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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 13th April 2021*

Many people believe that they can’t get a mortgage because they have a history of bad credit. While it’s true that some mortgage lenders prefer customers with a pristine credit report, the idea that having bad credit automatically disqualifies you from mortgage approval is a huge misconception.

Watch our video below for insight into how bad credit mortgage lenders assess eligibility and how you could still be considered for approval.

As you can see from the clip, it’s absolutely possible to get a mortgage with bad credit, and in this myth-busting guide, we go into more detail about which credit issues lenders will accept, how much deposit you’ll need, and how a specialist mortgage broker can boost your chances of success. Plus in our FAQ section, we answer the questions we hear most often from customers who are looking for a bad credit mortgage.

The following topics are covered below…

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What is a bad credit mortgage?

A bad credit mortgage is for borrowers with adverse credit, a poor credit score or low credit rating. Specialist providers will provide loans to bad credit applicants, although the rates and payments offered might be higher than for customers with clean credit. If you have enough income or a healthy deposit, it may be possible to find a competitive deal.

Specialists who sell niche financial products like this tend to be more flexible in their lending and decisions will be based on the age, severity and cause of the credit issue in question, as well as how likely they are to reoccur.

How do I get a mortgage with bad credit?

The key is finding the right mortgage lender, one who specialises in customers with your type of credit problem, fully understands it and is best positioned to lend under those circumstances. You can improve your chances by approaching a bad credit mortgage broker, as they can find you the best deals and mortgage providers to suit your needs.

Here are the steps to take when preparing for a bad credit mortgage application…

  1. Get your credit reports
    This should be your first port of call, as checking which credit issues are showing up on your Experian, Equifax and Callcredit reports will give you a good idea of the mortgage providers you’re able to approach. They’ll show your past loans, credit cards, overdrafts and even some utility bills. Remember, all three files can differ in terms of what they include, so it may be possible to find a favourable deal even if one or more of the agencies reports issues. By obtaining data from the three agencies, you can also make sure they’re up-to-date and challenge any potential mistakes.
  2. Raise as much deposit as possible and carry out credit repair
    Next, you should optimise your credit rating in preparation for your application, to minimise any risk your adverse might create. See the section titled ‘How to improve your credit rating for a mortgage’ for tips on how to do this. It may also be a good idea to raise as much extra deposit as you can at this stage, because putting down extra can also offset some of the risk involved in the deal.
  3. Avoid multiple searches
    Making multiple applications online or approaching a mainstream bank for a bad credit loan comes with the risk of being turned away. This is because not all customers with adverse are catered for, and having a number of ‘hard’ credit checks for a mortgage on your credit profile can further jeopardise your chances of getting approved.
  4. Find a whole-of-market broker
    The best way for someone with a poor credit history to get a mortgage is through a broker with access to the whole market. That way, you can rest assured that the most favourable deals you’re eligible for will be within reach. Here’s what you should look for in a broker…
  • Specialises in, and actually helps people with bad credit obtain a mortgage on a regular basis
  • Whole of market & independent
  • Reasonable and fair fee structure – they should only bill you on success
  • Gives you access to direct deals
  • Has exclusive products
  • Has links with commercial finance
  • Is whole-of-market for insurance
  • Has years of experience
  • Has plenty of happy customers

The advisors we work with have been hand-picked to ensure they have all of the above qualities, and they have a strong track record of finding the best deals for people with poor credit history.

Just having access to the ‘whole market’ doesn’t mean they know the whole market. A broker that regularly helps people with bad credit obtain a mortgage and has access to the whole market will know the ins and outs and subtle nuances of lender criteria in order to give you the best chance of getting the best mortgage available to you first time round.

How to apply

As we mentioned above, the best way to apply is through a whole-of-market broker. This way you can be sure you have access to all of the best deals you’re eligible for.

Fees and charges

Typical charges may include…

  • Arrangement fees
  • Booking fees
  • Valuation fees
  • Legal fees
  • Stamp Duty
  • Early repayment charges and exit fees

You should note that you may not have to pay all of the above, as some lenders offer inclusive deals and things like Stamp Duty may not be payable in certain scenarios.

Bad credit borrowers should also bear in mind that the additional fees they’re asked to pay might be somewhat higher than a customer with pristine credit, but that doesn’t mean finding a favourable deal is impossible.

