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Mortgage Interest Rates with Bad Credit

Mortgage Interest Rates with Bad Credit

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Many mortgage lenders will offer higher interest rates for applicants with bad credit - but you don't have to settle for uncompetitive costs.

While the number of specialist mortgage lenders who will approve applications from homebuyers with bad credit is lower, you can still achieve great interest rates by using a broker such as Revolution Finance.

Here we look at typical mortgage interest rates, how bad credit scores impact your mortgage application, and what you can do to make your application more attractive.

If you have experienced bad credit issues, or have been declined a mortgage in the past, give Revolution Brokers a call on 0330 304 3040 or drop us an email at

As an independent broker, we work with a network of specialist lenders and negotiate the ideal mortgage terms on your behalf.

Is It Possible to Get a Good Mortgage Interest Rate with Poor Credit?

Every mortgage lender offers different rates, and these can change very quickly.

The best way to get a great interest rate is to understand the criteria of the lender you're looking to apply to - including both their eligibility and affordability requirements.

Once you are assured that you meet the requirements, you can apply for a mortgage in confidence and be in a strong position to negotiate better terms.

Revolution Brokers work with thousands of clients who have a low credit score or adverse credit history. We analyse your circumstances, recommend the lenders we know will be happy to lend to you and submit your application documents to meet all the criteria.

How Many Mortgage Lenders Offer Bad Credit Lending?

Over the past few years, the market for lending to low credit score applicants, or those with bad credit, has increased dramatically. This means there is now a much better chance of securing a low-interest rate than ever before.

There are also specific products for low credit score borrowers, designed to be lower-risk and affordable.

Some of the most significant changes to bad credit mortgage interest are:

  • Applicants with any number of CCJs can now secure a higher loan to value (LTV) ratio.
  • Those with a discharged bankruptcy also have a wider choice of higher LTV lending.
  • Homebuyers with minor credit issues can usually secure interest rates comparable with those available on the high street.

Which are the Best Lenders for Bad Credit Mortgages?

The best lender for you depends on your circumstances, borrowing requirements, and the property you wish to purchase.

Every lender has different criteria, and the terms you might be offered will change significantly depending on whether you have some minor credit score issues, a clean credit rating, or multiple problems on your credit file.

Lenders don't just consider credit scores, but also look at:

  • Earnings - how much you earn, whether you are a PAYE salaried employee or self-employed. Specialist lenders will also consider non-regular income such as dividends, commission, benefits and bonuses.
  • Age - some lenders are happy to lend to borrowers of any age, whereas others have a maximum age of 75 and others of 85. Niche lenders are happy to lend to applicants of any age provided they can demonstrate affordability.
  • Property - standard properties are always easiest to borrow against. Non-standard houses, such as those with a thatched roof, or a timber frame, are best mortgaged through a specialist lender.
  • Deposit - the higher the deposit, the more lenders you can apply to. Bad credit lenders will usually require a higher deposit than mainstream lenders.

How Can I Get a Low-Cost Mortgage With a Bad Credit Score?

The best way to get a cheap mortgage is to work with a whole-of-market broker such as Revolution Finance.

We work closely with lenders to have an in-depth understanding of which applicants they will lend to, and what other criteria apply.

If you can meet all of, or most of, those criteria, you have a much better chance of a successful outcome.

Contact the Revolution team today, and we will get the ball rolling to secure the mortgage lending you need at the lowest rates.

What Deposit Do I Need for a Mortgage with a Low Credit Score?

Typically, the larger your deposit, the better the interest rates you will be offered. A lower LTV ratio means that the lending is lower risk, and therefore a lender can extend an offer of a lower rate.

LTV means the size of the borrowing as a proportion of the value of the property.

So, for example, if you want to purchase a property costing £100,000 and have a £25,000 deposit, you are looking for a mortgage with a 75% LTV ratio.

Average LTVs tend to be around:

  • 95% as a maximum for a residential mortgage.
  • 85% as a maximum for a buy-to-let mortgage.
  • Sometimes the maximum LTV is higher for a bad credit mortgage.

Generally, your deposit requirements will be:

  • 5-10% with minor credit rating issues, particularly if they are small, happened around 2-3 years ago, and you meet all other criteria.
  • 15% or above for more serious credit score issues, such as lots of defaults, CCJs, or credit which is significantly in arrears. Sometimes if these issues occurred several years ago, they will have less of an impact.

By offering the maximum deposit you can offer, the lower the risk to the lender, and usually the better the interest rates you will be provided.

How Do Different Credit Issues Impact My Bad Credit Mortgage Interest Rates?

Lenders consider some types of credit problems more severe than others. Below are the most common low credit score problems, listed from the least serious to the more severe.

