Can you get a mortgage with bad credit?
Yes, you absolutely can get a mortgage with bad credit in the UK. While high street lenders may reject your application, there are dozens of specialist lenders who specifically cater to borrowers with adverse credit histories. The key is understanding what each lender considers acceptable and presenting your application in the strongest possible way.
Your chances of approval depend on several factors: the type and severity of the credit issue, how long ago it occurred, how much deposit you can put down, your current income, and whether you are using a specialist broker who knows which lenders to approach.
What counts as bad credit?
Bad credit is a broad term covering a wide range of issues on your credit file. Lenders assess each differently, and some carry more weight than others. The most common types of adverse credit include:
- Late payments — missed or late payments on credit cards, loans, or bills
- Defaults — formal notices issued after persistent non-payment, typically after three to six missed payments
- County Court Judgments (CCJs) — court orders to repay debts
- Individual Voluntary Arrangements (IVAs) — formal agreements to repay creditors over a set period
- Bankruptcy — the most severe form of insolvency
- Debt Management Plans (DMPs) — informal agreements to repay debts at a reduced rate
- Repossession — having a previous property taken back by a lender
- Low credit score — a thin or poor credit history without specific adverse events
Important: Lenders look at your entire credit profile, not just individual marks. A single small default from several years ago is treated very differently from multiple recent CCJs.
Which lenders accept bad credit?
The UK mortgage market has a tiered structure when it comes to credit requirements. Understanding this hierarchy helps you target the right lenders and set realistic expectations.
High street lenders
Banks like HSBC, Barclays, NatWest, and Lloyds have the strictest lending criteria. They typically require a clean credit history for the past three to six years. Minor issues like a single late payment may be overlooked, but defaults, CCJs, or any insolvency markers usually result in an automatic decline.
Building societies
Some building societies take a more sympathetic approach and assess applications on a case-by-case basis rather than relying purely on automated credit scoring. This makes them a useful option for borrowers with minor or historical credit issues.
Specialist adverse credit lenders
Lenders such as Pepper Money, Kensington Mortgages, Aldermore, and Together Money specifically design their products for borrowers with adverse credit. They accept a wide range of credit issues including recent defaults, CCJs, and even active IVAs or recent bankruptcies in some cases.
These lenders charge higher interest rates to reflect the additional risk, but they provide a genuine route to homeownership for borrowers who would otherwise be locked out of the market.
How does the severity of your credit issue affect your mortgage?
Late payments and missed payments
These are the least severe form of adverse credit. Many mainstream lenders will overlook one or two late payments, particularly if they are more than 12 months old. Specialist lenders are even more flexible and may accept applications with multiple recent late payments.
Defaults
A default stays on your credit file for six years from the date it was registered. The impact on your mortgage options depends on the amount, the age of the default, and whether it has been satisfied (paid off). Satisfied defaults older than two years are accepted by many specialist lenders with competitive rates.
CCJs
County Court Judgments are more serious than defaults. A satisfied CCJ older than two years gives you access to a reasonable range of specialist lenders. An unsatisfied CCJ within the last year significantly limits your options and typically requires a larger deposit.
IVAs and bankruptcy
These are the most serious credit events. Most lenders require a minimum of one year after discharge from an IVA and three years after bankruptcy discharge before they will consider an application. A larger deposit of 15% to 25% is usually required.
How much deposit do you need with bad credit?
Deposit requirements are generally higher for borrowers with adverse credit. As a general guide:
- Minor adverse credit (old late payments, satisfied defaults over 2 years) — 10% to 15% deposit
- Moderate adverse credit (recent defaults, small CCJs) — 15% to 20% deposit
- Severe adverse credit (IVA, bankruptcy, repossession) — 20% to 25% deposit
- Very severe or recent issues — 25% to 40% deposit
Some specialist lenders offer 85% loan-to-value products for borrowers with moderate credit issues. However, the best rates are typically available at 75% LTV (25% deposit).
Watch out: Some lenders offering mortgages to borrowers with bad credit charge significantly higher arrangement fees and interest rates. Always compare the total cost of the mortgage over its full term, not just the headline rate.
What interest rates can you expect?
Interest rates for bad credit mortgages are higher than standard rates, reflecting the additional risk the lender takes on. As of 2026, typical rates for adverse credit mortgages range from 1% to 4% above standard high street rates, depending on the severity of your credit issues and your deposit size.
For example, if a standard two-year fixed rate is around 4.5%, a borrower with moderate adverse credit might pay 6% to 7%, while someone with severe credit issues could pay 8% or more. However, you are not locked into these rates forever. Many borrowers take a bad credit mortgage as a stepping stone, rebuild their credit over two to three years, and then remortgage to a mainstream lender at a much better rate.
How to improve your chances of approval
- Check your credit file — review your reports with Experian, Equifax, and TransUnion. Correct any errors and make sure all satisfied debts are marked as settled
- Register on the electoral roll — one of the quickest ways to boost your credit score and proves your address to lenders
- Pay down existing debts — reducing outstanding balances improves your debt-to-income ratio
- Avoid new credit applications — multiple hard searches in a short period lower your score and signal financial distress
- Build a savings track record — regular saving demonstrates financial discipline and helps you accumulate a larger deposit
- Time your application — the older your credit issues, the more options you have
Why use a specialist bad credit mortgage broker?
A specialist broker is arguably the single most important factor in getting a bad credit mortgage approved:
- Market knowledge — they know which lenders accept which types of adverse credit, saving you from unnecessary rejected applications
- Direct relationships — many specialist lenders only work through brokers
- Packaging your application — experienced brokers present your case in the most favourable light
- Whole-of-market access — they compare products from dozens of specialist lenders
- Saving money — placing you with the right lender first time avoids costly declined applications
Nesto tip: Every failed mortgage application leaves a hard search on your credit file, which can further reduce your score. Using a broker who knows which lenders will accept your profile avoids this damaging cycle of rejections.
Steps to getting a bad credit mortgage
- Get your credit reports — download your full reports from all three UK credit reference agencies
- Speak to a specialist broker — share your full credit history honestly so they can assess your options
- Get an Agreement in Principle — your broker will approach a suitable lender, usually using a soft search
- Prepare your documents — gather proof of income, bank statements, ID, and evidence that credit issues have been resolved
- Submit your full application — your broker will package and submit to the chosen lender
- Valuation and underwriting — the lender values the property and reviews your application
- Mortgage offer — once approved, you receive a formal mortgage offer
Can you remortgage with bad credit?
Yes. If you already own a property, you can remortgage with bad credit using specialist lenders. Remortgaging can actually be easier than purchasing because you already have equity in the property, which reduces the lender's risk. If your property has increased in value, you may have a lower loan-to-value ratio, which opens up better rates even with adverse credit.
Get matched with a bad credit mortgage broker
Nesto connects you with experienced, FCA-regulated mortgage brokers who specialise in adverse credit applications. Our matching service is completely free with no obligation, and your broker will have whole-of-market access to find the best deal for your circumstances. Get matched free today and take the first step towards your mortgage.