Should I pay off my student loan before buying a house?


6 Answers 6


Paying off your student loan before buying a house is certainly a great risk reduction move for you. It will lower your debt to income ratio allowing your mortgage approval to go easier and it will free up more of your dollars to pay for the many miscellaneous projects that come with buying a house.

I think that if you are considering paying off your student loan before buying a house that means that your student loans are an amount you can fathom paying off and that you are motivated to be rid of your student loan debt.

Go for it and pay off your student loan.

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    I think this very much depends on the terms of the student loan and how it affects credit, which in turn will very much depend on the country in question. Commented Aug 7, 2010 at 16:14

It depends on the terms. Student loans are often very low interest loans which allow you to spread your costs of education over a long time without incurring too much interest. They are often government subsidized.

On the other hand, you often get better mortgage rates if you can bring a down payment for the house. Therefore, it might be more beneficial for you to use money for a down payment than paying off the student load.


There may be specific answers that can be determined based on the interest rates, amounts, tax provisions, etc. But I'm here to tell you...

It is much easier (i.e., less stressful) to own a home when you have less debt. Pay off any and every debt you can before purchasing a home because there will always be something requiring you to spend money once you own one.


It might be a good idea, because later in life if a large expense shows up or an income source disappears, you will only have the mortgage payment, rather than a mortgage AND a student loan payment.


One extremely important aspect that must be taken into consideration is the state of the housing market. If prices are rising it will probably be a false economy to delay your house purchase. Say you pay off a £5,000 student loan, thus delaying your house purchase another year you could well end up forking out an extra £10,000 on the mortgage due to the rise in house prices.

Of course, if the housing market is falling then, without a doubt, pay off the student debt.


IMO student loans are junk debt that should be dealt with as soon as possible.

Buying a house comes with risks and expenses (repairs, maintenance, etc) and dealing with a student loan at the same time just makes it tougher. Personally, I would try to pay off at least a few of the loans first.

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