Which credit issues will be accepted?

Repossessions and bankruptcies are considered the most severe type of adverse credit you can have on your file, while things like missed phone bill payments are problems many providers may be willing to overlook.

Specialist providers often take a more flexible approach than those on the high-street and can offer a lifeline to applicants with any of the following…

These providers often base their lending decision on the cause and severity of the adverse, the age of the credit issue, and how closely you meet their other eligibility and affordability requirements.

For example, if you are trying to get a mortgage with a CCJ, its more likely, than a mortgage combined with several bad credit issues.

Which lenders offer mortgages for people with bad credit?

A wide range of lenders will offer bad credit mortgages, from high street banks to specialist mortgage providers. The thing to keep in mind is that the lenders you an approach and the interest rate you will end up with will likely depend on the age, severity and reason for your credit issues.

To give you a snapshot of the type of lenders that offer bad credit mortgages, we’ve put together the tables below…

Not Severe
Provider Accepts people with no credit history? Accepts people with low credit scores? Accepts people with a history of late payments?
Accord Mortgages Case-by-case basis. May be considered depending on credit score and deposit amount Potentially / Maximum one missed payment in last 24 months Yes
Barclays Case-by-case basis. May be considered depending on credit score and deposit amount Potentially / case-by-case basis Yes
Bluestone Yes Potentially / no arrears in last 12 months Yes
Halifax Case-by-case basis. May be considered depending on credit score and deposit amount Potentially / case-by-case basis Yes
HSBC No No Yes
Natwest Case-by-case basis Potentially / no arrears in last 12 months Yes
Santander Case-by-case basis Potentially / no arrears in last 12 months No
Virgin Money No Potentially / no arrears in last 6 months Yes
Provider Missed mortgage payments? Default payments? CCJs? Debt Mgt Schemes? IVAs?
Accord Mortgages Maximum one in last 24 months Up to max. £500 If satisfied after 36 months. No max. value or number Satisfied – yes Satisfied, after six years – yes
Barclays Maximum three in last 24 months Up to max. £200 and satisfied Ignored after 36 months. Up to max. £200 Satisfied – yes Satisfied, after six years – yes
Bluestone Maximum four in last 24 months Up to four registered in last 36 months. No max. value Up to three registered in last 36 months. No max. value Yes Satisfied after three years – yes
Halifax Yes Yes Yes If satisfied Satisfied, after six years – yes
HSBC No Ignored after 36 months. No max. value or number (satisfied) Ignored after 36 months. No max. value or number (satisfied) Satisfied – Yes Satisfied after three years – yes
Natwest Yes – unless occurred in last 12 months Yes – only if satisfied Yes – only if satisfied Yes – only if satisfied Registered longer than six years – yes
Santander No Yes – after 12 months. No max. value Yes – if satisfied and not within last 3 months Yes No
Virgin Money Max. Two ignored afer 6 months. Yes. Max value £2000 (if satisfied) Yes – Max value £500 Yes – If satisfied No
Very Severe
Provider Bankruptcy? Repossession? Multiple credit problems?
Accord Mortgages Discharged after 6 years – yes After 6 years – yes Yes
Barclays Discharged after 6 years – yes No Yes
Bluestone Discharged after 3 years – yes After 2 years – yes Yes
Halifax Discharged after 5 years – yes After 6 years Yes
Natwest Discharged after 6 years – yes After 6 years – yes May be considered depending on the severity of the issues and when they were registered
Santander No No Yes
Virgin Money No No Yes

The tables above are accurate based on the market conditions in February 2020. Criteria can change at any time, so this information should only be used for example purposes.

For up-to-date figures and bespoke advice about which lenders you should consider, make an enquiry and we’ll introduce you to an expert bad credit mortgage broker for free.

How do they determine eligibility?

There are two main things involved in assessments when bad/poor credit is a factor:

  1. The type and severity of the issue – missed payments on bills or loans are given more leniency than more serious problems such as recent bankruptcy
  2. The date it was registered – the older your adverse credit history, the better

Anyone who has experienced bankruptcy is unable to apply for a mortgage until they have been discharged (which usually takes around twelve months). Most firms will insist on a three or four year period following the bankruptcy discharge, as well as a good credit history during that time before they will consider a loan.

