Bad Credit Mortgage Lenders

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Credit scoring is part and parcel of applying for a mortgage. Still, millions of applicants are anxious about whether previous credit issues or late payments will leave them stuck, unable to find a competitive borrowing option.

The reality is that every mortgage lender differs, and what you perceive as a terrible credit score may not be such a big issue, particularly if the other aspects of your application, such as deposit and affordability, are low risk.

However, several reputable mortgage lenders specialise in bad credit lending and can offer solutions for people who wish to buy their own homes but have been turned down by mainstream banks.

This Think Plutus guide works through what a bad credit mortgage lender is, what they offer, and all of the essentials you should know before you make any decisions.

What Are Bad Credit Mortgage Lenders?

As a basic overview, any mortgage provider with flexible terms around credit scoring or credit report history is a bad credit lender. Some specialise in mortgages for applicants with adverse credit, and others offer standard mortgage products to those who may not be eligible elsewhere.

Bad credit lenders are sometimes considered risky or less trustworthy than well-known banks, but this is a misconception.

Some applicants assume that a bad credit mortgage lender falls into the same category as an unethical payday loan company or lenders that target people with little realistic prospect of keeping up with exorbitant interest rates.

In contrast, a regulated mortgage provider can be a lifeline and provide structured, competitive mortgages with options to rebuild your credit score as you go.

Think Plutus can always advise if you feel that a bad credit mortgage is your best option and recommend suitable lenders with customised mortgage products.

Which Are the Best UK Mortgage Lenders for Applicants With a Bad Credit Score?

It is important to remember that no one mortgage lender will be right for every applicant. The lender we suggest is based on a thorough analysis of your borrowing requirements, circumstances and planned property purchase.

The below lenders are all established mortgage providers who lend to applicants with low credit scores or adverse credit histories, and the lender criteria snapshot overview is for information only and was correct at the time of writing. It is crucial you seek independent mortgage advice before selecting a lender or submitting an application. 


Aldermore is a well-known mortgage lender and offers fixed-rate mortgage products with competitive rates and flexible application criteria. Current fixed rate mortgage products run for two or five years, designed to ensure borrowers know what their monthly repayment will be.

You may apply for a mortgage with Aldermore if:

  • You are on a Debt Management Plan (DMP), or have had an IVA, Debt Relief Order (DRO), or bankruptcy provided it was discharged at least six years ago.
  • You have had up to two missed loan payments within the last two years, but none in the previous three months.
  • You have had a CCJ as long as it was recorded at least three years ago, and you have not had an active CCJ in the last three years worth over £500.

One default between 13 and 36 months is disregarded, provided the value was under £500 and the debt has since been settled. Any default on your credit record from over three years ago is acceptable.

Note that Aldermore does offer more adverse products, however they do not lend directly to the public and only offers mortgage products through its network of brokers.

Bluestone Mortgages

Bluestone Mortgages specialises in bad credit mortgages and uses a tailored approach to assess each application – it does not use credit scoring and will not reject an applicant purely based on their score.

Instead, the lender provides a range of bad credit mortgages and will consider applicants with:

  • Unsatisfied CCJs and defaults
  • IVAs, DMPs or past bankruptcies
  • Debt consolidation plans

The mortgage provider offers bad credit lending to first-time buyers, remortgage applicants and those using Help to Buy and is gaining market share as one of the top lenders who can support applicants who have been unable to find a mortgage elsewhere.

Buckingham Building Society

This lender is another bad credit specialist and structures mortgages for applicants with past financial difficulties – they can discuss individual cases and circumstances to try and find an affordable solution.

Buckingham Building Society has a range of mortgage products designed specifically for non-standard credit or impaired credit applicants, so several options exist.

As some of the example terms and mortgage conditions available, Buckingham Building Society offers:

  • Discounted variable interest rates for three years.
  • Maximum Loan to Values of up to 80%.
  • Zero application fees (product dependent).
  • Tiered early redemption charges up to three years.
  • Options to add product fees to the loan.

Applicants interested in a Buckingham Building Society mortgage must work with an independent broker, as this is another bad credit lender that does not deal with direct applications.

