A guide to bad credit mortgages
Having bad credit doesn’t automatically disqualify you from getting a mortgage. Many specialist lenders consider applicants with defaults, CCJs, missed payments, and more serious issues. This guide explains what counts as bad credit, how it affects your options, and what you can do about it.
In this guide
What counts as bad credit for mortgage purposes?
- One or two missed payments are relatively common and some lenders will overlook them
- A pattern of missed payments is more serious and limits your options
- Stay on your credit file for six years from the date of the missed payment
How long do credit issues stay on your file?
6 years
Defaults, CCJs, missed payments
Most negative marks stay on your credit file for this long
1 year
Bankruptcy discharge
Discharged after 12 months, but recorded for 6 years
12 months
The turning point
Options improve markedly once issues are over a year old
Check what’s on your credit file
How much deposit do you need with bad credit?
15–20%
Minor issues
Older missed payments or a single satisfied default
20–25%
Moderate issues
Recent defaults, small CCJs, or multiple missed payments
25–40%
Serious issues
Large CCJs, IVAs, or recent bankruptcy discharge
A larger deposit also helps you access better interest rates. On a £200,000 property, the difference between a 15% and 25% deposit could save you thousands over the mortgage term.
What interest rates can you expect with bad credit?
Rates for bad credit mortgages are higher than standard products because the lender is taking on more risk. How much higher depends on the severity of your credit issues and your deposit size.
Expect to pay 1–4% above the rates advertised to borrowers with clean credit. For example, if a mainstream 5-year fix is 4%, a bad credit equivalent might be 5–8% depending on your circumstances.
The good news is that rates improve over time. Many borrowers take a bad credit mortgage initially and then remortgage to a cheaper deal after two or three years, once their credit file has improved.
How can a broker help with a bad credit mortgage?
- Every rejected application leaves a hard search on your file
- Multiple rejections in a short period make things worse
- A broker only submits to lenders likely to say yes
- Many adverse-credit lenders only deal through brokers
- They don’t appear on comparison websites
- A broker knows each lender’s specific criteria and tolerances
- Brokers can write supporting notes explaining your circumstances
- Context matters — medical issues, redundancy, or divorce can be explained
- A well-presented application is more likely to succeed
How to apply for a mortgage with bad credit
Applying with bad credit follows the same basic steps as a standard mortgage, with a few extra precautions.
Check your credit reports
Get your reports from Experian, Equifax, and TransUnion. Check for errors — incorrect addresses, accounts that aren’t yours, or debts marked as unsatisfied when you’ve paid them. Dispute anything inaccurate.
Understand your position
Make a note of every negative mark: what it is, the amount, the date, and whether it’s satisfied. This gives your broker the full picture to work with.
Speak to a specialist broker
A broker who works with adverse-credit lenders will tell you which products you’re likely to qualify for, what deposit you’ll need, and what rates to expect.
Gather your documentation
Income proof, bank statements, deposit evidence, and ID. If your credit issues were caused by specific circumstances (illness, redundancy), prepare a brief written explanation.
Apply through your broker
Your broker will package the application and submit it to the lender most likely to approve you. They’ll handle any queries and keep you updated throughout.
Consider your next move
Once you’re on the ladder, focus on maintaining a clean payment record. After two to three years you may be able to remortgage to a much better rate.
Speak to a bad credit mortgage specialist
“I thought a CCJ from three years ago meant I’d never get a mortgage. My broker found a specialist lender and I completed on my first home within eight weeks.”
At Clearview Mortgage Solutions, we work with specialist lenders who consider all types of credit issues. We’ll review your credit file, explain your realistic options, and only apply to lenders where you have a genuine chance of being accepted — no obligation.
Related guides
More guides in our bad credit mortgage hub.
Speak to an Expert
Our calculators give you a useful estimate, but your actual mortgage and protection options depend on your full circumstances, credit history and lender criteria. Clearview Mortgage Solutions’ FCA regulated—our CeMAP-qualified advisers are on hand to explain how each calculator applies to you and to help you compare real mortgage quotes from 90+ UK lenders.
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