Brokers report more cases stalling as lenders factor in higher credit card and short-term borrowing
Mortgage advisers are increasingly delaying, restructuring or re-timing cases as higher levels of unsecured borrowing quietly erode affordability, even where credit card balances appear modest.
Brokers say the issue is surfacing more frequently across both purchase and remortgage applications, catching clients off guard when lenders apply assumed monthly repayments that significantly reduce borrowing capacity. In a tighter lending environment, those marginal impacts are now proving decisive.
The shift comes as consumer credit borrowing accelerated sharply in November. Bank of England figures show individuals took on an additional £2.1bn in consumer credit during the month, up from £1.7bn in October. Net borrowing on credit cards alone rose to £1bn, compared with £700m a month earlier, while other forms of unsecured credit - including personal loans and dealership finance - climbed to £1.1bn.
Annual growth in credit card borrowing reached 12.1%, its highest level since January 2024, as households continued to rely on short-term credit amid elevated living costs, despite inflation easing back to 3.2%.
For mortgage advisers, the relevance of those figures lies less in the headline growth rate than in how unsecured borrowing feeds into lender affordability models and application outcomes.
“Higher levels of credit card and unsecured borrowing are definitely having a more visible impact on affordability and lender outcomes,” said Louis Mason of Oportfolio. “Even when balances aren’t especially large, the assumed monthly repayments that lenders apply can significantly reduce borrowing capacity.”
That dynamic is reshaping client expectations. Mason said borrowers are often surprised to find they qualify for less than anticipated, or that certain lenders fall out of reach altogether once unsecured commitments are factored in.
“We’re also seeing more cases where applications need to be paused or delayed,” he said. “That might be because a client has recently relied on credit cards to manage higher living costs, or because utilisation levels have crept up over time.”
In some cases, advisers are recommending short holding periods to allow clients to reduce balances, consolidate debt or let statements reflect lower usage before proceeding.
“In a tighter lending environment, marginal cases are much less likely to get through with higher unsecured commitments,” Mason said.
The impact is being felt particularly among first-time buyers, where affordability headroom is already limited. Rather than treating unsecured borrowing as a secondary issue, advisers say it is increasingly shaping mortgage strategy and timing.
“More broadly, unsecured debt is becoming a key part of the mortgage strategy rather than a side consideration,” Mason said. “For many borrowers, especially first-time buyers, managing credit carefully for six to twelve months can be the difference between securing a competitive deal with a lower rate, and having to compromise on price, property, or timing.”
Other advisers report a similar pattern emerging across both purchase and remortgage cases. Sadia Mehmood of The Mortgage Mum said short-term credit use — particularly buy now, pay later arrangements — is now featuring earlier in mortgage conversations.
“I am seeing more clients with credit cards, Klarna payments especially, and it is affecting mortgage conversations especially around affordability,” she said. “There are concerns that relying too much on unsecured debts could affect repayment of the mortgage.”
That has prompted a greater emphasis on upfront education and planning. Mehmood said advisers are spending more time explaining how unsecured commitments influence lender assessments, rather than addressing the issue once an application is already underway.
“Advice has slightly shifted around clean up and timing of the applications,” she said. “Trying to spend more time educating a client up front on how the unsecured debts can affect affordability and lender outcomes and encouraging future planning in advance.”
Kevin Gibson of Ascot Bridging Finance said unsecured debt, particularly credit cards, is playing a more prominent role in mortgage conversations, with higher balances increasingly affecting affordability as lenders remain cautious.
He said more clients are needing to pause or delay applications to reduce balances or demonstrate improved account conduct, with advisers placing greater emphasis on credit clean-up and timing to improve lender options.
The wider data points to a cautious consumer backdrop. Retail sales volumes fell by 0.1% in November, while households increased deposits with banks and building societies by £8.1bn during the month. Mortgage approvals for house purchases also edged lower, falling by 500 to 64,500.
For brokers, however, the immediate concern is execution risk, ensuring cases are not derailed by credit decisions made months earlier, often outside the client’s awareness. As borrowing patterns continue to evolve, advisers say mortgage planning is becoming less about last-minute affordability fixes and more about sustained credit discipline.
