Mortgage With Defaults

How much deposit do I need if I’ve got a default on my credit file?

A 5% deposit is a great starting point for most people. At the time of recording this in July 2025, there is actually a lender that will do this on a 3% deposit. I have no idea how long the product will be there – it could disappear tonight or still be there in 10 years’ time.

Anything above that 5% would give you a better interest rate and the choice of more lenders.

How much can I borrow if I have defaults?

Defaults don’t actually impact the amount of money you can borrow, but they might reduce the number of lenders available to you. All lenders are different in how much they will offer.

The average is between four and 4.5 times your annual income. Some lenders that accept defaults can go all the way up to six times your income, depending on how much you earn. It’s all subject to circumstance. But a default shouldn’t impact the amount of money you can borrow.

Do only certain mortgage lenders accept defaults?

The majority of high street lenders will accept defaults. However, the high street tends to have a ‘computer says no’ approach. The computer is going to make a decision just based on your score.

You may run an Agreement in Principle and that may pass because your score is satisfactory. But when it sits in front of an underwriter at the high street bank, they may not have the same appetite as a building society or a subprime lender.

Specialist lenders are more open to a default because that’s their focus. Plenty of lenders will take defaults.

What types of mortgages are available for people with defaults?

Clients might be First Time Buyers, people that are already homeowners looking to remortgage or homeowners looking to move house. We’ve then got investors looking for Buy to Let, who might buy properties in their personal name, or under a limited company.

All these people can still access mortgages if they’ve got defaults. We will just need to understand why the default is there – and lenders will ask those questions as well.

How can I improve my chances of getting a mortgage with a default?

Once the default’s there, there’s not a great deal you can do, other than avoid getting any more. If you’ve got an account that’s about to default, it can be a good idea to ring the provider and have a chat with them. You might be able to come to an agreement before it defaults.

Once you’ve already got defaults and you don’t know where to start, give us a call. We’ll look through your credit report and advise accordingly. I’ll let you know whether we can help you now or if you need to come back in a couple of months.

Where people need to come back in a few months, the most common reason is that they have a small deposit and an overdraft. When an underwriter looks at that case, it looks quite risky. It can look better if it’s packaged with bank accounts with no overdraft or a very small one.

On the run-up to a mortgage application, don’t apply for new credit facilities. And go with the right mortgage broker from the start, because there’s the risk of multiple applications leaving a footprint on your credit file.

Most lenders do a soft credit search when you run a Decision in Principle, but if you go to a broker that isn’t experienced or familiar with bad credit, some applications run a hard search and leave a footprint.

You need to avoid failed applications, because it doesn’t look great if you’ve been declined multiple times. That being said, I would rather you be honest. If you have been somewhere else and stumbled across this, tell us. Share where you went and any feedback you got from the lenders or the broker. We’ll tailor something that’s going to work for you.

What else do we need to know about mortgages with a default?

I think we’ve covered it. On our website, there’s lots of content around bad credit, defaults and CCJs. There can be a crossover of information across all these different things, so if you’ve read these and you’re still scratching your head, just pick up the phone.

I would much rather have a chat with you and answer any questions or settle any anxieties than you just spiraling off into the abyss. Often things are quite simple when it’s laid out in front of you. People can overthink this, so just get in touch.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.