Darlington Building Society

Darlington Building Society has a range of Adaptable Solutions mortgages designed to help applicants in England, Scotland or Wales who want to take out a mortgage but have credit issues.

It works on three levels, with different products and terms available depending on your circumstances:

  • Level 1 products are non-standard and suited to applicants with minor credit problems.
  • Level 2 products are called credit repair mortgages for borrowers who need additional support to restore a healthy credit score.
  • Level 3 products are for applicants with more complex credit challenges who require extra assistance finding a mortgage.

Terms and interest rates vary, but as an example, Darlington Building Society offers a non-standard mortgage for level one applicants with up to 80% LTV.

Level 3 applicants can borrow up to 60% LTV on mortgages capped at £350,000, even if they have had an IVA or a bankruptcy in the last three years.

Foundation Home Loans

Foundation Home Loans provides residential mortgage products split into four tiers, F1, F2, F3 and F4 – they are happy to consider applicants with blips on their credit record but only deal with professional brokers.

The mortgage provider will not lend to applicants with a repossession on their credit file but provide F4 mortgages to applicants with:

  • Up to one current short-term credit account, provided it is up to date.
  • Bankruptcies, IVAs or DROs that were satisfied three years ago or more.
  • Up to two unsatisfied CCJs if they are six months old or more, up to £3,000.

However, like many bad credit specialists mentioned here, Foundation Home Loans will not reject an applicant out of hand – they consider a range of circumstances and assess each new application case by case.

This lender also has flexible criteria. For example, they will consider unusual income sources and include retained profits for business owners, making a mortgage far more achievable for those with non-standard incomes.

Like several bad credit lenders, Foundation Home Loans only structures mortgages through its network of approved brokers.

Kensington Mortgages

Kensington Mortgages provides specialist lending for numerous complex situations and liaises only with brokers – the lender has an experienced underwriting team and tailors each offer to the applicant’s requirements and circumstances.

In 2020 the mortgage provider was named Best Specialist Lender at the What Mortgage Awards and will consider applicants with:

  • Complicated or unusual incomes
  • Low credit score or adverse credit issues
  • Right to Buy or Help to Buy support

This lender calls their bad credit mortgages Failed Credit Score mortgages. They can lend if you have very little credit history, an active DMP, defaults, historic CCJs or missed payments relating to unsecured payments.

Kensington Mortgages is also open to lending to applicants with an adverse credit history due to a life event, including redundancy, ill health or divorce.

Mansfield Building Society

Mansfield Building Society provides a large range of mortgages, including Shared Ownership, holiday let and buy-to-let products – and can structure lending products for most circumstances.

They have specific mortgages for applicants using family financial assistance or a guarantor and those buying a proportion of their home through Shared Ownership or looking for an interest-only mortgage agreement.

The lender will consider residential mortgage applicants with bankruptcies, IVAs and DROs within the last three to six years and have a Versatility product range.

Applicants in the Versatility Four band can apply if they:

  • Have an unsatisfied DMP that has been paid on time for the last 24 months.
  • Have used payday loans, but not in the last three months.
  • Have an unsatisfied CCJ up to £500 in the previous 36 months.

LTVs are available up to 80%, and potentially more, if the applicant has not exceeded their overdraft limit by more than 10%, or £75 – whichever is higher. Mansfield is another lender who only provides mortgage offers through broker intermediaries.

MBS Lending

MBS Lending is a specialist mortgage provider that will consider applicants with poor credit records for various reasons. It only deals with professional brokers and can lend to borrowers who have:

  • Missed payments
  • CCJs, bankruptcies and repossessions
  • DMPs with at least six months of satisfactory payments
  • Gifted deposits

The lender runs through a full affordability assessment before making any decisions, so it is more focused on how well they believe the applicant will be able to keep up with their repayments rather than previous issues in their credit report.

MBS Lending will also consider the circumstances related to previous credit issues rather than applying a blanket policy.

For example, a mainstream bank will usually automatically reject your application if you have used a payday loan. Rather, MBS will ask for an explanation and disregard the issue if there is a practical reason.

