Students with poor loan history could face mortgage problems

Students who have defaulted on their loan repayments may face problems securing a mortgage under new laws.

This could mean that when first time buyers apply for a mortgage, lenders will search through their history and ex-students who have defaulted on their repayments will have a black mark.

Mform has calculated that students mount up debts of over £20,000 by the time they graduate and the average starting salary for graduates is £16,000.

Francis Ghiloni, business development director at mform, said: "Given statistics like this, many students miss one or more of their student loan repayments, and this information will soon be made available to credit references agencies and therefore the banks and financial services companies that use them."

He added that if the lenders can see a history of missed payments then "they are likely to be less willing to lend you money".

Meanwhile, Abbey has cut rates on its fixed-rate mortgages in anticipation of an interest rate cut next month.

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