Similarly, interest rates for customers who have had a property repossessed within the last three years tend to be very high, but they should steadily decrease with every passing year. The longer the customer manages to maintain financial activity without incident, the lower the risk of lending.

Do high-street providers offer bad credit mortgages?

Not always, and the ones which do might offer you unfavourable rates.

The tables below will give you an idea of how likely you are to get a loan based on the type of credit issues you have and how long you might have to wait before pressing ahead.

0-12 Months 1-2 years 2-3 years 3-4 years 4+ years
Late payments Yes (Any number) Yes (Any number) Yes (Any number) Yes (Any number) Yes (Any number)
Mortgage Arrears Yes (Usually max 3 late) Yes (Any number) Yes (Any number) Yes (Any number) Yes (Any number)
CCJs Yes (if good LTV) Maybe (If good LTV) Yes (Any value) Yes (Any value) Yes (Any value)
Defaults Yes (if good LTV) Maybe (If good LTV) Maybe (If good LTV) Yes (Any value) Yes (Any value)
Debt MGBT Unlikely Yes (If credit report is unaffected) Yes (If credit report is unaffected) Yes (If credit report is unaffected) Yes (If credit report is unaffected)
IVA Unlikely Possible with a 25% deposit Possible with a 20% deposit Possible with a 20% deposit Possible with a 10% deposit
Bankruptcy Unlikely Possible with 25% deposit Possible with 15% deposit Possible with 5% deposit Possible with 5% deposit
Repossessions Unlikely Yes (with 25% deposit) Yes (with 25% deposit) Yes Yes

Please note that these tables are for example purposes only and were correct at the time of creation (January 2020). Get in touch and an expert will go over any updates with you.

If you have any type of bad credit, the independent brokers we work with will search the entire market for the best deal based on your needs and circumstances.

How much deposit do I need?

The minimum deposit requirement for a residential property in the UK is 5% or 15% for a buy-to-let, but if you have adverse credit, some providers will only offer you a mortgage loan if you put down more deposit, depending on the age and severity of the issue.

For example, those with a repossession on their credit file may be able to get a property loan from specialist firms within 1–3 years if they put down a 25% deposit.

Those with an individual voluntary arrangement (IVA) will need between 10-25% deposit, depending on how long is left to run on the debt, and those with a bankruptcy will need between 15-25% in the first three years.

5 – 10% deposit

With the help of a specialist broker who has access to every provider, it may be possible to get an LTV (loan-to-value) between 90 and 95% with minor bad credit (some lenders will allow a mortgage with defaults if the default is for a mobile phone for example), as long as you meet the provider’s other eligibility requirements.

However, you might struggle to get a loan with severe adverse, such as bankruptcy or repossession, history as these issues usually call for a larger deposit amount to offset the risk, especially if they’re less than three years old.

That isn’t to say it’s impossible to get a great loan-to-value with these issues against your name, but specialist advice will be essential.

You might struggle more if you have severe adverse, such as a recent bankruptcy, repossession or IVA. The specialist banks and other niche agencies who offer products to borrowers with these credit issues usually need around 25% deposit, if the credit problem is less than three years old.

50% deposit

It may be possible to find a provider willing to offer you a 50% loan-to-value with bad credit, as a deposit this substantial will offset the risk involved in the deal.

You will still need to pass all of the standard eligibility and affordability checks, but a deposit of this size will certainly help your cause.

100% mortgage / no deposit

This will prove difficult as 100% mortgages are not typically offered to customers with bad credit, or anyone else, for that matter. One of the only ways to get a residential loan with no deposit whatsoever is by having a family member or close friend act as a guarantor.

With a bad credit guarantor mortgage (also known as bad credit family springboard products), the lender will secure the loan against a property your guarantor owns or against their savings, as this security can serve as an alternative to a deposit.

The process for securing this loan with bad credit is the same as applying for any other kind of property loan under these circumstances. If a provider considers you too high risk due to your adverse, having a guarantor is unlikely to change their mind on that.

Other factors that could affect your chances of getting a bad credit mortgage

Although a provider will look at your credit history when assessing your application, they might also base their lending decision on the following variables…

Remortgages and bad credit

Bad credit remortgages can be harder to arrange, and while you won’t typically be offered the same competitive rates as someone with cleaner credit, this doesn’t mean that you should settle for less.

