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Can I pay a house deposit on a credit card?

Can I pay a house deposit on a credit card?
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Trying to save for a house deposit when you are a first-time buyer can be tricky. With high rent payments and rising house prices, it can be hard to pull a pot of money together. So you may have asked yourself: can I pay for a house deposit on a credit card?

We’re here to tell you why this isn’t possible and to look at alternative ways to come up with the money.

Can I use my credit card for a house deposit?

Have you ever wondered about using your credit card to pay for your house deposit? Well, stop wondering. You will not be able to use a credit card for your deposit. In fact, any sort of additional borrowing to fund a house deposit is not a good idea. And while it is technically possible to use a personal loan, the reality is that you’ll then struggle to be approved for a mortgage.

This is because lenders are very keen to know that you are not taking on too much debt. When considering your application, they will take a look at your credit report, and what other forms of borrowing you already have. So if they see a credit card or a personal loan with a significant level of outstanding debt, they will see this as an added layer of risk. This means they will be unlikely to approve your mortgage application.

Mortgage applications also require you to make a declaration about where the funds for your deposit came from. This is to ensure that it is from a non-repayable source – such as your savings or a gift from a family member. This is once again so that the lender knows that you aren’t taking on unmanageable levels of debt.

How else can I afford a house deposit?

As credit cards and loans are not a good idea to fund a house deposit, here are a few alternative ways to get you on the property ladder.


The most traditional route to pay for a house deposit is from your savings. Understandably, it can be difficult to save up the amount you need, but there are some financial products available to help. For example, you could take out a Lifetime ISA. This is an ISA designed to help you save for your first house. You can deposit up to £4,000 each year until you are 50, and the government will add a 25% bonus to your savings – up to £1,000 per year.

A ‘gift’ of money

If you have parents or family members who are able to help you out, then you could potentially use a ‘gift’ from them as your house deposit. While it may be a loan that they are giving you, for the purpose of your mortgage application, it will need to be classified as a gift.

Basically, there needs to be no obligation to pay it back. Otherwise this could reduce how much you could potentially borrow. Further down the line, you may be in the position to pay the money back, but from the lender’s perspective, there should be no repayment requirement.

Shared ownership/Help to Buy

If neither of those options suit, there are other government schemes available.

Shared ownership allows you to buy a share of between 25% and 75% on a house, and then pay rent on the rest. Which, as you can imagine, greatly reduces how much you need to borrow.

Meanwhile, Help to Buy requires you to have a deposit of 5%. But then it gives you an equity loan of 20% of a new-build home’s value on top of your 5%. Essentially giving you a 25% deposit. There’s no interest to pay for the first five years on the loan, but after that you will be charged 1.75% of the loan’s value.

What next?

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