How to Get a Mortgage With Bad Credit in the UK (2026 Guide)

Can You Really Get a Mortgage With Bad Credit?

The short answer is yes — but the process is more complex, and the costs are higher. Bad credit (sometimes called adverse credit) covers a wide range of situations: missed payments, defaults, County Court Judgements (CCJs), an Individual Voluntary Arrangement (IVA), or even bankruptcy. Lenders view these as signals of financial risk, which means they either decline applications outright or offer less favourable terms.

This guide compares your main options side by side, so you can weigh up what makes sense for your situation in 2026.

What Counts as “Bad Credit” for a UK Mortgage Lender?

Before comparing options, it helps to understand how lenders assess your credit history. UK mortgage lenders typically pull reports from one or more of the three main credit reference agencies: Experian, Equifax, and TransUnion. Each scores you differently, so your number will vary between them.

Common credit issues that affect mortgage applications include:

• Late or missed payments — even one or two can flag concern
• Defaults — recorded when a lender closes your account due to non-payment
• CCJs (County Court Judgements) — a court order confirming you owe a debt
• IVA (Individual Voluntary Arrangement) — a formal repayment agreement with creditors
• Bankruptcy — the most serious entry; stays on your file for six years
• Repossession — previous property repossession is a significant red flag

Tip: Check your credit reports for free using services like Experian, ClearScore (powered by Equifax), or Credit Karma (TransUnion). Errors on your file are more common than you’d think — and you have the right to dispute them.

Option 1: High Street Lenders — Convenient but Restrictive

High street banks such as Barclays, NatWest, Halifax, and Nationwide have automated credit-scoring systems. This makes them fast and accessible, but also relatively rigid.

Pros: - Competitive interest rates if you qualify - Familiar brands with strong customer service infrastructure - Access to government-backed schemes (see below)

Cons: - Automated systems often decline applicants with any adverse credit history - Little room for nuance — a single default five years ago could still trigger a rejection - Rejections leave a hard search on your credit file, which can make things worse

Verdict: If your credit issues are minor (e.g. one late payment over two years ago), a high street lender might still consider you, particularly if you have a large deposit. However, for most people with notable adverse credit, this route is unlikely to succeed without prior guidance.

Option 2: Specialist or Adverse Credit Lenders — More Flexible, Higher Cost

Specialist lenders — such as Pepper Money, Kensington Mortgages, and Bluestone Mortgages — are specifically designed to assess applications with complex credit histories. They underwrite manually, meaning a human reviews your full circumstances rather than relying solely on a credit score.

Pros: - Will consider CCJs, defaults, IVAs, and even recent missed payments - Decisions based on the whole picture, not just a number - Can be a genuine pathway to homeownership when other doors are closed

Cons: - Interest rates are significantly higher — expect rates 1.5% to 4%+ above standard deals in 2026 - Arrangement fees and product fees are often steeper - Loan-to-value (LTV) ratios are typically capped lower, meaning you’ll need a larger deposit (often 15–25%)

Example: On a £200,000 mortgage, a standard rate of 4.5% over 25 years costs roughly £1,111/month. At 7%, that rises to approximately £1,413/month — a difference of over £300 monthly, or £3,600 per year.

Option 3: Using a Mortgage Broker — Often the Smartest First Step

A whole-of-market mortgage broker (also called an independent mortgage adviser) has access to dozens of lenders, including specialist ones not available directly to consumers. For bad credit applicants, this is arguably the most important option to consider.

Pros: - Brokers know which lenders are most likely to approve your specific profile - They use soft searches to assess eligibility before submitting a formal application - Can save you from damaging your credit file with multiple hard searches - Regulated by the Financial Conduct Authority (FCA), so they must act in your best interest

Cons: - Broker fees apply — typically £300–£600, though some are fee-free and earn commission from lenders - The process takes longer than applying directly

Always check that a broker is FCA-authorised. You can verify this on the FCA Register at register.fca.org.uk.

Option 4: Government Schemes — Worth Knowing, but Limited Scope

Several government-backed schemes can help first-time buyers, though eligibility with bad credit varies.

• Shared Ownership: You buy a share (typically 25–75%) of a property and pay rent on the remainder. Some housing associations are more flexible on credit history, but mortgage lenders for the share you’re buying still apply their own criteria.
• Right to Buy: If you’re a council tenant, this scheme allows you to buy your home at a discount. Bad credit can still be a barrier, but the reduced purchase price lowers the mortgage amount needed.
• MoneyHelper: Not a scheme, but the government-backed guidance service (moneyhelper.org.uk) offers free, impartial advice and can help you understand your options before approaching lenders.

Note: Help to Buy equity loans ended in England in March 2023 and are no longer available.

How to Improve Your Chances Before Applying

Regardless of which route you pursue, these steps can strengthen your application:

1. Check and clean up your credit file — dispute errors, ensure you’re on the electoral roll, and close unused credit accounts
2. Save a larger deposit — a 20–25% deposit significantly improves your options with specialist lenders
3. Wait, if you can — most adverse credit entries reduce in impact after two to three years and fall off entirely after six
4. Avoid new credit applications — each hard search temporarily lowers your score
5. Demonstrate income stability — lenders want to see consistent income, ideally from employment or well-documented self-employment

Comparing Your Options at a Glance

Remember: Being declined once does not mean you can never get a mortgage. Timing, deposit size, income, and the type of credit issue all matter. The right adviser can make a significant difference.

This article is for informational purposes only and does not constitute regulated financial advice. Always seek guidance from a qualified, FCA-authorised mortgage adviser before making financial decisions.