High (offset) CC balance when needing a mortgage?

se2020

Due to the low interest rates over the last few years I haven't done any stoozing for a while but I'm now spotting rates that make it worthwhile again.

But, I'm hoping to purchase a house as soon as I can find/afford one and I will need a mortgage. 

I know normally £30k of credit card debt would count against me when applying for a mortgage but if I also had £30k in a savings account (and obviously was not using that £30k for the deposit) would it still be an issue?

I would expect the monthly minimum repayment of the credit card to be taken into account on affordability but would the debt itself be an issue?

Thanks!

dimbo61

You still have £30,000 worth of debt and this will reduce the amount you can borrow 
Lenders will look at the monthly cost of this debt 

DullGreyGuy

se2020 said:

I would expect the monthly minimum repayment of the credit card to be taken into account on affordability but would the debt itself be an issue?

Banks just consider repayments in their affordability calculations but they simply ask the outstanding balance not what the monthly payments are. They do their own calcs which will mean it'll have a bigger impact than the real repayments on a 0% card.

When we applied for our mortgage we marginally failed the affordability test but it was said that if we cleared one card (which we did every month anyway) then it'd pass. So just had to screenshot that we'd paid the card off a week earlier than normal and then got the approval shortly after. 

kingstreet

Lenders are not interested in your savings.

A £30k card liability will mean a sizeable reduction in your borrowing power. Lenders typically tax card debt as a 3% (£900) or 5% (£1,500) monthly cost.

Over 25 years, Halifax would lend £232,500 to someone with a salary of £50,000pa. A £30k card balance would see that fall to £50,000 (yes, fifty thousand).

In addition, debt level compared to annual income may mean a decline on credit score grounds.