We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.

News.

When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

22 Dec 2019

How to get a bad credit mortgage in 2020

Discover your mortgage options after a CCJ, IVA or bankruptcy

A blemish on your credit report doesn't need to lock you out of homeownership in the long term, with banks offering a range of deals for people who've had County Court Judgments (CCJs), individual voluntary arrangements (IVAs) and even bankruptcies.

Time is a great healer, and the longer you've spent remedying your credit issues, the better the chance you'll have of getting a good deal.

Here, we take a look at the mortgage options for people with adverse credit, and provide advice on the steps you can take to improve your credit file.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy


What happened to the bad credit mortgage market in 2019?

2019 has been a positive year for borrowers with a less-than-perfect credit history.

In April, Virgin Money announced it would begin accepting applications from borrowers with a history of CCJs.

August saw a growth in the number of bad credit mortgages, with MBS Lending, Vida Homeloans and Hope Capital all offering new deals.

And in November, the online mortgage broker Habito partnered with the bad credit adviser Impact Specialist Finance to offer tailored mortgage advice to applicants with bad credit.

How many bad credit mortgages are available?

It's hard to quantify the total number of bad credit mortgages on the market for a couple of reasons.

First of all, adverse credit comes in all shapes and sizes, making it difficult to draw a comparison between some deals.

And secondly, some lenders don't offer mortgages specifically targeted at people with a history of credit problems, but may offer such people their regular deals on a case-by-case basis.

So while the overall number is likely to be higher, the chart below shows how many deals are listed by comparison site Moneyfacts as being available to people with adverse credit.

As you can see, the overall number of deals has steadily increased over the past few months, before dropping off a little ahead of Christmas:

Getting a mortgage with a CCJ

County Court Judgments (CCJs) are issued when you fail to repay money you owe and the lender has exhausted all options in trying to reclaim the debt.

There are currently 1,483 deals that accept people who've had a CCJ, but rates vary massively.

To get the best ones, you'll need to have been discharged from the CCJ for at least three years, as shown in the table below.

Cheapest rates for people with CCJs

LTV (loan-to-value ratio - the proportion of the property price you want to borrow)CCJsDeal typeLenderInitial rateRevert rateFee
65%None in past three yearsTwo-year fixed-rateYorkshire BS1.27%4.25%£1,995
75%None in past three yearsTwo-year fixed-rateYorkshire BS1.29%4.25%£1,995
85%None in past three yearsTwo-year fixed-rateAccord1.65%4.25%£995

Getting a mortgage with an IVA

An individual voluntary agreement (IVA) is a contract agreed between someone in debt and their creditor in an attempt to stave off bankruptcy.

Of the 340 deals available to people who've had an IVA, the vast majority of the best rates require you to have been discharged for four years, though it is possible to get a deal three years after the IVA has been satisfied.

Cheapest rates for people with IVAs

LTVIVAsDeal typeLenderInitial rateRevert rateFee
60%Satisfied for four yearsTwo-year fixed-rateSkipton BS1.29%3.99% (rising to 4.99%)£995
75%Satisfied for four yearsTwo-year fixed-rateSkipton BS1.58%3.99% (rising to 4.99%)£995
85%Satisfied for four yearsTwo-year fixed-rateAccord1.65%4.25%£995

Getting a mortgage after bankruptcy

Being declared bankrupt is a serious form of adverse credit, so to get a mortgage after bankruptcy you'll need to have been discharged for a number of years.

There are 563 deals available to people who've previously been declared bankrupt. You'll need to have been discharged for at least three years to get a mortgage at all, but some of the best rates require as long as six years to have passed.

Cheapest rates for people declared bankrupt

LTVBankruptcyDeal typeLenderInitial rateRevert rateFee
65%Discharged for six yearsTwo-year fixed-rateYorkshire BS1.27%4.25%£1,995
75%Discharged for six yearsTwo-year fixed-rateYorkshire BS1.29%4.25%£1,995
85%Discharged for six yearsTwo-year fixed-rateAccord1.65%4.25%£995

Getting a mortgage with bad credit: five tips

  • Take some time to improve your credit: as you can see in the tables above, the longer you wait after a credit issue, the better chance you have of getting a good rate. With this in mind, take some time to rebuild your credit score. Short-term options include joining the electoral roll and having your rent payments added your credit profile, while longer-term solutions involve building up a history of paying your debts in full and on time.
  • Save a bigger deposit:you'll realistically need at least a 10% deposit to get a mortgage after a credit problem, but for the best rates you'll need more like 15-25%. Saving a bigger deposit gives lenders greater confidence to offer you a home loan.
  • Make sure you're settled:lenders place a value on security, so don't apply for a mortgage when you've just moved home or are still in the probation period of a new job.
  • Be honest about your circumstances:being honest about the problems you've faced and what you've done to remedy them will help brokers understand your situation and ensure lenders see the steps you've taken to improve your mortgageability.
  • Don't make multiple applications: applying for a mortgage will leave a mark on your credit report, and too many applications in a short time could bring your score down, undoing some of your good work.

You can get more tips in our guide on repairing your credit score.

Should you use a broker for a bad credit mortgage?

If you're serious about getting a mortgage after credit issues, it can make sense to enlist the services of a whole-of-market mortgage broker.

A broker with specialist knowledge of bad credit mortgages will be able to rule out lenders who definitely won't accept your application and find you the right deal for your specific circumstances.

Brokers have a big advantage when it comes to these specialist deals, as the majority of products simply aren't available to borrowers who apply directly.

The table below shows the percentage of bad credit mortgages available exclusively from mortgage brokers.

Direct onlyDirect or through a brokerBroker only
CCJs17%16%67%
IVAs0%28%72%
Bankruptcy31%25%44%


You can find out more about this topic by checking out our guides on bad credit mortgages: