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Bad credit and mortgages

If you are worried about money, don't wait to get help. Find out if you need debt advice by taking two minutes to answer some quick questions.

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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 will look at your budget and options in a debt advice session.

Can I get a mortgage with bad credit?

Yes, you might be able to do. But it may not be the right thing for you. You need to bear in mind that Lenders will probably want:

  • A larger deposit from you
  • For you to pay higher interest rates

There are lenders who specialise in mortgage products for people with bad credit scores. These products include:

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

But these mortgages may not be affordable. Lenders may cover their risk of lending to you by increasing:

  • The interest rates
  • The monthly payments

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

How do I know if I can afford a mortgage offer?

You need to bear all the costs in mind. Such as:

  • The monthly repayment amount
  • Any fees, including to set up or change the deal
  • The term of the loan
  • Changes to interest rates

How does interest affect your mortgage?

A normal 'capital repayment mortgage' has monthly payments.

These payments cover the interest charged and paying off some of the capital.

The 'capital' is the starting amount you borrowed

As the capital reduces, the amount of interest also reduces.

This means:

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

Let's say you pay £1,000 a month:

At first this works out at:

  • £850 going towards the interest
  • £150 going to the capital

Then, as the mortgage gets smaller:

  • £350 could go to the interest
  • £650 to capital

But if interest rates go up, your monthly payments will 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 each month
  • But if the interest goes up to 6%: Your payments are now £660 a month

Read more about mortgage interest rates here.

Unlock your options as a homeowner

Find out more about how to deal with mortgage arrears, fixed rate ending, how debt can affect your home - and more.

Read our guides

Check the mortgage deal against your monthly budget

When you create a monthly budget you can see:

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

This helps you understand what you can really afford.

Read our guide to making a budget.

Can I get a mortgage if I am on a debt solution?

It depends on the debt solution because they affect you in different ways.

You will need to weigh up how a debt solution can affect your mortgage before going ahead.

Other ways to pay off your debts may be better for you.

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 ways of using credit records.

It is always a good idea to make sure you:

  • 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.

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We have helped millions of people since 1993.

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