This article explains what adverse credit mortgages are, how they work, who can qualify and what steps you can take to improve your chances.
30/12/2025By Pauzible Team · Editorial Team
Buying a home is a major step in life, but for some people bad credit can make it feel impossible. If you have missed payments, defaults or a County Court Judgment (CCJ), you may worry that no lender will consider you. The good news is that there are mortgage options available for those with a poor credit history. These are called adverse credit mortgages or bad credit mortgages.
What Is an Adverse Credit Mortgage?
An adverse credit mortgage is a home loan designed for people with past credit problems. Traditional lenders, such as high street banks, usually prefer borrowers with a clean and strong credit history. However, some specialist lenders are willing to consider applicants who have had financial issues, provided they can show stability and affordability now.
You may be classed as having adverse credit if you have experienced any of the following:
Missed or late payments on loans or credit cards
Defaults or arrears on previous credit accounts
Pauzible
County Court Judgments (CCJs)
Individual Voluntary Arrangements (IVAs)
Bankruptcy
Debt management plans
Repossession of a previous property
Each of these issues affects your credit rating differently. Lenders consider how recent the problems are and whether you have taken steps to improve your financial situation since.
How to Improve Your Chances
The ability to get a mortgage with bad credit depends on several factors. The main items lenders will be seeking to look at are the severity of your past issues, how long ago they occurred and your current financial health.
Specialist lenders assess each case individually rather than rejecting applicants based solely on their credit score. They consider the full picture, including your income, expenses, deposit and how responsibly you have managed your finances recently.
Factors that improve your chances include:
The problem happened more than two or three years ago
You have maintained steady employment and income
You have managed your debts responsibly since the issue
You can provide a larger deposit
It is also worth noting that not all credit problems are treated the same. For example, a single missed payment two years ago may have little effect, while a recent bankruptcy will limit your options significantly.
Types of Mortgage for Bad Credit
There are several types of mortgage available to people with poor credit. These vary depending on your situation and what the lender is willing to offer.
Common types of Adverse Credit Mortgage:
Guarantor mortgage: A family member or friend agrees to cover payments, helping reassure the lender. The guarantor usually offers their savings or property as security. This reduces the lender’s risk and allows them to provide better terms, even if your credit history is poor.
Joint mortgage: You apply with another person to combine incomes and strengthen your application. This product is popular with couples or family members. Some specialist lenders even allow joint borrower, sole proprietor arrangements, meaning a parent can help a child get a mortgage without co-owning the property.
Shared ownership mortgage: Shared ownership allows you to buy a portion of a property, often between 25 and 75 per cent and pay rent on the rest. Some housing associations and specialist lenders offer shared ownership deals to those with bad credit, especially if the issues are historic and affordability is strong.
Remortgages: Some specialist lenders offer remortgage products for people with bad credit who already own a home but want to refinance. This could be to release equity, lower monthly payments or switch from an old deal that has become expensive.
Buy-to-Let Mortgages: If you are an investor or landlord with bad credit, you can still find buy-to-let mortgages through specialist lenders. These loans are based more on the property’s rental income than on your personal credit record. However, you may need a larger deposit, frequently 25 per cent or more. Some lenders may also require evidence of successful property management or stable income from another source.
How a Bad Credit History Affects Your Mortgage Options
When lenders check your credit report, they look for patterns of financial behaviour. A few minor issues from a years ago might not cause significant concern, but repeated or serious defaults could reduce your chances.
Lenders usually consider:
The type of adverse credit (missed payment, default, CCJ or bankruptcy)
The date the problem occurred
The total amount of debt involved
Whether the issue has been settled
Your current debt-to-income ratio
If your problems are recent or severe, your mortgage choices may be limited to a smaller number of specialist lenders. In such cases, the deposit requirement and interest rate are likely to be higher than usual.
