1. Home
  2. Mortgages
  3. Bad credit mortgages

Bad credit mortgages

Compare bad credit mortgages

Select the type of mortgage you need

We've partnered with Koodoo to compare mortgage deals across the whole market

  • Answer 9 simple questions to see your mortgage options

  • Compare mortgage deals without harming your credit score

Can I get a mortgage with bad credit?

In short, yes if you can meet specialist lenders’ criteria. There are specialist lenders who can offer a bad credit mortgage, also known as a subprime mortgage or an adverse credit mortgage. Having a bad credit rating can make being accepted for a mortgage more difficult but this doesn’t mean it’s impossible.

These specialist bad credit mortgage lenders tend to have stricter criteria:

  • The Loan to Value (LTV) may be lower than a standard mortgage. You’ll need a deposit of at least 20% - 25% as the LTV offered could be around the 80% or 75% mark
  • They may ask for a larger deposit than a standard mortgage to meet the LTV
  • The lender’s interest rates may be higher than standard mortgage rates

What is bad credit?

There are no universally accepted criteria for what counts as having bad credit. But there are credit problems that can fall into minor and more serious cases:

A minor case would be a one-off late credit card payment. This shouldn’t affect your chances of getting a mortgage.

A serious case would be if you’ve been declared bankrupt or had a county court judgement (CCJ) in the last few years. Mortgage lenders are likely to consider these a more serious case and could potentially affect your chances of applying successfully for a mortgage.

Credit problems, little or large, are recorded on your credit history. Lenders can view your credit report to get an idea of how you’ve handled your credit in the past. This gives them a snapshot into your financial history and helps them decide whether they’ll lend to you or not.

How can I improve my chances of being accepted for a bad credit mortgage?

  • Improve your credit history
  • Register to vote
  • Look at past shared financial history
  • Check your credit report
  • Take your time
  • Appeal to lenders
  • Gifted money from family for a deposit
  • Having a family member become a guarantor
  • Speak to a mortgage or financial advisor

Improve your credit history by borrowing credit responsibly and making your repayments on time. This can even be as simple as spending on a credit card and making sure you clear the balance on time, every month. It’s not a quick process but can begin to repair your credit history.

Registering to vote at your current address is an easy win for improving your credit score.

Consider old friend’s and your partner’s financial history when you apply for a mortgage. It’s important to consider who you’ve shared financial payments within the past. This could be an old housemate or partner that you used to share an account with.

Check your credit report with a free credit service to check your credit report. Credit check companies like Experian or Clearscore can give you a general idea of how lenders view your financial identity. They can give you tips on how to rebuild your score too.

Take your time. Depending on the credit problem, some marks on your credit history may disappear over time. This means certain lenders might consider your mortgage application even after you’ve gone through bankruptcy, an Individual Voluntary Arrangement (IVA) or a CCJ. The timescale can vary from lender to lender, so it’s always worth checking with them to get more information.

Appeal to the lender by applying when you’ve got yourself in the best financial position you can be in. A regular, stable income is always a big plus, as is a big deposit. If you do have some credit issues from the past, the lender will be able to see you’ve made recent efforts to fix your financial issues.

Gifted money from family can be used for a deposit. Some lenders will accept a deposit if it’s ‘gifted’ from a member of your family. The lender won’t accept a gifted deposit that’s a loan, so you must be under no obligation to pay the money back.

Having a family member become a guarantor could be a great option if you find yourself unable to get a mortgage. A guarantor is someone, such as a family member or parent, who takes on some of the risk of the mortgage. A guarantor will usually have to offer something to the lender to cover the mortgage payments if you start to miss them. For example, using their home as security against the loan.

Speak to a mortgage or financial advisor if you have concerns about how your bad credit could affect you getting a mortgage. You may have to pay for this service, but they could help you find a good mortgage deal in the future.

Compare up to 20 mortgage lenders all in one place

The pros and cons of a bad credit mortgage

  • If you’ve been rejected by the big high street lenders, that doesn’t mean you can’t find a deal. There are specialist lenders you can apply to and help you get a mortgage. Make sure to shop around as best you can to find the right deal for your financial situation.
  • Being able to get on the property ladder is a big plus. If you’ve found the perfect property and the right mortgage deal, successfully making your repayments every month can help improve your credit history.
  • In the right situations, such as when the housing market has slowed down, you may stand a better chance of negotiating a better price for a property you’re looking at.
  • Deciding to get a bad credit mortgage now means you have less time to build up your credit score. If you decide to wait and work on improving your credit report, you could find yourself being able to shop around for better deals on a wider choice of mortgages.
  • It means having less time to save for a deposit. The larger your deposit, the more likely you are to be accepted by a lender, as it shows you can handle your finances.
  • A bad credit mortgage will generally mean being charged higher interest rates, which means you’ll pay more back in the long run. If you decide to wait and work on your credit score and financial situation, you may find a better deal with better rates.

How do I compare bad credit mortgages?

Working with our mortgage partner, Koodoo, we can help you compare and find our best deals for bad credit mortgages. To see what offers are available to you, simply go through the application process and you’ll be able to compare from a range of specialist lenders.

What do I need before comparing bad credit mortgage deals?

Having the following information ready will help make comparing bad credit mortgages a bit easier:

  • Details of your salary and any other income you earn. If you’re buying with a partner, have details of their salary and any additional income too
  • Details of your regular monthly outgoings
  • How much you’re looking to borrow from the lender and how much your deposit will be
  • If you’re going to live in the property you’re buying or let it out
  • Whether you’re getting help from a government buying scheme

See how much your future monthly repayments could be with our calculator

Who can I speak to for financial support or advice?

If you find yourself in financial difficulty or want to speak to someone about your financial situation, the Money Advice Service can help. It’s a free, impartial service set up by the government to provide advice and support online and over the phone.

Visit the Money Advice Service to find out more about the services they offer.

You should think carefully before securing debt against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Confused.com is not a mortgage intermediary and makes introductions to Koodoo to provide an information-only mortgage online comparison service. Confused.com's mortgage solution is provided by Koodoo. Koodoo is the trading name of Mortgage Power Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 845978), and is a registered company in England and Wales (company registration number 10978680), with a registered address at Scale Space, 58 Wood Lane, London, W12 7RZ.
Confused.com will receive a share of the commission that Koodoo earns from the provider.