Does Having a Mortgage in Your Name Count Against You When Renting an Apartment?

Having a mortgage isn't always a negative for apartment hunters.
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When you have a current mortgage loan, the amount of the monthly payment may become part of a potential landlord's total assessment of your financial health. If the mortgage is part of a larger, negative credit situation, it could also count against you during an apartment search. However, if it is a financial plus, it improves your chances of securing a rental.

Credit Checks

Many apartment owners run credit checks on potential tenants. Because a credit check shows your payment history with creditors, any accounts in collections, and public records such as judgments, a landlord can review your report and determine how faithful you are about paying your existing bills. When a mortgage loan appears on your credit report, the payment history on the installment agreement is of particular interest. If you consistently make payments on time, this reflects favorably on your rental possibilities. Likewise, late payments may indicate a money management or income problem.

Affordable Rent

When you applied for your mortgage, your debt-to-income ratio helped lenders determine how much money to lend you based on your ability repay the loan. In the rental industry, landlords also compare your income to your total debt payments to gauge your ability to meet a monthly lease payment. One-third of your monthly income is generally viewed as the maximum rent you should be paying. If your other debt payments, including a previously obtained mortgage, leave less than 33 percent of your earnings for rent, you may encounter difficulties securing a place.

Special Situations

If a unique situation, such as working through a separation or divorce, leads to your needing an apartment while your name remains on a mortgage, discuss the situation with your the landlord when you turn in your application. Many smaller property owners and managers maintain a degree of flexibility when it comes to tenant selection and may be able to offer you an apartment despite a few credit issues. Consider offering an extra month's rent with your security deposit to demonstrate your ability and willingness to pay.


If you default on your mortgage and face foreclosure, it remains on your credit report for seven years. This can negatively impact your ability to rent an apartment, particularly if you suffered additional financial hardships at the same time. To maximize your chances of securing a rental, keep your other debts current and apply for units with rent charges that meet the one-third of your monthly income rule.

Paid-Off Homes

After you pay off a mortgage, it may remain as a positive mark under the installment loan section of your credit report for up to 10 years. If your future landlord mentions the existence of a mortgage when discussing your credit report, make sure that she notes your payment obligation ended with the account paid-in-full.

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