Bad Credit Mortgages

Bad Credit Mortgages


489.4% APR

Representative Example: On an assumed loan amount of £750 over 12 months. Rate of interest 191.2% (fixed). Total repayment amount £1726.68 and total interest is £976.68. 12 monthly payments of £143.89. My Financial Broker is a broker, not a lender*.

* As a broker, we are unable to ascertain exactly how many customers take out a loan or the lender’s rate of interest particular to that customer, therefore our calculation is based on the mean APR of our panel of lenders.


If you have a few missed payments, or defaulted on any type of credit, it may be trickier to get approved for a mortgage with bad credit. However, using a qualified broker can help you maximise your chances of being successful whether you are looking to remortgage or are a first time buyer.

Brokers can compare the whole market and work with many mortgage providers to help find the best product for you. They will often work specifically with mortgage lenders who are willing to take a view on adverse and subprime credit histories, and provided you meet some of the basic eligibility requirements, you could get the mortgage you need and move into your dream home.

It’s often a good idea to use a bad credit mortgage calculator to see how much you can borrow and what your initial quote will be.

What is the General Criteria For a Mortgage?

  • Good to fair credit score
  • Employed with a regular income
  • Can pay a deposit towards your property
  • Can afford monthly repayments
  • Low debt-to-loan ratio (not too many loans open)

Features of Bad Credit Mortgages

Whilst mortgages for bad credit histories are available, they typically come with different terms. The average monthly interest rate is usually higher to reflect the added risk to the lender. Customers with bad credit can pay almost twice as much as customers with good credit, in terms of percentages. Overall, a bad credit mortgage will come with the following features:

  • Higher interest rates
  • Lower borrowing amounts
  • Choice of fixed or variable rates

It is good to remember though, that there are introductory periods for around 2-3 years, which can make the mortgage much more affordable. When this runs out, you have the option to get a remortgage or move to the standard variable rate (SVR) which is usually much higher. For bad credit borrowers, the SVR can be around 5%, while good credit customers may be offered a lower percentage.

The maximum loan-to-value may also be a little less, with maximums of 75% or 80% potentially available for bad credit customers. Borrowers with good credit could be offered a loan-to-value of up to 95%, though this is rare.

Bad Credit Mortgage Lenders

There are a number of lenders who offer mortgages for people with poor credit, including people with CCJs, IVAs and bankruptcies. According to information from Which?, if you use a source you need to put in a date when you obtained the information  even some of the bigger banks, such as Barclays, Halifax, RBS and Santander will consider these types of applications.

Other bad credit mortgage lenders, including Accord Mortgages, Buckinghamshire Building Society, Darlington Building Society, Kent Reliance, Skipton Building Society and Vida Homeloans may consider your mortgage application if you have been discharged from an IVA or bankruptcy order three to six years ago, and will have requirements around CCJs. For instance, some lenders will consider CCJs that are not over £500.

The important thing to remember with any bad credit mortgage provider is that you need to be honest with them. Trying to hide adverse credit will look bad, and is likely to result in your application being declined. If you’re upfront about your credit rating, you can discuss this with any potential lender and explain how you’re addressing your finances.

Man outside on laptop

Why You Should Use a Bad Credit Mortgage Broker

Using a mortgage broker for bad credit can help you get access to deals that may not be available from mainstream banks and lenders.

With thousands of different mortgage products around, there could be one that is perfect for you and your criteria. With specialist subprime lenders, they may be more likely to accept your credit rating and financial position – you might only find these lenders through a mortgage broker.

Brokers may also help you get a mortgage if you are on benefits or self-employed – after all, there are lenders for everyone.

Since mortgage brokers only earn through commission, they will compare the market and speak to different providers on your behalf to help you get the best deal possible.

Use Quick Ways to Boost Your Credit Score

The stronger your credit rating, the more likely that your application will be accepted. Checking your credit rating should be one of the first things you do – you can see what your current score is and see if you can improve it. You can request your credit report from the UK’s credit agencies, usually for a small fee, or use their monthly services to see how your score goes up or down over time.

There may be some fast ways to improve your credit score, such as closing down any credit cards or store cards that you do not use. Some people have found out that they had phone contracts still open, that were not being used and this was harming their credit score.

Others have joint accounts with loved ones or family members, but if the person has bad credit, it can bring down your score too. You may find that there are some quick wins to help your credit score, and ways to boost your chances of being accepted for a mortgage.

How to Get a Mortgage For Bad Credit

Many brokers can help match your mortgage requirements with trusted providers in the UK. Most will charge a fee for using their services, but your mortgage will still be cheaper with a broker in most cases, as they’ll try to find you the lowest rates.

Brokers can sometimes provide a quote on the screen, though you may be contacted by a chosen partner instead, who is best suited to your requirements. Bad credit mortgage brokers are dedicated to helping you find the best mortgage for people with poor credit histories, at the most competitive rates possible.

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