Getting approved for a mortgage is a major milestone—but for many Albertans, especially younger buyers, there’s one question that looms large: Can I qualify for a mortgage if I still have student loans? The short answer is yes. The longer answer? It depends on your overall financial picture and how you approach the application process.
If you live in Alberta and have student debt, this article will walk you through what lenders look for, how to improve your odds, and why working with a Lethbridge mortgage broker like Dillan Kelly can make the process smoother, faster, and less stressful.
Understanding How Student Loans Affect Mortgage Approval
Student loans aren’t necessarily a dealbreaker when applying for a mortgage in Alberta—but they are part of the equation lenders use to assess risk. Here are two of the most important factors they’ll look at:
1. Debt-to-Income Ratio (DTI)
Your DTI compares your monthly debt payments to your gross monthly income. Lenders use this ratio to determine whether you can afford to take on a mortgage in addition to your existing obligations. In Canada, most lenders prefer a total debt service (TDS) ratio below 44%. If your student loan pushes you above that, you may qualify for a smaller mortgage—or need to pay off other debt to get approved.
2. Credit Score and Payment History
Your credit score plays a big role in mortgage approval. If you’ve consistently made your student loan payments on time, that’s a positive sign to lenders. But if you’ve missed payments or gone into default, it may impact your score and limit your options. Most lenders want to see a score above 600–650, but the higher your score, the more competitive your rate is likely to be.
Tips to Improve Your Mortgage Chances (Even With Student Loans)
If you’ve got student loan debt but still want to buy a home, here are some proven strategies to increase your chances of getting approved:
1. Keep Up with Payments
Paying your student loan on time every month not only avoids late fees—it also helps build your credit score and shows lenders that you’re financially responsible. Even making the minimum payment on time can work in your favor.
2. Lower Your Overall Debt Load
If your DTI is too high, look at ways to pay off other debt—like car loans or credit cards—before applying for a mortgage. Less debt means more borrowing room and better approval odds.
3. Consider Increasing Your Down Payment
A larger down payment reduces the amount you need to borrow and may give you more flexibility with lenders. In Alberta, if you can put down 20% or more, you might even avoid CMHC insurance altogether.
4. Boost Your Income or Apply with a Co-Signer
If you’ve recently received a raise, taken on a second job, or can apply with a partner or co-signer who has solid credit, these factors can tip the scales in your favor.
5. Get Pre-Approved to See Where You Stand
A mortgage pre-approval gives you a realistic idea of what you can afford—and shows sellers that you’re serious. It also helps identify any financial issues early, so you can address them before house hunting.
Why a Lethbridge Mortgage Broker Can Help
If you’re applying for a mortgage while carrying student loan debt, it helps to have an expert in your corner. A local Lethbridge mortgage broker can offer insights that big banks or online platforms simply can’t match.
Here’s what you get when you work with someone like Dillan Kelly:
- Local market expertise – He understands the Lethbridge and Southern Alberta real estate landscape, including what local lenders are looking for.
- Access to dozens of lenders – Instead of being stuck with one bank’s offerings, Dillan can shop around to find the best rates and terms that fit your specific situation.
- A personalized approach – He’ll take the time to understand your goals, walk you through your options, and help you choose a mortgage product that fits—not just one that “works.”
- Help with paperwork and approvals – The mortgage process can be overwhelming, especially if it’s your first time. Having a broker handle the logistics takes a lot of stress off your plate.
Local Perspective: Buying a Home in Lethbridge with Student Debt
Lethbridge is a university city, so many of its first-time buyers are balancing student loan repayment with their desire to get into the real estate market. If that’s you, you’re not alone—and there are more tools than ever to help.
Programs like the First-Time Home Buyer Incentive and RRSP Home Buyers’ Plan are available to help reduce upfront costs. Brokers familiar with these programs can help you combine them strategically, giving you more buying power even with student debt in the background.
Final Thoughts: Yes, You Can Buy a Home
Student loan debt is a common reality—but it doesn’t mean you have to delay your dream of homeownership. The key is to be realistic, informed, and proactive. A strong credit history, manageable debt, and a trusted broker can help turn a “maybe” into a confident “yes.”
If you’re ready to take the next step, reach out to a Lethbridge mortgage broker like Dillan Kelly. He’ll help you make sense of the numbers, guide you through your options, and build a plan that works—student debt and all.