Are first-time buyers ruling themselves out before they even apply?
Published on: 19 August 2026 | 3 min read
- New report reveals widespread mortgage myths, with more than half wrongly thinking existing debt rules out being approved
- More than a third of potential first-time buyers (37%) worry about being rejected for a mortgage
- Over half (53%) have delayed major life milestones while trying to buy their first home, including getting married and having children
- Lloyds has partnered with Gladiators star Livi Sheldon to highlight some of the most common myths held by first-time buyers
Many aspiring homeowners could be delaying their plans to get on the property ladder because they mistakenly believe they wouldn't qualify for a mortgage, new research from Lloyds suggests.
The study of more than 1,000 prospective first-time buyers found widespread confusion about what could prevent someone from getting a mortgage. More than half (58%) incorrectly believe having existing debt would automatically stop someone being approved, while over a third (37%) think a 20% deposit is essential.
Many also believe factors such as using an overdraft (40%), receiving benefits (38%), changing jobs recently (31%), not having a perfect credit score (30%) or being self-employed (24%) would definitely put homeownership out of reach.
The findings suggest that while affordability is one of the biggest challenges facing first-time buyers, misconceptions about mortgage eligibility may be creating an additional barrier, with some ruling themselves out before they've even explored their options.
Lloyds has partnered with Gladiator, television personality and first-time homeowner Livi Sheldon to highlight some of the common misconceptions that may be discouraging would-be buyers from exploring their homeownership options.
What factors do would-be first-time buyers think would stop someone getting a mortgage?
|
Factor |
Proportion |
|---|---|
|
Factor Existing debt |
Proportion 58% |
|
Factor Being on a zero-hours contract |
Proportion 54% |
|
Factor Being in an overdraft |
Proportion 40% |
|
Factor Receiving benefits |
Proportion 38% |
|
Factor Not having a 20% deposit |
Proportion 37% |
|
Factor Having changed jobs recently |
Proportion 31% |
|
Factor Not having a perfect credit score |
Proportion 30% |
|
Factor Earning less than £50,000 a year |
Proportion 27% |
|
Factor Being self-employed |
Proportion 24% |
|
Factor Using Buy Now Pay Later |
Proportion 21% |
|
Factor Being on maternity or paternity leave |
Proportion 20% |
|
Factor Having student loan debt |
Proportion 13% |
In reality, none of these factors would automatically prevent most lenders from being able to offer a mortgage, subject to individual circumstances and standard affordability and eligibility assessments.
Mortgage providers typically consider a range of factors, including income, outgoings and overall affordability, rather than relying on one aspect of a person's finances.
Myths versus reality
Some of the most common first-time buying misconceptions identified by the research include:
Myth: You need to be debt free to get a mortgage
Reality: Existing borrowing, such as student loans, credit cards, car finance or overdrafts, does not automatically prevent someone from getting a mortgage. Lenders look at whether repayments are affordable alongside other financial commitments.
Myth: You need a 20% deposit
Reality: Some mortgage products are available with significantly smaller deposits than many people realise – such as Lloyds’ new £5k deposit offer – meaning buyers may be able to purchase a home sooner than they think.
Myth: You need a perfect credit score
Reality: There is no single credit score required to get a mortgage. Lenders take a range of factors into account when assessing applications.
Myth: Self-employed people can't get a mortgage
Reality: Many lenders offer mortgages to self-employed applicants, though they may need to provide additional evidence of their income.
Are first-time buyers putting their ambitions on hold?
The research suggests many prospective first-time buyers may be putting their ambitions on hold unnecessarily.
More than a third (37%) said being rejected for a mortgage was a particular concern, despite widespread misconceptions about what could prevent someone from getting approved.
These findings come at a time when many aspiring homeowners are already making significant financial and personal sacrifices to save for their first property.
More than half (53%) said they had delayed or given up important life milestones while trying to get on the property ladder, including travelling (28%), buying a car (15%), getting married (14%) and having children (14%).
Almost two-thirds (64%) said they had cut back on day-to-day spending while saving for a home, with holidays (46%), eating out (41%) and buying new clothes (39%) among the most common sacrifices.
More achievable than buying a home?
The research highlights just how challenging many prospective first-time buyers perceive getting on the property ladder to be.
More than a quarter (27%) said learning a new language felt more achievable than buying their first home, while one in five said running a marathon (20%) or writing a book (20%) seemed easier.
And in a sign of just how tough some feel the challenge has become, almost one in 10 (9%) said winning Gladiators would be more achievable than buying a home.
Amanda and Livi's top tips for first-time buyers
Don't rule yourself out
Many people assume they need a perfect credit score, no debt or a large deposit before they can buy. The reality may be different, so don't make assumptions about what is and isn't possible.
Start the conversation sooner
You don't need to wait until you've found a property or hit a savings target. Speaking to a mortgage expert early can help you understand your budget, your options and the steps needed to get mortgage-ready.
Explore every route onto the ladder
Different mortgage products suit different circumstances. Taking time to understand the support and options available – such as low deposit offers – could help you get on the property ladder more quickly.
You may also like
