Skip to main content

Bad credit mortgages

Tell us about yourself and our broker partner Mojo will find the best bad credit mortgage rates for you

Compare bad credit mortgages from 90+ lenders across the whole of market

NatWest 2
Barclays 2
Lloyds 2
nationwide 2
Royal bank of Scotland 2
TSB 2
Halifax 2
Accord Mortgages 2
Santander 2
HSBC 2
Lady working at a desk at home

What is bad credit? 

Bad credit is a blanket term used to describe a wide variety of personal finance issues that are recorded on your credit file. They range in severity from missing a single payment, right through to bankruptcy. All of the following circumstances would fall under the umbrella of having bad credit and are loosely in order of severity:

  • No credit score due to never having used credit

  • Missed or late payments

  • Defaulted payments

  • Been served a County Court Judgement (CCJ)

  • Debt management plans or Individual voluntary arrangement (IVA)

  • Mortgage arrears

  • Bankruptcy and repossession

If you have bad credit, getting a mortgage can be more difficult. That said, there is a specific niche of lenders that are set up to help with bad credit applications. They are more flexible with the type and extent of bad credit that they are willing to consider than mainstream lenders, and are often referred to as bad credit lenders or subprime lenders.

How to find bad credit mortgages

Tell us about yourself

Fill in your details to help us understand your mortgage situation and select the right options for you.

Get recommendations

Get personalised mortgage recommendations that are suited to your individual needs.

Secure your deal

Our broker partner Mojo offers expert mortgage advice and can help secure the best mortgage deal for you.

What minimum credit score do I need to get a mortgage? 

Usually when you have bad credit, you will have a low score on your credit report. However, each of the three major credit referencing agencies, Experian, Equifax and TransUnion use a different scoring system. This means what sounds like a low score with one, may not be so severe with another, or vice versa. 

When it comes to your mortgage application, the vast majority of lenders will use your credit score to help them decide whether to lend to you or not. However, each lender has their own idea of what constitutes bad credit and the minimum score they are willing to accept. 

There is no threshold that applies across the mortgage industry, however, and the minimum credit score acceptable by each lender will depend on their individual criteria, and which referencing agency they use. In fact, some lenders, especially those specialising in bad credit mortgages, ignore the score entirely and base their decision on your wider credit picture. 

The good news is, this means that being rejected by one provider does not necessarily mean that you would be by all. A broker who specialises in bad credit mortgages should be able to help you find a lender to suit your needs.

How would a mortgage with bad credit work? 

Mortgage lenders who are more open to applicants with lower credit scores may refer to their products as bad credit mortgages, however, this is simply to show that they are available to borrowers in these circumstances. 

The actual mortgage itself will be exactly the same as any other mortgage, other than the interest rate being higher. You may also have to pay higher fees, so it’s important to always consider the total cost when you compare bad credit mortgages. 

The rate of interest you pay on a loan of any kind depends on how much of a risk the lender believes it is taking by lending to you, which is why interest rates on bad credit mortgages are higher. Your credit history suggests to the lender that you pose a higher risk of not making your repayments on time.

Can I get a bad credit mortgage? 

You can get a mortgage if you have bad credit or a low credit score, but it will be more difficult than if you had a clear credit history. There will be fewer lenders willing to approve your application, however, there are lenders who specialise in bad credit lending. 

There are a number of risk factors that lenders will look at when assessing a mortgage application, so your best chance is to ensure that the rest of your circumstances match lender criteria well, for example, in terms of affordability and the type of property you’re looking to buy. It will also help if you can offer a larger than minimum deposit, or more equity, in the case of a remortgage. 

Applying for a mortgage agreement in principle, prior to your full application, will help you to gauge the likelihood of being accepted, without having to damage your credit file further with hard searches, as only soft searches are carried out by the majority of lenders at this stage. If you’re concerned about this, you can check with the lender or your broker before the searches are done, and they will be able to confirm whether a soft or hard search will be carried out.

How to increase your chances of getting a mortgage with bad credit? 