How Much Deposit Do You Need for a Bad Credit Mortgage
A deposit is one of the most important parts of any mortgage application. With bad credit, you will generally need a higher deposit than someone with a clean history.
Typical deposit ranges include:
Around 5 to 10 per cent if your credit issues were minor and occurred over three years ago
Around 15 to 30 per cent for more recent or serious issues
A larger deposit not only reduces the lender’s risk but also increases your chances of approval and may help you secure a better rate. Saving for a bigger deposit can take time, but it can make a big difference when you apply.
Preparing to Apply for a Bad Credit Mortgage
Preparation can make a huge difference to your success. Before you apply, it is important to show lenders that you are financially responsible and ready for a mortgage.
Steps to prepare include:
Check your credit report with Experian, Equifax or TransUnion to understand your score and correct any errors.
Clear outstanding debts where possible and make consistent payments to show improvement.
Stay within credit limits and avoid applying for too many new loans.
Build stability by maintaining regular employment and a stable address.
Save for a larger deposit to strengthen your application.
Work with a broker who specialises in bad credit mortgages to match you with suitable lenders.
Lenders value consistency. Even small actions, such as paying all your bills on time for several months, can help prove reliability.
Conclusion
Having bad credit does not mean you can never own a home. The mortgage market includes many specialist lenders who understand that financial setbacks can happen to anyone. With the proper preparation and a good mortgage broker, you can still secure a mortgage. Focus on improving your financial habits, saving for a larger deposit and keeping your finances stable.
FAQs
Q. Can I get a mortgage with bad credit?
A. Yes, many specialist lenders offer mortgages to people with bad credit. Your eligibility depends on how recent and severe your credit issues are and how stable your finances are now.
Q. Will I need a bigger deposit?
A. Usually, yes. Lenders could ask for between 15 and 30 per cent, depending on your credit history. A larger deposit shows commitment and lowers the lender’s risk.
Q. Do I have to use a broker?
A. You do not have to, but it is well worth considering, as a broker can help find lenders suited to your situation and increase your chances of approval.
Q. Can I get a mortgage after bankruptcy or a CCJ?
A. Yes, but it depends on when it happened and if it has been settled. Some lenders require a waiting period after bankruptcy before considering your application.
Q. Will the interest rate be higher?
A. In most cases, yes. However, as you make regular payments and improve your credit score, you may qualify for a lower rate by remortgaging.
About the author
Pauzible Team
Editorial Team
The Pauzible Team consists of finance professionals and property market specialists dedicated to reinventing home ownership and BTL financing. With deep expertise across UK real estate and innovative financial products like Equity Partnership Agreements, we provide landlords and homeowners with the insights they need to unlock equity, navigate market volatility, and build sustainable wealth through property. Our mission is to make complex property finance simpler, quicker, and more accessible for everyone.
mortgage with a bad creditbad credit mortgagecan you get a mortgage with bad credit
Ready to see what Pauzible could unlock?
Explore how accessing equity from your BTL property could support your business investment plans.
No obligation. Just a clear view of what might be possible.
Pauzible Asset Services (UK) Limited is registered in England and Wales with Company number 15917067. Our registered office is at 38 Lombard Street London EC3V 9BS. Pauzible is a trading name of Pauzible Asset Services (UK) Limited. Pauzible Asset Services (UK) Limited is registered with the Information Commissioner's Office with Registration reference ZC088971.
Pauzible Asset Services (UK) Limited's business falls outside the scope of financial services regulation & Pauzible Asset Services (UK) Limited is, therefore, not authorised and regulated by the Financial Conduct Authority. This means that you do not have any of the protections under the Financial Conduct Authority rules and do not have any cover from the Financial Ombudsman Scheme or the Financial Services Compensation Scheme in relation to any contract that you may have with Pauzible Asset Services (UK) Limited. Customers should ensure they understand what this means before they use the Pauzible product.
Telephone calls may be recorded for quality assurance, training, and monitoring purposes.
