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Bad credit and mortgages

Helping you unlock your options as a homeowner.

Use our online contact form

Your credit history may show missed or late payments, court action and other markers. If you have a bad credit record it can make it harder to get a mortgage deal you can afford.

We may be able to help unlock your options even if you have:

  • A bad credit history
  • Debt

We will look at your budget and options in an advice session.

Due to very high demand at the moment, we are only providing our mortgage service for people who are 55 years or older.

Sorry if this means we cannot help you right now. Please read our homeowners' guides or visit the MoneyHelper website for free and impartial advice about mortgages. We hope you will find this helpful.

Can I get a mortgage with bad credit?

Yes. But it may not be the right thing.

Lenders will probably:

  • Want a larger deposit
  • Want higher interest rates

'Specialist lenders' specialise in mortgage products for people with bad credit scores. These products include:

  • Bad credit mortgages
  • Adverse credit mortgages
  • Sub-prime mortgages

These mortgages may not be affordable.

To cover the lenders' risk, they could:

  • Increase interest rates
  • Increase monthly payments

Always make sure you really can afford everything in the mortgage offer.

Can you afford a mortgage?

You need to understand:

  • The monthly repayment amount
  • Any fees, including to set up or change the deal
  • The term of the loan
  • How interest rate changes can impact you

How does interest affect your mortgage?

A normal 'capital repayment mortgage' has monthly payments.

These payments cover:

  • The interest charged
  • Paying off some of the capital
    • The 'capital' is the starting amount you borrowed
    • Your lender works this out

As the capital reduces, the amount of interest also reduces. This means:

  • More of your payment goes towards capital
  • You pay off what you owe off faster

Let's say you pay £1,000 a month:

  • At first
    • £850 could go towards the interest
    • £150 to the capital
  • Then, as the mortgage gets smaller
    • £350 could go to the interest
    • £650 to capital

But if interest rates change, your monthly payments increase.

So, let's say:

  • You borrow £100,000
  • To pay back over 20 years
  • At an interest rate of 2%
  • Your payments are £506/month

If the interest goes up to 6%:

  • Your payments are now £660 a month

Read more about mortgage interest rates here.

Shirley on Feefo says:

"Excellent second to none service. Helpful, understanding, non-judgemental, supportive throughout when arranging our debt management plan and re-mortgage. StepChange offer invaluable advice and taught how to budget. No more debt for us, no more sleepless nights."

Get help like Shirley

Check the mortgage deal against your monthly budget

Build a monthly budget to see:

  • How much you have coming in
  • How much you need to spend each month

This helps you see what you can really afford.

Read our guide to making a budget.

Can I get a mortgage if I have a debt solution?

It depends on the debt solution.

  • They work in different ways
  • They give lenders different information

Weigh up how a debt solution can affect your mortgage before going ahead.

Other ways to pay off your debts may be better.

Get free and impartial debt advice to be sure.

Find out more about mortgages and debt solutions.

Can I improve my credit score to get a mortgage?

Each lender has different rules for using credit records.

The best answer is to:

  • Pay your bills on time
  • Use credit sensibly
  • Always keep to payment agreements

You can build up your credit score by:

  • Opening a bank account
  • Taking out a credit card and making sure you pay this off in full every month
  • Getting a mobile phone contract and keeping up with payments
  • Being on the electoral roll
  • Making sure all the information on your record is correct

Read more about credit scores.

Can I remortgage with bad credit?

You may be looking to remortgage if:

There are a range of options on the market, but every lender has different rules.

Read more about remortgaging here.

Debt happens. We deal with it.

We have helped millions of people since 1993.

Find out how.

"StepChange - What A Relief"

"Would recommend StepChange to anyone who is struggling with debt. Their advisers are empathic and will bend over backwards to find the right solution for you."

Amanda, Feefo Review

StepChange Financial Solutions is a registered trading name of Consumer Credit Counselling Service (Equity Release) Ltd. Authorised and regulated by the Financial Conduct Authority. FCA reg. no. 517674.