There are many myths about mortgages that can put people off or lead them astray. This guide busts common mortgage myths: from deposits and credit to self-employment, your bank, rates and later life, so you can approach getting a mortgage with the facts rather than misconceptions.
Myth: you need a 20% deposit
A common myth is that you need a deposit of 20% or more, when in fact mortgages are available with much smaller deposits, often from 5% to 10%, as our guide to your deposit explains. While a bigger deposit gets better rates, you do not need a huge one to buy. So do not assume a small deposit rules you out; low-deposit mortgages and schemes mean ownership can be within reach sooner than this myth suggests.
Myth: bad credit means no mortgage
Many believe that any adverse credit means you cannot get a mortgage, but specialist lenders consider borrowers with credit issues, depending on their severity and recency, as our guide to credit scores explains. So bad credit narrows your options and may mean higher rates, but it does not always prevent a mortgage. Do not give up because of past credit problems; there may well be a route, especially with advice.
Myth: the self-employed cannot get a mortgage
Another myth is that being self-employed makes a mortgage impossible, when in reality the self-employed get mortgages regularly; it is just assessed differently, usually needing accounts or tax calculations, as our guide to self-employed mortgages explains. So self-employment is a different route, not a barrier. With the right evidence and lender, self-employed people borrow successfully, so this common worry is largely unfounded.
Myth: you must go to your own bank
Some think you must get your mortgage from your own bank, but you can choose from across the market, and a broker can compare many lenders to find a better deal, as our guide to using a broker explains. Your own bank may not offer the best rate or be the most likely to accept you. So shopping around, or using a broker, often beats simply going to your existing bank out of habit.
Myth: the lowest rate is always best
It is a myth that the lowest advertised rate is always the cheapest deal, because fees can make a low-rate mortgage more expensive overall, so you should compare the true cost including fees, as our guide to comparing mortgage deals explains. So the headline rate alone can mislead. Comparing the all-in cost, and the features you need, leads to a better choice than chasing the lowest rate regardless of fees.
Myth: you are stuck once you have a mortgage
Some believe that once you have a mortgage you are stuck with it, but you can usually remortgage to a new deal when your current one ends, often saving money, as our guide to remortgaging explains. So a mortgage is not a life sentence on the same terms. Reviewing and switching your mortgage as deals end is normal and can be very worthwhile, contrary to this myth.
Myth: older people cannot get a mortgage
A final myth is that older people cannot get a mortgage, when in fact lenders increasingly cater for older borrowers, with options including later life and retirement mortgages, as our guide to how a mortgage works relates. So age is not the barrier it once was. Older borrowers have real options today, so this myth can wrongly discourage people who could borrow in later life.
Myth: renting is always cheaper
Some believe renting is always cheaper than buying, or that buying is always better, when in truth it depends on circumstances, location, how long you stay and the numbers, as our guide to the true cost of buying relates. So neither is universally true. Weighing the costs and benefits of renting versus buying for your own situation, rather than relying on a blanket claim, leads to a better-informed decision.
Myth: you should always overpay
It is sometimes said you should always overpay your mortgage, but whether overpaying is best depends on your rate, savings, other debts and goals, as our guide to overpaying explains. Sometimes saving or clearing pricier debt is better. So overpaying is often wise but not always the top priority. Considering your whole financial picture, rather than assuming overpaying is automatically best, helps you use your money well.
Myth: an agreement in principle guarantees the loan
A common misunderstanding is that a mortgage (or agreement) in principle guarantees you the full mortgage, when it is only an early indication, with the full application and checks still to come, as our guide to a mortgage in principle explains. So an agreement in principle is useful but not a final offer. Understanding this helps you avoid assuming the mortgage is secured before the full application is approved.
The encouraging reality
The reality behind many mortgage myths is more encouraging than the myth: with the right preparation, lender and advice, more people can get a mortgage than the myths suggest, as our guide to improving your chances explains. So rather than being discouraged, it is worth exploring your real options. Taking practical steps to strengthen your application often reveals that ownership is more achievable than the myths imply.
Where myths come from
Mortgage myths often come from outdated information, other people's particular experiences, or oversimplified rules of thumb, which may not apply to your situation or the current market, as our guide to the way mortgages work relates. So treat sweeping claims with caution. Checking the current facts for your own circumstances, rather than relying on hearsay or old advice, helps you avoid being misled by myths.
Get the facts for your situation
The best antidote to mortgage myths is to get the facts for your own situation, by researching reliable sources, using tools, and getting advice from a broker, as our guide to choosing a mortgage relates. So rather than acting on hearsay, find out what actually applies to you. Your circumstances are unique, and what is true for someone else, or was true in the past, may not be true for you today.
Do not let myths hold you back
Many people delay or abandon the idea of buying because of myths that do not apply to them, missing opportunities they could have taken, as our guide to improving your chances explains. So do not let misconceptions hold you back from exploring your options. Checking the real position, with advice if needed, often reveals that a mortgage, and a home, are more within reach than the myths would have you believe.
In short
Common mortgage myths include needing a 20% deposit (5% to 10% is often enough), bad credit meaning no mortgage (specialist lenders exist), the self-employed being unable to borrow (they can, assessed differently), having to use your own bank (the whole market is open), the lowest rate always being best (fees matter), being stuck once you have a mortgage (you can remortgage), and older people being unable to borrow (options exist). The facts are more encouraging than the myths.
Where to get help and next steps
Read our guides to how mortgages work, whether to use a broker, mortgages for the self-employed, and choosing a mortgage. This is general information, not mortgage or financial advice.