Bad credit mortgages

Applying for a mortgage with bad credit isn’t easy, but the good news is that it is possible. Not only will you need to find a suitable lender, but you’ll also need to assess the mortgage rates on offer.

Getting a mortgage with bad credit can be especially hard if you have multiple credit issues. For instance, having a single CCJ can be enough for some lenders to decline you. This is why additional credit issues such as an IVA or defaults will make mortgage approval even more difficult.

Mortgage lenders will assess a lot more than your credit history. This is why it’s recommended to speak to an advisor that has experience with bad credit.

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Can I get a mortgage with bad credit?

Getting a mortgage with bad credit is possible, but only with the right approach.

Many high-street mortgage lenders typically don’t accept applicants with bad credit. This is due to assessment procedures that lenders must adhere to. As a result, getting a mortgage with bad credit is often difficult.

On the other hand, there are specialist bad-credit mortgage lenders. Their mortgages are specifically designed for those with a poor credit history. Life can be unpredictable and it’s understandable that your credit file can take a knock along the way.

Although some lenders may approve you, they may charge higher than average rates to compensate for the risk involved. You may also be required to use a higher deposit than normal.

bad credit mortgage survey

How to get a mortgage with bad credit

There are certain measures you can take to help you get a mortgage with a poor credit history.

  • Start repairing your credit file
  • Speak to an experienced advisor
  • Download your credit reports
  • Highlight the strengths of your application
  • Don’t hide anything from your lender
  • Be prepared for questions relating to your credit issues

Download your credit file if you haven’t already. This will give you a good indication of what lenders will see when they carry out a credit check.

Showcase your application’s strong points to help improve your chances of getting a mortgage. For instance, if you have a large income and deposit, make sure your lender knows about it. Always be open and honest and be prepared for questions relating to your credit problems.

Repairing your credit file before applying for a mortgage

If you have bad credit, improving your credit file is crucial. Repairing your credit file won’t just help you get a mortgage, but it will also help your finances in general.

Improving your credit score can take some time, so it’s a good idea to get started as soon as possible. Lenders will also see that you’re being proactive about improving your credit score which can also support your mortgage.

Read more: How can I improve my credit score?

Speak to an advisor who has experience with bad credit

Speaking to an advisor who has experience with bad credit is perhaps one of the best things you can do in your quest to get a mortgage.

This is because an experienced advisor will:

  • Assess your circumstances to let you know what’s possible
  • Compare the mortgages you qualify for
  • Approach lenders on your behalf
  • Remove lenders from your search that you’re not eligible with
  • Help to minimise your chances of being declined

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Which mortgage lenders accept bad credit?

Mortgage lenders that accept bad credit include:

  • Aldermore
  • Barclays
  • Bluestone
  • Halifax
  • Pepper Money
  • Precise Mortgages
  • Royal Bank of Scotland
  • Santander
  • Vida Homeloans

Important: Each of these lenders will assess your application on a case by case basis. You won’t be guaranteed a mortgage if you apply with any of the mentioned lenders. For instance, Precise Mortgages will consider a poor credit score, but won’t consider CCJs and bankruptcies.

It’s also important to note that this is not an exhaustive list. There are over 100 lenders that each have different criteria relating to bad credit. This list also doesn’t include specialist bad credit mortgage lenders.

Bad-credit mortgage rates

It’s important to understand that you may qualify for a regular mortgage. In other words, even if you have bad credit, you may still be approved of a regular mortgage with competitive rates.

You can view today’s mortgage rates here

If you require a specialist mortgage lender, then the rates offered will be higher than average. Be prepared for interest rates of up to 3% as a first-time buyer. If you have severe bad credit, the rates offered can be much higher.

As a home mover, lenders will assess your existing mortgage payments. If you’ve not had any issues repaying your existing mortgage, lenders may offer you rates from around 2%.

With any fixed-rate mortgage, the introductory rate will be fixed for 2, 3 or 5 years, possibly even longer. Your mortgage rate will then revert to a higher rate once the initial period is over.

Important: Although mortgage rates for bad credit may not seem low, the fees are often high. This can result in your APRC% (Annual Percentage Rate of Charge) being around 4%. Furthermore, the scope of your credit issues will also have an effect on the rates you’re offered.

Does the type of bad credit I have matter?

The type of credit issues you have will make a difference in whether you can get a mortgage or not. This is because some credit issues will affect your chances of getting a mortgage more than others.