Pepper Money

Pepper Money provides several mortgages designed for bad credit applicants and says that it offers lending for applicants in ‘interesting situations’.

Again, Pepper Money only deals with authorised professional brokers but will consider applicants with several credit issues or low credit score challenges, provided they believe the borrower can afford the mortgage repayments.

Applicants may apply to Pepper Money with unsatisfied CCJs and defaults and unsecured credit accounts – the level of credit issues determines the product tier you qualify for. Still, the lender will not assign a level (and the related terms and interest rates) based on other unsecured borrowings.

This bad credit mortgage provider offers up to 85% LTV on residential mortgages, will include income in an affordability assessment up to age 75 and can structure interest-only mortgages for LTVs up to 60% without any changes to the criteria.

The Mortgage Lender (TML)

As you may now expect, The Mortgage Lender (TML) only provides mortgages through professional brokers and does not accept direct applications – it will consider applicants with adverse credit and a range of other circumstances.

TML does not use credit scoring to decide which interest rates to charge, although it does have a specialist product which works slightly differently.

Like several bad credit mortgage specialists covered here, TML uses a tiered product range and can accept applicants with payday loans, usually provided the loan has been satisfied before the transaction completes.

Applicants can apply with:

  • A clean credit history since discharging a bankruptcy or IVA.
  • An active DMP, as long as the payments are up to date.
  • CCJs & Defaults

Mortgages are available up to age 80 at the end of the term and with LTVs of up to 80%, even with adverse credit issues.

The Real Life 0 product is designed for applicants with complex incomes or a variable self-employed income. It has more flexible criteria to cater to borrowers that do not meet the standard qualification policies with other lenders.

United Trust Bank

United Trust Bank only works with registered intermediaries and brokers. It can structure mortgages as a debt consolidation exercise to repay other debts and combine all the outstanding payments into one monthly outgoing.

This lender will not disregard any applicant because of credit issues or unusual circumstances and assesses every application individually, including self-employed borrowers, contractors and those drawing a pension.

There is no minimum credit score, and you can apply for a United Trust Bank mortgage with:

  • Up to two CCJs or defaults in the last year, without any maximum number older than 12 months, provided the value is under £15,000.
  • Up to two secured loan or mortgage arrears in the last year, with a maximum of two outstanding.
  • Other unsecured debts are ignored if consolidated into the new mortgage.

Applicants can use a gifted deposit or pay the down payment using equity from an existing property if they are remortgaging or refinancing.

Vida Homeloans

Our final bad credit mortgage lender is Vida Homeloans, offering a range of residential mortgage products with flexible lending criteria.

A full catalogue of Credit Repair mortgages is designed for complex incomes, low credit scores, and contractors without an established trading history.

LTVs are available up to 85%, or 80%, on interest-only mortgages, with a minimum five-year term and the option to consolidate debts to the same Loan to Value.

Vida Homeloans mortgages include products suitable for applicants with:

  • DMPs, DROs discharged at least six years ago, and CCJs provided they were registered more than six months ago. Unsatisfied CCJs are accepted for up to £5,000.
  • Defaults if they are over six months old.
  • Bankruptcies that were discharged more than six years ago, with supporting information about the circumstances.

There are five product tiers for residential mortgages, depending on the severity and date of the adverse credit issues, and each application is assessed separately.

Choosing a Bad Credit Mortgage Lender

As you can see from our guide above, numerous respected and regulated mortgage lenders offer mortgage products suitable for applicants with adverse credit, whether they have serious issues with their credit report or have a very low credit score.

The vast majority of bad credit specialists do not accept direct applications, so working with a whole-of-market broker to assess your circumstances, recommend the right lender for you, and negotiate on your behalf is essential.

Assuming you cannot get a mortgage due to bad credit is often incorrect. Lenders can consider almost any scenario, with varying policies relating to bankruptcies, CCJs, DMOs and IVAs.

For more information about any of the lenders we have mentioned here, or for help getting your application off the ground, please contact Think Plutus at any time.

We appreciate that bad credit can arise through any number of situations and will always provide friendly, professional advice to help you get your finances back on track.

Speak to a mortgage adviser today

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