Thinking about leasing a car through Personal Contract Hire (PCH) and wondering how it might affect your chances of getting a mortgage? This guide explains how leasing fits into a mortgage lender's assessment process, and what steps you can take to stay mortgage-ready.
Yes — car leasing is considered a financial commitment, and monthly lease payments will be included in mortgage affordability calculations.
However, having a lease does not automatically stop you from getting approved. Lenders look at:
Your overall income
Your credit history and score
Existing financial commitments (including loans, credit cards, and lease agreements)
Your debt-to-income ratio
In some cases, yes. A well-managed lease with regular on-time payments can improve your credit profile. This shows lenders that you’re responsible with financial agreements and able to manage monthly repayments.
Leasing may help if:
You’ve held the lease for several months or years
You’ve maintained a clean payment history
Your monthly payments are modest compared to your income
Taking out a new car lease shortly before applying for a mortgage may reduce the amount you can borrow. This is because:
A hard credit search appears on your credit report
Your monthly outgoings increase
Your affordability calculation changes
If your lease payments take up a large portion of your income, lenders may lower your mortgage offer or reject the application.
Time your applications wisely – avoid applying for new credit close to a mortgage application.
Keep lease payments affordable – choose a lease deal that fits comfortably within your budget.
Maintain good credit habits – always make payments on time.
Speak with a mortgage broker – they can help you understand which lenders are more flexible around lease payments.
| Scenario | Impact on Mortgage |
|---|---|
| Lease payments within budget | Acceptable in affordability checks |
| New lease just before mortgage | May reduce loan amount |
| Strong credit and payment history | Can support application |
| Multiple credit commitments | May lower borrowing potential |
A personal lease will count as a monthly commitment when applying for a mortgage. But if your lease is affordable and well-managed, it won’t prevent you from securing a mortgage — especially if the rest of your finances are in order.
If you’re planning to lease a car and apply for a mortgage within a short time frame, it’s best to seek professional guidance before making a decision.
This article does not constitute advice, it is for information purposes only. You should contact a mortgage broker for personalised advice for your specific circumstances. You can ask Tom for a personalised illustration using the contact details above.
Leasing Agreements may vary on manufacturer and finance provider, please check your agreement if you are unsure, we cannot guarantee that all leasing deals operate in the same way, please refer to the lender for more details.
No broker-related fees are charged with any mortgage recommended and arranged by Tom or Chesterton Grant Mortgages Ltd. They will be paid a commission from the lender.
Chesterton Grant Ltd is registered in England and Wales No 4198365 | Chesterton Grant Mortgages Ltd is registered in England and Wales No 4232613. Registered Address: Evolution House, Lakeside Business Village, St David’s Park, Ewloe, Flintshire CH5 3XP. Authorised and regulated by the Financial Conduct Authority. Chesterton Grant Ltd is entered on the Financial Services Register https://register.fca.org.uk/ under reference 408148. Chesterton Grant Mortgages Ltd is entered on the Financial Services Register https://register.fca.org.uk/ under reference 300796.
Your home may be repossessed if you do not keep up repayments on your mortgage.