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Mortgages After Defaults

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What’s Possible & How Lenders Assess You

Having one or more defaults on your credit file doesn’t mean you can’t get a mortgage — but it does affect lender choice, deposit requirements and the interest rates available. Many mainstream banks automatically decline applications with defaults, but specialist lenders can still consider them depending on the date, type and number of defaults.

This guide breaks down how defaults impact mortgage approval, what lenders look for, deposit requirements, how long you should wait before applying, and how to strengthen your chances.

What Is a Default?

A default is recorded when a debt has been significantly overdue — usually 3–6 months — and the lender closes the account. Defaults remain on your credit report for six years, even if paid. Lenders view defaults as an indication of past financial difficulty, but they treat them differently depending on the circumstances.

Lenders assess defaults based on:

  • Date default was registered
  • Whether it is satisfied or unsatisfied
  • Value of the default
  • Number of defaults
  • Whether other adverse exists (CCJs, arrears, payday loans, etc.)

If you also have CCJs, see: Mortgage With CCJs

Can You Get a Mortgage After Defaults?

Yes — many people secure mortgages after defaults, especially if the defaults are older or satisfied.

General approval likelihood:

  • Defaults 3+ years old: Widely accepted (many lenders)
  • Defaults 1–3 years old: Possible with a higher deposit
  • Defaults under 12 months old: Specialist lenders only

Satisfied vs Unsatisfied Defaults

Most lenders prefer satisfied (repaid) defaults, but some will still consider unsatisfied ones depending on age and value.

  • Satisfied Defaults: Better rates available, lower deposit requirements, and improved underwriting strength.
  • Unsatisfied Defaults: Fewer lenders, higher deposits (20–30%) often required, and must show improved financial stability since the default.

How Old Is the Default?

  • Defaults under 6 months old: Very limited options; high deposit required.
  • Defaults 6–12 months old: Possible with specialist lenders; pricing will be higher.
  • Defaults 12–36 months old: Many specialist lenders available; satisfied defaults viewed more favourably.
  • Defaults older than 3 years: Often accepted by mainstream lenders; deposit requirements fall closer to standard levels.

Deposit Requirements With Defaults

Typical deposits depending on credit profile:

  • Defaults 3+ years old: 10–15% deposit
  • Defaults 1–3 years old: 15–25% deposit
  • Defaults under 12 months old: 25–35% deposit

General deposit rules explained here: Mortgage Deposit Requirements.

How Many Defaults Do Lenders Allow?

This varies widely:

  • One low-value default: Often fine after 12 months.
  • Multiple small defaults: Usually still acceptable with specialist lenders.
  • Large defaults (over £2,500): Depend heavily on age.

If you also have payday loans, see: Payday Loans & Mortgages.

Affordability & Property Types

Affordability is the same as standard mortgages, but lenders will examine income stability, bank statements, and outstanding debts. Lenders also assess defaults differently depending on the source:

  • Utility/Mobile defaults: Often treated more leniently.
  • Loan/Credit card defaults: Viewed as more serious.
  • Mortgage arrears: Most serious — specialist only.

For a full affordability breakdown, see: How Much Can I Borrow?

Remortgaging With Defaults

Remortgaging with defaults is possible, but depends heavily on LTV, deposit, and how old the defaults are. Consider whether a remortgage or product transfer is more suitable. See: Product Transfer vs Remortgage and Remortgage Timeline.

How To Improve Your Chances of Approval

  • Satisfy the default (pay it off)
  • Avoid any further missed payments
  • Reduce existing unsecured debt
  • Save a larger deposit
  • Avoid new credit applications before applying
  • Fix any errors on your credit report

Next Steps

If you have one or more defaults and want to understand what lenders can offer, it’s still very possible to secure a mortgage. Lender criteria vary massively, so choosing the right lender makes a significant difference.

You can also explore related guides such as Mortgage With CCJs, Payday Loans & Mortgages, or review affordability using our mortgage calculators.

All mortgage advice is provided by FCA-regulated advisers. Your home may be repossessed if you do not keep up repayments on your mortgage.

FAQs

Can I get a mortgage with a default from last year? Yes — but you may need a higher deposit and a specialist lender.

Does satisfying a default help? Yes — it significantly improves chances of approval.

Do defaults affect interest rates? Yes, you may pay slightly higher rates depending on lender and severity.

Can a first-time buyer get a mortgage after defaults? Yes — especially if defaults are older than 12–24 months.

Do defaults disappear after 6 years? Yes — they automatically fall off your credit report after 6 years.

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