While the odd bet on your football team to win at the weekend sounds like a harmless bit of fun, it could actually be ruining your chances of getting a mortgage.
Lenders have always been cautious when it comes to approving mortgages, but some brokers have noted that even individual gambling transactions are now seen as a red flag.
Typically, borrowers will be judged based on a combination of factors, including their income, age, credit usage and payment history, when submitting a mortgage application.
The exact requirements for mortgage approval can vary depending on the lender.
Joe Child, a mortgage adviser at Right Choice Mortgages, told Money Blog he had recently seen banks reject applications based on gambling transactions in customers’ bank statements, even if it was just the odd flutter.
“Tolerance for gambling transactions appears to vary from lender to lender,” he said.
“We have seen a decrease in cases where customers have separate betting accounts, but even those who only bet on football at the weekend.
“An underwriter can question gambling transactions, or in some cases we have seen an outright decline without any reason to appeal.”
On LinkedIn, he brought up one case where his clients submitted a joint application, had no form of credit in the background and were requesting a mortgage with less than 50% loan-to-value ratio, but were rejected twice.
The couple had never been in an overdraft and had £5,000 in their current account.
Image: iStock
“These are football bets only, and they are only on one statement out of the last three. Affordability for the level of transactions seen is not a concern,” he said.
He wondered whether banks would make the same decision for those who drink or smoke excessively, or those who go to local bookmakers and use cash to place bets.
“If a customer can afford to spend, is it right to dictate how their hard-earned money is used?” he asked.
What bets could cause trouble?
Childs said it was the “habitual spending” on betting that seemed to cause the most concern for lenders, even if customers could easily afford the amount they were depositing.
“For some customers, betting on football, for example, can be a hobby and the amount spent is not exaggerated compared to their income,” he said.
“However, we have seen a decline in orders from these customers even in cases where customers are not under financial pressure and can maintain their spending level.”
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People should be aware that insurance companies will review their bank details when they apply for a mortgage, and gambling transactions are likely to be questioned.
“If the number of transactions going through your account is considered excessive, it could result in your mortgage application being denied,” Childs said.
He added that lenders were unable to clarify the “tolerance level” for gambling, with many saying it is assessed on a case-by-case basis.
Gambling policies of major lenders
We asked all the major lenders to explain their gambling policies to the money team – here’s what they said:
Santander
The main bank does not have any specific gambling policies for mortgage customers.
Instead, it performs affordability assessments when considering new mortgage applications.
This involves evaluating a customer’s bank statements, which takes into account all their expenses to ensure that the monthly installments are affordable.
Barclays
Barclays said it doesn’t have any set rules when it comes to gambling: “We ensure all mortgages are affordable before we offer them, including testing with higher interest rates.”
At the national level
As a “responsible lender”, Nationwide said it aims to ensure customers can afford their mortgage repayments now and into the future.
She said each application is evaluated on a case-by-case basis, taking into account a range of factors to determine the amount that can be borrowed.
We also called HSBC, NatWest and Lloyd’s -But they didn’t come back to us.
Peak: PA
What should you do?
If you think your gambling habits may be causing you a problem, there are steps you can take.
Matt Zarb-Cousin, co-founder of gambling blocking program Gamban, said people should start looking at their behavior if they are chasing losses, getting caught up in gambling and thinking about their next bet, and losing interest in other activities.
“These behaviors often lead to you chasing huge losses in a gambling session causing significant financial damage that can affect you for weeks or even months,” he said.
“Being able to spot the signs before you get to that point, and quit smoking, can prevent this from happening in the first place.”
If you want to stop gambling online, talkbanstop.com offers free tools and support.
Banks also offer the option to block gambling transactions, providing another layer of friction that can help prevent relapse, Zarb-Kozin said.
“Gambling transactions can impact mortgage applications, but the main concern for lenders is not getting into debt to finance gambling,” he said.
He noted that lenders often look at bank statements for the past three to six months, so even resigning for this period of time before applying can put you in a better position.