Deposit or pay off debts?

[libby1980]

I am hoping to buy a house in the next few years, but still have quite a bit of debt to clear first (various type, bank loan, 0% credit card etc). Would a bank or building society offering me a mortgage prefer if I had debt or savings? i.e should I have �10k debt and �10k deposit, or would it be better to have a net of nil? Thank you

[EverClean]

Swings and roundabouts Libby.

Lenders will work out your affordability generally on income multiples. If you have a debt they will take the monthly payment, multiply it by twelve and take this away from your income before multiplying it. Most times no debt is better but having a deposit of at least 5% will make a big difference on the interest rate charged.