  1. Having no credit history at all - never having used any borrowing
  2. Low credit score
  3. Late payments on your credit file
  4. Mortgage arrears against past borrowing
  5. Defaults or CCJs
  6. Debt management plans
  7. IVAs, bankruptcy or property repossessions

Should you have a more serious adverse credit history, you can still achieve mortgage lending.

Revolution Brokers work with a broad network of specialist mortgage lenders who are used to lending to applicants with low credit scores or bad credit history.

Give us a call on 0330 304 3040, and we will be happy to walk you through the best options.

Is There a Limit on How Many Credit Issues You Can Have to Get a Mortgage?

This depends on what sort of issues you have experienced, and how long ago they were.

It is undoubtedly easier to secure mortgage lending if you have few bad credit marks than if your credit file shows multiple adverse credit issues.

Usually, the more poor credit history you have, the larger a deposit you will be asked to put down, or the higher the interest rates offered to offset the risk.

When Applying for a Mortgage, Does the Type of Bad Credit History I Have Make a Difference?

It does, yes - credit reports look at the history of all borrowing over the last few years. The circumstances of these bad credit ratings will be considered, for example:

  • Multiple credit issues that happened at the same time but have since been resolved indicate a one-off event.
  • If you had a clean credit score beforehand, and have kept up to date since, this demonstrates an ability and commitment to avoid such issues recurring.
  • Where there are extenuating circumstances that caused the credit issues, these should be explained, as an underwriter may be able to consider that.

How Does the Time Elapsed Since My Adverse Credit History Impact My Mortgage Application?

The length of time since adverse credit history reports on your credit score makes a significant difference when applying for a mortgage.

In some cases, if a bad credit issue occurred more than six years ago, it will be outside of the scope of the credit report and won't be considered at all.

Many high-street lenders will automatically reject any applicant with a history of bankruptcy. In contrast, others will set a minimum time that has passed to be able to consider the application - in some cases, this is three years, and in others as little as one year.

Can I Apply for a Mortgage with Ongoing Credit Issues?

You can, although the interest rates offered would depend on any outstanding credit issues that have yet to be resolved.

Revolution Brokers work with lenders who will consider lending to applicants with bad credit, but only when outstanding issues have been settled. If there is a relatively short period still outstanding, it is preferable to wait until old accounts have been cleared to apply for a new bad credit mortgage.

Ongoing issues will also impact the value you can borrow since the repayments will affect the affordability assessment.

For example, if you have defaulted on your credit file against accounts to the value of £10,000, this will be deducted from your income to arrive at disposable income in the same way as if you have a £10,000 credit card loan outstanding.

We work with niche lenders who are less concerned with whether credit issues remain ongoing, than in when the debt was initially registered. If, since the problem began, you can demonstrate having kept up with repayments, then the adverse credit history may be disregarded in the offer made.

Bankruptcy and repossessions are perhaps the most serious of adverse credit issues since these will usually be considered dependent on the discharge date.

Many lenders will require any outstanding debts to be repaid before they will consider a new mortgage application.

How Will My Total Credit Profile Impact My Mortgage Interest Rates?

For applicants with adverse credit history, the best lending is always going to be through a specialist lender who is experienced in dealing with this sector.

However, applicants with an excellent credit score who have not experienced problems with their credit score may have an application rejected - this can be for any number of reasons, such as:

  • Not having any, or a sufficient, credit history if they haven't used borrowing before.
  • Having a high debt to income ratio where other borrowings or living expenses are considered too high.
  • An uncertain income through self-employment, a varied work pattern, working irregular hours or being in a new job.
  • Having moved multiple times and had several different addresses in the last few years.
  • Not being registered to vote on the Electoral Roll.

A lot also depends on the appetite for lending from the particular mortgage provider. Each has their eligibility criteria, so if you apply to the wrong lender, an application may be refused immediately that another would have been happy to consider.

For help finding the best mortgage rates whether you have a low credit score or have been rejected for a mortgage because of any of the circumstances above, contact Revolution Brokers on 0330 304 3040.

FAQs - Mortgages for Applicants with Bad Credit

Here we have answered the most commonly asked questions about getting a mortgage with bad credit, finding the right lenders, and securing the most competitive interest rates.

How Much Borrowing Can I Apply For Through a Bad Credit Mortgage?

Most lenders will assess your borrowing application based on your income.

This changes depending on the lender; some will calculate 4.5 x your income, others 5 x your earnings, and some even as high as 6 x your salary.

However, if you have a bad credit history, the lender may work on one of the lower-income multiples and not be willing to consider a higher rate of lending.

Other criteria will make a difference in how much you can borrow, such as:

  • The deposit value
  • What sort of property you wish to purchase
  • How old you are
  • Your employment streams
Can I Use an Adverse Credit Mortgage Calculator?

A mortgage calculator is an indicative tool that gives you a rough idea of how much you can borrow, or how much your repayments would be, based on different amounts of borrowing and different mortgage terms.

