What is a poor credit mortgage?

Having poor credit doesn’t always mean a mortgage is off the table. Some lenders offer specialist deals for people in this position. So if you’ve missed a few payments, built up some debt, had a County Court Judgement (CCJ) or shared finances with someone with poor credit, don’t give up on buying a home.

Lenders all have their own way of judging bad credit, and some may look into the reasons behind it. Explaining your situation can really help, especially if you’re managing things well now. Improving your credit score where possible could also help. So could reducing outstanding debts and avoiding new credit applications before applying.

A mortgage is a big commitment, and poor credit mortgages can come with higher interest rates and fees, so lenders need to know it’s affordable for you. If payments are missed, there’s a risk of losing your home, so it’s important that you and the lender feel confident that you’re doing the right thing.

Are you eligible for a mortgage?

To be eligible for any type of mortgage you will need to meet the lender’s eligibility and affordability criteria. The rules do vary between lenders, but here’s what they’ll check:

Your income:

Lenders will look at what you earn when deciding how much to lend. Typically, you can borrow up to four and a half times your annual income, or combined annual income if applying for a joint mortgage. Some providers may offer you more, so comparing is essential.

Affordability

You'll need to demonstrate that you can comfortably afford all your mortgage payments, in addition to your other financial commitments. If you apply for a poor credit mortgage, don’t be surprised if things take a bit longer. Lenders may want a closer look at your finances to make sure you’ll be able to keep up with the repayments.

Credit history

Yes, having a solid credit score will boost your chances of being approved, but that doesn’t mean people with credit history issues are automatically ruled out. Lenders who offer mortgages to people with poor credit are prepared to look behind the credit score.

Every lender’s a bit different, so it’s very important to compare your options to find the right fit for your situation.

And of course, you must be aware that your home could be repossessed if you don’t keep up repayments on your mortgage. Do make sure you’re comfortable with what you can afford before taking the plunge.

How much can I borrow with a mortgage?

Many mortgage lenders offer up to around 4.5 times your annual earnings, though some may allow you to borrow more. Going off the typical figure, if you earn £50,000, you might be able to borrow up to £225,000. If you apply jointly with someone earning £30,000, that total could rise to £360,000.

Just bear in mind that your final offer will depend on factors like your affordability, existing borrowing and deposit size. Income’s just part of the picture. Here’s what else a lender might look at when assessing your application:

  • Monthly outgoings: Lenders will consider your regular expenses like bills, credit card payments, and childcare costs to make sure the mortgage is affordable for you both.

  • Affordability stress tests: Lenders will check if you could afford your mortgage if interest rates rise. If you’re borrowing more for things like home improvements, lenders will also want to ensure you can handle the increased payments.

  • Equity in your home: The more equity or deposit you have, the better your deal. A lower LTV ratio can help you access more competitive rates.

  • Creditworthiness: A solid credit report can really boost your chances of approval, so be sure to check it ahead of your application to see if there is anything you can do to improve your score.

What costs should I budget for when arranging a mortgage?

When applying for a mortgage, remember there are a few extra costs you’ll need to keep in mind to avoid any surprises:

  • Valuation fees: Lenders will want to know your property's value, so they'll arrange a valuation. Costs can vary, but it's wise to budget for this.​

  • Legal fees: Whether it's a solicitor or conveyancer, you'll need legal help to navigate the process.​ Legal fees for home buying are typically around £2,000 (including VAT at 20%), but the exact cost can vary depending on the property and how complex the work is.

  • Local searches: If you’re buying a property, your solicitor will also carry out local searches – usually costing £250–£300.

  • Arrangement fees: Some lenders charge a fee to set up your mortgage. Expect to pay anywhere between £1,000 to £2,000 or more. ​

  • Early repayment charges (ERCs): Planning to pay off your mortgage early? Be aware of potential ERCs, which can apply if you overpay beyond a certain limit.

  • Survey costs: If you're considering a detailed property survey, this will be an additional expense to keep in mind.​

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Answering your questions about poor credit mortgages

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Page updated on 10th October 2025, Reviewed by Richard Groom