Bad Credit Mortgage Interest Rates

Important disclaimer: Just remember – no tool or calculator will tell you exactly what you qualify for. If they promise this, take it as a red flag 🚩.

Our tool gives you an idea based on how the lenders report their criteria, and the rates data we combine to help you build a shortlist and an idea of what might be possible and what it might cost.

This is no substitute for accurate and specific financial advice, so our experts are on hand to help give you the certainty you might be after.

Bad credit mortgage rates – better than you’d think

The exact rate you’ll qualify for depends on the credit issues you’ve experienced. Each lender has its own criteria, and some are stricter than others.

On average, bad credit mortgage rates can be around 1-2% higher than they are for regular mortgages, but can be higher or lower depending on your deposit amount and the issues you’ve had.

Key Factors That Impact Your Rate

Generally speaking, the rate you’ll end up with will be based on the following factors…

• The age of the credit issues (the older, the better)
• The reason it occurred (an unexpected life event is easier to excuse than general financial mismanagement)
• The severity of the issue

As you might expect, the more serious, numerous, or recent your credit issues are, the fewer lenders you’ll have to choose from. As a result, you’ll find it harder to access the best rates and could end up paying more than an applicant with a perfect credit history.

There are also other reasons why you might not qualify for a mortgage with a specific lender, including your deposit size, income, employment status and income type, or property type.

The type of credit issue you have

Generally, fewer lenders accept the more severe issues, and the rates and deposit levels needed can be higher. We’ve got the order here largely right in terms of perceived severity, and rather than explain them all in detail, just jump to our articles directly for more info:

• Late payments
• Defaults
• CCJs
• Debt Management Plans
• IVAs
• Bankruptcy
• Repossession

Why our comparison tool is great!

So, we’ve opened things up.

We’ve brought transparency to the market by allowing our visitors to search for their own mortgage if that’s what they want to do. It’s been nearly 15 years in the making for us since Pete had the idea in his bedroom, and finally, the data and technology are there to allow it. We’re all a bit emotional about it, to be honest – it’s the culmination of a lot of hard work, and to see the dreams realised is amazing.

It just needed the passion, will, and skill (thanks to our amazing team) to make it happen.

We collated datasets from industry-leading providers and carefully woven them together to allow you to apply hundreds of filters, not just for bad credit but for loads of things—hundreds, in fact.

Read more about the OMA® Engine and how it works, and remember, it’s by no means perfect. As the disclaimer states, it’s no replacement for professional advice and is NOT a tailored or personalised recommendation, but it is there to help you shortlist, benchmark, and do some research yourself.

Why comparison tables are (usually) useless

As we open up in the summary, go check out any other website. Can you find mortgage rates that suit you?

We’d guess, probably not (but please tell us if you can, they might be copying us!).

They are a series of rate tables, either custom-built or off the shelf, provided by a central source, but all rely on the data sets that don’t reveal lender policy, just rates. Most of them you can’t even filter by lender, and some of the big ones don’t even have the basics like buy-to-let mortgages!

So, if you are like most of the population, your situation will be unique to you, and there are likely at least SOME lenders you don’t qualify with, for whatever reason, be it credit history, credit score, income, age, the affordability model, the property type, etc.

Most borrowers then either just start at the top and begin the process of applying and being rejected until they find one (possibly obliterating your credit score as you go), or they use a broker to do it (which is perhaps a more sensible approach, by the way!).

Thankfully, our tool helps narrow down the search in some way (not all the way, yet).

Bad Credit Mortgage Lenders

Out of 100+ lenders across the market, there’s a wide range of lenders considering all types of credit issues. The exact lender best for you is unique to your situation and credit profile.

Some people think their credit is worse than it is – Some very small and historic issues (maybe the odd missed payment a few years ago) might play no part in your eligibility at all, and it might be you qualify with most, if not all, lenders.

Others are aware it could be better. That said, when you know there are lenders for the most severe and recent issue, like a recent bankruptcy (approx 38 lenders if discharged in the last 3 years) or even a currently active IVA (approx 8 lenders), if you’re on the right side of that and have deposit, you likely have some options available.

You can see all the lenders in the tool. A few examples of broker-only lenders here are Bluestone, Pepper Money, Vida Home Loans, Norton, West One, Aldermore… we could go on!

Why You Need An Expert

Getting the right advice when you have bad credit is absolutely essential.

Our bad credit experts help people navigate situations just like yours every day. Because they have so much experience, they know the intricacies of each lender’s policy inside out.

When you get on a call with them, you’ll see what we mean – they’ll already know what the bad credit lenders do and don’t accept, so it’ll be a simple case of establishing your situation to see who you fit with.

Usually, on the first call, they’ll give you a great idea of:

• How many lenders are highly likely to accept you
• How many might lend to you with a well-presented application
• How much you can borrow
• The deposit you’ll need
• The rates and other costs you’re likely to expect

If you need certainty quickly, we can often get you an agreement in principle with a lender the same day, depending on your situation.

How OMA® Advisors work better

Finding a mortgage with bad credit can feel overwhelming, but getting the right guidance can completely change your experience. Get an inexperienced advisor who “has a go” for you, and you’ll be stressed for weeks. The right expert will make it seem like it was all a bit too easy.

That’s why our brokers are different

• Dedicated specialists: Our team is split into departments, with brokers who concentrate solely on their area of expertise. In this case, our bad credit team assists borrowers with credit issues every day.
• Carefully selected experts: We rigorously assess and develop our advisors to make sure they have the knowledge and skills to secure the best results.
• Customer-first philosophy: We evaluate and reward our advisors on customer satisfaction, using tools like the OMA®AdvisorScore (a rating system you’ll get to use!) and real feedback, so they remain focused on achieving the right outcomes for you.

Oh yeah, and our service is protected by our 3 guarantees 

👉🏼 Read more about our guarantees

👉🏼 Find out more about our channel-expertise approach

👉🏼 Meet the bad credit mortgage experts