Should I close unused credit cards before applying for a mortgage?
Reducing or closing unused credit-card limits can improve some home-loan servicing outcomes because lenders may assess the available limit rather than the current balance. The effect varies by lender and your overall position.
What changes the answer
Do not close a useful card blindly: first quantify whether the limit is actually constraining the target loan.
If you reduce a limit, allow time for the change to be reflected in statements and credit data.
What to check before acting
Other liabilities, living expenses and income treatment can matter more than the card limit.
- Use your actual balance, price, term and fees.
- Keep the comparison on the same time horizon.
- Check any tax-sensitive or contract-specific point against the current source document.
Use the enquiry form for an initial broker review. No lender application is made just by enquiring.
Review my home-loan structureSources and verification
- Moneysmart — Switching home loans
- Moneysmart — Mortgage offset accounts
- APRA — Macroprudential policy settings
General information only. It is not personal financial, tax or legal advice. Finance approval, pricing and structure are subject to lender assessment and your circumstances.