It may be possible to remortgage with a variety of previous bad credit on your credit file, including, mortgage arrears, IVAs, defaults and CCJs.

For more information on how to remortgage with bad credit have a look through our in-depth guide on the subject or make an enquiry to speak with an expert on remortgaging with bad credit.

Can I remortgage to clear off debts with bad credit?

As mentioned above bad credit remortgages can be harder to arrange and you may not be offered the same competitive rates as someone with cleaner credit but it may still be possible to remortgage to pay off debts even with bad credit on your file.


Here you will find additional information about how bad credit can affect an application, based on the questions we’re most frequently asked.

Can I get a second mortgage with bad credit?

As long as you can pass the affordability checks, your application for a second loan is likely to be approved, even if you have poor credit. The application process will typically be similar to your first, though if you’re still paying off your first one, the main concern will be whether you can afford to meet both monthly payments at the same time.

Whether you qualify for one will depend on the severity of your credit problems, how long they’ve been on your file and how closely you meet the criteria. You’ll also need to meet the deposit requirements, and if you have poor credit, you may need to put down a larger deposit.

To ensure that you get the right deal, speak with an expert. The independent advisors we work with have whole-of-market access, meaning that they can find you the best deals even if you have bad credit.

Can first-time buyers with a bad credit history get a mortgage?

Yes, though seeking specialist advice is highly advisable because first-time buyers could be considered higher risk to some providers, and your adverse won’t help with that.

Not all providers will allow you to use one of the government’s first-time buyer initiatives (such as Help to Buy). However, a more flexible firm might permit it, as long as you meet their other requirements.

Another thing to consider is that they tend to come with larger deposit requirements, which some first-time buyers might struggle to meet. The advisors we work with will help you find the best deals for a first-time buyer with your needs, circumstances and credit history.

How far back do mortgage lenders look at credit history?

Many will typically look at the last six years, as six years is the maximum amount of time most credit issues can remain on your file.

Even if you have active adverse within this time frame, it may still be possible to get a loan, depending on the severity of the issue and when it was registered.

Can I get a bad credit mortgage if my partner has good credit?

Yes, it’s possible to get a bad credit mortgage if your partner has good credit as there are lenders who specialise in joint applications involving only one bad credit applicant. In this scenario, your bad credit will still be factored in when the overall strength of the application is being assessed, and it might mean the deals you qualify for are fewer.

That said, mortgage approval and favourable rates could still be possible if you apply through a specialist broker who knows exactly which lenders to approach.

Can I get a joint mortgage if my partner has an IVA?

Yes. You could still potentially get a joint mortgage if your partner has an IVA. Your partner’s bad credit would be factored in and will impact the overall strength of the application, but there are lenders who are more than happy to consider joint mortgage deals involving one bad credit applicant.

How do credit reports and credit scores work for immigrants?

If you’re moving to the UK from overseas, the thing to keep in mind is that you’ll arrive on these shores with no credit history. If you’re planning to apply for a mortgage, most lenders will need you to have built some up before you set things in motion, and there are a number of ways to do that, including…

  • Set up a UK bank account
  • Join the electoral register
  • Put all household bills in your name (where possible) and pay them on time
  • Consider taking out credit cards/store cards and use them responsibly, paying the balance in full each month
  • Settle any debts from your home country where possible – although credit history won’t follow you abroad, debts can

Once you find secure employment in the UK, this will help your cause since lenders will be able to see evidence of funds regularly entering your account, proving you have the means to keep up with mortgage payments.

Most lenders will need you to have at least one year’s address history in the UK before they’ll consider your mortgage application, so it might be a good idea to spend this time building up some credit in this country.

Speak to an expert

A specialist bad credit mortgage broker will be able to help you find the deals available by carrying out a comparison across the entire market on your behalf. The brokers we work with are whole-of-market experts. With access to the whole market, they can narrow down all the deals that you qualify for based on your needs and financial situation.

Call 0808 189 2301 or make an enquiry for a free, no-obligation chat and we’ll match you with a broker experienced in helping other customers in similar circumstances.

Updated: 13th April 2021
OnlineMortgageAdvisor 2021 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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