Adverse credit mortgage calculators can be useful, but given the significant differences between lenders, and the reliance on an analysis of your personal circumstances to make an offer, it is advisable to contact Revolution Brokers to get a clearer idea about your borrowing options.

Online calculators are handy tools, but should not be relied upon to make decisions about making mortgage applications.

Will there be a Hard Credit Check on My Credit File to Get an Indicative Quote?

Not necessarily - using an online calculator won't mean having a hard credit check on your credit history that will be visible to other lenders.

Usually, initial enquiries only require a soft search, which is visible only to a person looking at their own credit report.

How Much Does My Credit Score Impact My Mortgage Rates?

A credit score is always a factor when mortgage lenders decide what rate to offer at, but other factors are often just as important.

Some lenders who are experienced in lending to applicants with a bad credit history aren't necessarily interested in your score, per se, but want to know that you have kept up to date with your obligations over the recent months or years.

If you have a low credit score or adverse credit history and are seeking mortgage lending, the fastest and most successful route is to work with a specialist broker such as Revolution Finance.

How High Does My Credit Score Have to Be to Get a Good Mortgage Rate?

Remember that each lender has their own criteria, so a credit score considered 'good' by one, might only be considered 'fair' by another.

Likewise, each credit-referencing agency uses a different scoring system; some range between 0-100 and others between 0-1,000, so there isn't a universal benchmark credit score to aim for.

Most lenders will use one of the big credit bureaus such as TransUnion, Equifax, Experian or Crediva. For an example of the variances between the scores produced:

  • Experian scores credit out of 999, and 'good' means 700 or above, with 800 and over considered 'excellent'.
  • Equifax scores credit out of 700, with 475 and over 'excellent'.
  • TransUnion (previously CallCredit) uses a scoring system out of 710, but then assigns a rating of between one and five. One is the lowest credit score and five means 'outstanding'.

Even though these scoring systems vary, some mortgage providers do not consider credit scores an essential part of the application assessment.

Some lenders use one or two preferred credit agencies to run a check, but disregard the score in favour of considering your payment history and recent activity.

What Interest Rate Can I Expect on a Bad Credit Mortgage?

As with credit scores, the interest rates offered will be different between lenders. Each will look at their individual criteria, and decide how important a bad credit history is to what rates they can offer.

To secure the best bad credit mortgage interest rates, it is crucial to work with a specialist broker.

Is There an Average Interest Rate for Bad Credit Mortgages?

No, not really; because mortgage rates change frequently and rarely stay static between applications. In the same way, lender criteria change regularly, and the terms under which they will lend to bad credit applicants can change quickly.

The most crucial factor is to work with a broker who understands your credit history and can shortlist niche lenders who they know will consider your application and be prepared to negotiate competitive rates.

Can Bad Credit Applicants Get a Fixed Rate Mortgage?

You can, yes - just like any applicant, you can decide on a tracker rate or fixed-rate mortgage.

Many lenders will be more likely to offer a fixed-rate mortgage since they know that this is easier to budget for and you are more likely to be able to keep up with the repayments.

Can Bad Credit Mortgage Applicants Apply for a 30-Year Term?

Again, this all depends on the lender. Given how much terms and rates vary, it isn't possible to give a fixed idea about what sort of terms will be available.

Longer mortgage terms though, in general, are easier to secure.

Applicants looking for a 25-30 year mortgage have a smaller regular payment, making the affordability criteria easier to meet.

Is It Possible to Get a Good Remortgage Rate with a Bad Credit History?

You can, yes - remortgaging will be assessed in a similar way to a new mortgage application in terms of affordability and risk.

However, if your remortgage is for a smaller value of the property - i.e. a lower LTV, you will be able to secure better interest rates than for a higher LTV ratio.

Why Do I Need a Broker to Get a Bad Credit Mortgage?

The complexities of having a bad credit history and applying for a mortgage mean that using an independent broker is the most likely way to secure the lending you need at competitive rates.

Many bad credit lenders work primarily with specialist brokers in the market. They do not consider direct applications - Revolution Brokers work with several outstanding bad credit lenders who take a flexible approach to assess each new application on a case-by-case basis.

Applying to lenders who will not be able to consider your application can indeed make the situation worse, by applying more hard credit checks to your credit file, and making it more challenging to find the borrowing you need.

Revolution Brokers work as your advocate and explain your circumstances, support your application request, and negotiate terms with our recommended lender on your behalf.

Professional Mortgage Support with Bad Credit

If you have a bad credit rating, a low credit score, or have been rejected for mortgage financing, get in touch with Revolution Brokers right away on 0330 304 3040 or drop us a message at

As a whole-of-market broker specialising in the bad credit sector, we can quickly direct you to the optimal lenders to apply to, and support your mortgage application every step of the way.

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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