your Credit Files

Review:

• Experian
• Equifax
• TransUnion

Correct errors before starting the mortgage process.

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6. Understand Your Net Income

Your payslip shows the exact student loan deduction, helping estimate what you can borrow more accurately.

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Common First-Time Buyer Scenarios

Scenario 1: Graduate with stable income and low student loan repayment

Most lenders accept this easily.

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Scenario 2: High student loan repayment but strong salary

Affordability may reduce slightly, but borrowing often remains competitive.

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Scenario 3: First-time buyer with student loan plus car finance

Total monthly commitments are considered — but this does not block approval.

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Scenario 4: Student loan + minimal deposit

Possible with some lenders, though a 10% deposit may improve results.

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Summary

Getting a first-time buyer mortgage with a student loan is not only possible — it is entirely standard in the UK mortgage market. Lenders focus on:

• Your monthly student loan repayment
• Your take-home income
• Credit behaviour
• Job stability
• Deposit strength
• Bank statement conduct

Student loans do not damage your credit score and rarely prevent approval when the rest of your financial profile is strong. Many first-time buyers secure a mortgage successfully while still repaying their student loan.

This article provides general information only. For personalised guidance, regulated mortgage advice is required.