Late payments

Missed payments aren’t deemed to be severe and shouldn’t affect your chances of mortgage approval. That said, the types of payments you’ve missed will certainly matter. For instance, missed mortgage payments can be a huge red flag for some lenders.

Your lender will want to understand why you’ve fallen behind and whether or not you’ve recovered financially. On the other hand, if you missed a mobile phone payment a few years ago, it’s likely not to be mentioned.

Learn more: Getting a mortgage after late payments

County court judgements (CCJs)

A county court judgement will stay on your credit file for six years. If your CCJ happened over six years ago, then it shouldn’t affect your chances of getting a mortgage.

If your CCJ was recent, then lenders will want to know what happened. Furthermore, satisfying your CCJ before applying for a mortgage is often recommended. The majority of lenders won’t offer you a mortgage if you have an unsatisfied CCJ.

The size of your county court judgement will also be assessed during your application. Larger CCJs are considered to be more severe than smaller sums. That said, some lenders won’t consider you at all, irrespective of how big or small your CCJ is.

Find out more: How to get a mortgage with a CCJ

Defaults on your credit file

Similar to missed payments, certain defaults will be more severe than others. If you have a registered default on your credit file, your lender will investigate further.

Having a number of defaults in comparison to a single default will also make mortgage approval difficult to come by. Defaults that took place a number of years ago won’t have a huge effect, but it’s still important to select your lender carefully. This is because some mortgage lenders won’t accept defaults at all.

Read more: Getting a mortgage with defaults

Debt management plan (DMP)

If you’re on an active debt management plan, then getting a mortgage will be near impossible. Lenders will require you to have completed your DMP and may also require an additional year before they’ll consider you for a mortgage.

It’s also important to keep up with payments during your DMP. This is to ensure your credit file isn’t damaged any further.

Learn more: How to get a mortgage with a DMP

Individual voluntary arrangement (IVA)

If you’re in an active IVA, you’ll need to wait until it completes before you can apply for a mortgage. Some lenders may also require an additional number of years after your IVA before they’ll consider you for a mortgage.

Missing payments or falling behind during your IVA will damage your credit file quite severely. It’s important to keep your credit file intact after your IVA, as any more credit issues will make it very hard to get a mortgage.

Find out more: Getting a mortgage after an IVA


Most high street lenders will simply decline anyone with a history of bankruptcy. Even as a discharged bankrupt, it can be very difficult to get a mortgage.

The good news is that there are specialist lenders that will consider you for a mortgage after bankruptcy. It’s important to speak to a specialist before you apply, as your mortgage application will need planning carefully.

Learn more: How to get a mortgage after bankruptcy

Other credit issues

There can be many credit issues affecting your chances of getting a mortgage. Furthermore, you may have more than one credit issue on your file.

Other credit issues that can affect your chances of getting a mortgage include:

Speak to an advisor if you’re still unsure of whether you should apply for a mortgage.

bad credit mortgage statistics

Can I remortgage with bad credit?

It’s possible to remortgage with bad credit and it can be a lot easier, as you already have a mortgage. Furthermore, the rates on offer are likely to be cheaper than your lender’s SVR (Standard Variable Rate).

If you’ve fallen behind on your mortgage payments, then it may be better to wait before you remortgage. Late payments aren’t considered to be a severe credit issue but they can still be a cause of concern.

You’ll want to calculate whether a remortgage will save you money. Although it’s likely it will, it’s important to remember you’ll be tied into your mortgage for a number of years. For this reason, it can sometimes make better financial sense to improve your credit score before applying for a mortgage.

Learn more: How to remortgage with bad credit

How much deposit will I need for a mortgage with bad credit?

A 15% deposit is quite often referred to as an industry minimum when applying for a mortgage with bad credit. This allows for equity in your property if you fall behind with your mortgage payments.

If you need a buy to let mortgage with bad credit, you’ll perhaps need a 25% deposit. Aiming for a deposit of 40% should unlock some great deals.

Will I need a large income?

Regardless of having adverse credit or not, lenders will always assess your income. This is because they want to know whether you can repay your mortgage without difficulty. Lenders will calculate this by assessing your income and outgoings.

Typically, it’s possible to borrow up to four times your annual salary. As an example, if you earn £30,000 per year, you could potentially borrow up to £120,000. There are lenders that may lend up to five times your income and if you’re a super high earner, you could even borrow more.

Joint mortgages can be useful to cover any affordability issues. However, if one applicant has bad credit, then it can cause problems.

Read more about joint mortgages with bad credit here.


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