Can you remortgage with bad credit?
Yes, you can. Several specialist lenders offer remortgage products to borrowers with adverse credit. What you qualify for depends on the type and severity of your credit issues, how much equity (the share of the property you own outright) you hold, and your current income.
Sometimes a product transfer, where you move to a new deal with your existing lender, is easier than a full remortgage. Your current lender already knows your payment history and may not run a fresh credit check.
Why do people with bad credit need to remortgage?
The usual reason is being stuck on an expensive SVR (standard variable rate) once a fixed deal ends. With bad credit, your lender may not offer you a competitive product transfer, which can leave you paying hundreds more a month than you need to.
Escape the SVR
- SVRs typically sit at 7–8.5%, well above most fixed rates
- Even a bad credit fixed rate may be cheaper than your current SVR
- Fixing your rate gives you certainty over what you pay
Consolidate debts
- Roll high-interest debts into a lower mortgage rate
- A single monthly payment in place of several
- Bear in mind you are securing those debts against your home
Rebuild your position
- A bad credit remortgage is often a stepping stone
- Keep your payments clean for 2–3 years
- Then remortgage again onto a mainstream rate
What do lenders look at when you remortgage with bad credit?
Specialist lenders weigh up your application across several factors, not your credit score alone. Knowing what they focus on helps you prepare.
Recency of credit issues
- Problems older than 2–3 years are viewed far more favourably
- Recent problems, within the last 12 months, sharply limit your options
- The direction of travel matters: a credit history that is improving is a good sign
Severity and amount
- A £200 default is treated very differently from a £20,000 CCJ
- Several small issues can be as much of a problem as one big one
- A satisfied debt always looks better than one still outstanding
Your equity position
- More equity means a lower LTV (loan-to-value, the size of your mortgage against the property’s value) and less risk for the lender
- Borrowers with 25% or more equity have noticeably more options
- If your property has risen in value, your LTV may have improved on its own
Payment history on your current mortgage
- A clean mortgage payment record counts heavily in your favour
- Lenders draw a line between a few missed credit card payments and missed mortgage payments
- Two years of clean mortgage payments opens up far more doors
Product transfer vs remortgage with bad credit
If your credit problems appeared after you took out your current mortgage, a product transfer may be the simpler route.
| Product transfer | Full remortgage |
|---|---|
| Your lender already knows your mortgage payment history | Access to the whole market including specialist lenders |
| Often no full credit check or affordability assessment | May find a better rate than your current lender offers |
| No legal costs or valuation fees | Full credit check and affordability assessment required |
| A quicker, simpler process | Legal work and valuation needed |
Ask your broker to check your current lender’s product transfer rates first. If they are competitive, the ease and lower risk of staying put can outweigh a slightly cheaper rate somewhere else.
How to improve your chances of being accepted
You cannot wipe your credit history overnight, but there are things you can do to strengthen your application before you apply.
- 01
Check your credit reports for errors
Get reports from all three agencies: Experian, Equifax and TransUnion. Dispute anything inaccurate, such as wrong addresses, accounts that are not yours, or debts marked as unsatisfied when you have already paid them.
- 02
Satisfy any outstanding debts
If you have unsatisfied defaults or CCJs, clearing them before you apply will widen your options. Some lenders will not look at you at all while debts are still outstanding.
- 03
Maintain clean payments for as long as possible
Every month of clean credit card, loan and mortgage payments strengthens your profile. Lenders want to see that past problems are genuinely behind you.
- 04
Build up your deposit or equity
If you are overpaying your mortgage, your LTV is falling. A lower LTV opens more doors and better rates.
- 05
Use a specialist broker
A broker who understands adverse credit only sends your application to lenders likely to accept you, which keeps needless searches off your credit file.
Get expert help with your bad credit remortgage
At Clearview Mortgage Solutions, we help borrowers with all kinds of credit issues find the right remortgage. We weigh your current lender’s product transfer against specialist remortgage options across the market, then recommend the best way forward.
Get in touch for a free, no-obligation review of where you stand.