Will car finance affect mortgage application?

thegirlintheattic

Took out car finance a few months ago to fund a new car (£7K over 3.5 years). At the time my partner and I were thinking of buying a home in 2014-2015 after I had paid off the finance early. Now it is looking like we will be buying in the next 6 months or so. I'm wondering how the car finance will affect any joint mortgage application?

For context, our joint income is over £50K a year, both in professional and stable jobs. Would be looking to borrow between £100-140K with a 10% deposit.

harvey115

You should be fine as you are trying to borrow 3 times or under your joint annual income, so there will be room for your car loan to be placed in the affordability calculations.

To give you a piece of mind, you should try the borrowing calculators from Halifax, Nationwide, HSBC etc to see how much you can borrow. Although these calculators only show and expected amount, you can at least estimate your borrowing power.

Hope this helps.

thegirlintheattic

Thank you. We've done the NatWest calculator which says we can borrow up to £220,000 and the mortgage for the amount we want to borrow is pretty much the same as our current rent so we can 100% afford it.