If your credit has taken a knock since you took out your mortgage, you may worry that remortgaging is off the table. The good news is that it is often still possible. This guide explains whether you can remortgage with bad credit, how it affects your options, and how to give yourself the best chance.
Yes, it is often possible
You can often remortgage with bad credit, though your choice of deals may be narrower and the rates higher than for someone with a clean record. Lenders vary in how they treat credit problems, and some specialise in helping borrowers with adverse credit. So while bad credit makes remortgaging harder, it does not necessarily make it impossible, especially with the right lender and approach.
How bad credit affects remortgaging
Bad credit, such as missed payments, defaults or county court judgments, can affect remortgaging by limiting which lenders will consider you and what rates you are offered. Recent or serious problems weigh more heavily than older, minor ones. Lenders assess your credit history alongside your income and the equity in your home, so a strong position on those fronts can help offset credit concerns, as our guide to credit and your mortgage explains.
Specialist and adverse-credit lenders
Some lenders specialise in mortgages for people with adverse credit, considering cases that mainstream lenders might decline. Their rates are usually higher to reflect the added risk, but they can offer a route to remortgaging when high-street lenders will not. A broker who knows this part of the market can be especially valuable in finding a lender likely to accept your particular circumstances, as our guide to remortgaging notes.
Staying with your current lender
If remortgaging to a new lender is difficult because of your credit, a product transfer with your current lender may be easier, since it often involves lighter checks than a full application, as our guide to product transfer or remortgage explains. Staying put on a new deal can keep you off the standard variable rate even if your credit would make switching lenders hard, which is a useful fallback.
Improving your credit first
If your remortgage is not urgent, improving your credit before applying can widen your options and improve the rates available. Paying bills and credit on time, reducing debts, correcting errors on your file, and letting older problems age all help. Even a few months of good habits can make a difference. Where possible, strengthening your credit before remortgaging puts you in a better position than applying while it is at its weakest.
The role of your equity
The equity in your home can help when remortgaging with bad credit, because a lower loan-to-value reduces the lender's risk. If you have built up substantial equity, through paying down the mortgage or a rise in value, more lenders may consider you, and at better rates, as our guide to how a higher home value lowers your LTV explains. Strong equity can partly offset credit concerns.
Get advice from a broker
With bad credit, advice from a mortgage broker is particularly worthwhile. Brokers know which lenders are likely to accept particular credit issues and can match you to one, saving you from applications that might be declined and leave further marks on your file. Given the narrower options and higher stakes, professional help can make the difference between a successful remortgage and a frustrating series of rejections, as our guide to how long a remortgage takes notes.
Types of credit problem
Bad credit covers a range of issues, from a few missed payments to defaults, county court judgments, or more serious events like bankruptcy or an individual voluntary arrangement. Lenders treat these differently, with minor, older issues generally less of an obstacle than recent, serious ones. Understanding what is on your credit file, and how lenders are likely to view it, helps you and a broker target lenders most likely to accept you.
How recent the problem is matters
The age of a credit problem makes a big difference. A missed payment or default from several years ago, with a clean record since, is viewed more favourably than a recent one. Many credit issues fall off your file after six years. So if your problems are ageing and your recent history is good, your remortgage options improve over time, which can make waiting a little while worthwhile if your situation allows.
Avoiding multiple applications
With bad credit, it is especially important not to make multiple mortgage applications in quick succession, as each leaves a hard search on your file, and a cluster can concern lenders. This is where a broker helps, by matching you to a lender likely to accept you, so you apply once with a good chance, rather than repeatedly and unsuccessfully. Protecting your credit file during the process matters.
Rebuilding over time
If you can wait, rebuilding your credit before remortgaging widens your options and improves the rates available. Paying everything on time, reducing debts, staying on the electoral roll and avoiding new problems all help your file recover. Even six to twelve months of consistent good habits can strengthen your position, so where your remortgage is not urgent, investing time in your credit can pay off in a better deal.
What to prepare
To give yourself the best chance, prepare by checking your credit files, correcting any errors, gathering proof of income, and being ready to explain any past problems and how your situation has improved. Lenders and brokers value a clear, honest picture. Going into a remortgage application well prepared, with your paperwork in order and your story straight, makes a successful outcome more likely despite a difficult credit history.
The encouraging takeaway is that bad credit rarely closes the door completely. With the right lender, a possible product transfer, the help of your equity, and a broker's knowledge, a remortgage is often achievable, and improving your credit beforehand only strengthens your hand. There is usually a way forward, even if it takes a little more preparation than a standard case.
Patience and the right help
If your remortgage is not urgent, a little patience can transform your options, as credit problems age and good habits rebuild your file. Combined with the right help, a broker who knows the adverse-credit market, and the equity in your home, this often turns a difficult case into a workable one. Bad credit makes the path narrower, but with preparation, patience and advice, a successful remortgage is frequently within reach.
The door to remortgaging is rarely locked for good, and a clear-eyed plan to improve your credit, use your equity and get the right advice will usually open it wider than you might expect at the outset.
In short
You can often remortgage with bad credit, though your options may be narrower and rates higher. Specialist lenders consider adverse credit, a product transfer with your current lender may be easier, and strong equity helps. Improving your credit first widens your choices, and a broker can match you to a lender likely to accept your circumstances. Bad credit makes remortgaging harder, but with the right approach it is frequently possible.
Where to get help and next steps
Read our guides to credit and your mortgage, product transfer versus remortgage, and how long a remortgage takes. This is general information, not mortgage or financial advice.