Many aspiring first-time buyers could be ruling themselves out before they even apply for a mortgage due to widely-held myths, new research shows.

In a survey of more than 1,000 prospective first-time buyers, Lloyds found that 58% incorrectly believe having existing debt would automatically stop someone being approved for a mortgage, 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.

In reality, none of these factors would automatically prevent most lenders from being able to offer a mortgage, depending on the borrower’s other circumstances.

Lloyds’ research further revealed that a third of potential first-time buyers (37%) worry about being rejected for a mortgage and over half (53%) have delayed major life milestones to prioritise buying a home, including getting married and having children.

More than a quarter (27%) of those surveyed 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.

Lloyds head of mortgages Amanda Bryden says: “Buying your first home can feel overwhelming, especially when you’re trying to save for a deposit while balancing everyday costs and other life goals.

“Our research shows many aspiring first-time buyers believe they need to be debt free, have a perfect credit record or save a 20% deposit before they can even think about getting a mortgage.

“In reality, mortgage decisions are based on a much broader picture of your finances and circumstances. 

“While affordability is important, don’t rule yourself out because of misconceptions about what lenders look for.”

National Association of Estate Agents (NAEA) Propertymark president Ian Harris says: “The reality is that buying a first home is already challenging, with affordability, deposits and access to suitable housing all significant barriers.

“The last thing prospective buyers need is to rule themselves out because they believe having existing debt, being self-employed, using an overdraft, or not having a perfect credit score automatically means they cannot secure a mortgage.

“For first-time buyers, the research reinforces the value of seeking professional advice early from a regulated property agent and qualified mortgage adviser. 

“Working with trusted professionals can help prospective buyers understand their individual circumstances, navigate the process with confidence and make informed decisions about the options available to them, rather than being deterred by common misconceptions. 

“However, we must also recognise the wider affordability challenge. Helping buyers understand their options is important, but it cannot on its own resolve the fundamental pressures facing first-time buyers, including house prices, deposit requirements and the cost of living.”