To maximise your chances of securing the loan you need when you have bad credit, ensuring all of the below factors are addressed will put you in the best position:

Find a broker

Mortgage brokers can help you to find the best mortgages for bad credit and can sometimes use their relationships with lenders to convince them to accept borderline applications. Look for one who compares the whole market and/or specialises in bad credit mortgages. And remember to check how much they charge before signing up.

Save a bigger deposit

The bigger your deposit, the less risk to the lender, as owning a smaller percentage increases the likelihood it can sell the property without losing money should you default on the loan. That’s why the best bad credit mortgages are often only available to borrowers with larger deposits of, say, 40% of the property value.

Check your credit record

Mistakes and out-of-date information can damage your credit score, so it’s worth checking the details are correct. You can do this by contacting the UK credit reference agencies TransUnion, Equifax and Experian and asking for copies of the reports they hold on you. The reports cost £2 each. If you want to monitor your file, you can also pay monthly for ongoing access.

Rebuild your credit score

There are many reasons why your credit score may have been damaged, from missed credit card payments to relationship breakdowns. Over time, you can build your score by showing you can be trusted to control your spending and pay bills on time. You may also be able to give it an immediate boost by closing unused credit accounts.

Sort out your finances

Ways to take control of your money and improve your chances of getting a mortgage include:

  • Paying your bills and debt repayments on time

  • Reducing any outstanding debts where possible

  • Putting any spare money into a savings pot for your deposit

Get a guarantor

If your credit score is preventing you from getting a mortgage, it may be worth considering asking a relative to act as a guarantor. Having a guarantor does not always mean your application will be accepted, but it should improve your chances, as the guarantor - usually a property owner - is responsible for making the repayments should you fail to do so. Remember their home could also be at risk should your mortgage fall into arrears.

How to apply for a mortgage with bad credit

If you have a bad credit record, your mortgage options are likely to be more limited and less competitive than those available to people with better scores. However, mortgage lenders conduct credit checks on all potential borrowers, so there’s no point in trying to hide your credit problems when applying for a mortgage. In fact, being dishonest about your credit history will actually go against you. 

Some lenders will be more sympathetic to certain reasons behind bad credit than others, so, for example, being in debt because your partner passed away and you have struggled to live on a single income will be seen in a better light than simply being in debt due to irresponsible spending habits.

The severity of your credit issues will dictate whether or not you are able to get a mortgage approved immediately, and the more severe the issues are, you may need to wait before you apply. 

If you’ve got a history of defaults or CCJs, it can sometimes be six to 12 months before mainstream lenders will accept your application, whereas with more severe issues, such as bankruptcy, many will want you to have been quite a few years clear of it before you can apply. 

Specialist bad credit lenders are more open to those applicants on the severe end of the bad credit spectrum, but bankruptcy and repossession are both scenarios where you may end up having to wait for your credit status to improve. A mortgage broker will be able to help you work out how likely you are to be accepted now, or how long it’s best to wait, if necessary.

Advantages of getting a mortgage with bad credit

  • You can buy a home now, rather than waiting

  • You can lock in today’s prices, both in terms of property cost and interest rates, which may go up in the future

Disadvantages of getting a mortgage with bad credit

  • Higher interest rates

  • A larger deposit is needed

  • You might be offered a lower LTV (loan to value) on your borrowing

  • You will have less choice of lenders

Claire Flynn - Senior Mortgages Editor at Uswitch
quotation mark

Your credit history plays an important role in your chances of getting approved for a mortgage. You may need to pay higher rates if you have poor credit - speaking to an expert can help you find a deal that might be right for you”

Claire Flynn

Bad credit mortgages FAQs

Read more

Bad credit rating - How to improve credit rating

How to dispute your credit report | Uswitch

Have you checked your credit report and found incorrect information? Read our guide to learn how to dispute your credit report and prevent errors and fraud from damaging your credit score.

Learn more
Grandfather with his baby grandchild

Equity Release Mortgages | Uswitch

Find out everything you need to know about equity release mortgages and compare quotes to find the best deal for you.

Learn more
Young man and woman sitting at a table

Compare Shared Ownership Mortgages | Uswitch

Shared ownership is aimed at those who can't afford a mortgage on an entire home. It is designed to help people get onto the property ladder.

Learn more