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    Can You Remortgage with Bad Credit in the UK?

    Bad credit doesn't lock you out of remortgaging — it just changes which lenders you can approach. A clear understanding of how UK specialist lenders price adverse credit, and which products fit your specific profile, makes the difference between a remortgage that saves you money and a remortgage that costs more than it should.

    First Run Now Editorial Updated 15 June 2026 7 min read

    What changes when you have bad credit

    A clean-credit remortgage is essentially a shop-around exercise: compare rates, pick a deal, swap lenders. With adverse credit, two things change. First, the universe of lenders shrinks — high-street names typically auto-decline anything with recent unsatisfied defaults or missed mortgage payments, regardless of how strong the rest of the application is. Second, the price and LTV are calibrated to the severity of the adverse, so getting the application in front of the right specialist lender first time matters far more than it does on a clean-credit case.

    How UK lenders categorise adverse credit

    There is no single industry-wide scale, but most specialist lenders work with roughly the same severity bands. Understanding which band you fall into is the starting point for any realistic remortgage conversation:

    • Near-prime / light adverse — satisfied CCJs over 12 months old, isolated late payments more than 24 months ago, perfect mortgage conduct. Often priced within 0.5–1% of prime.
    • Moderate adverse — unsatisfied defaults under 12 months, missed unsecured payments in the last 12–24 months, perfect or near-perfect mortgage conduct. Priced 1.5–2.5% above prime.
    • Heavy adverse — discharged bankruptcy, IVA in the last 24 months, multiple recent CCJs, missed mortgage payments in the last 12 months. Priced 2.5–4% above prime, with tighter LTV.

    Which UK lenders remortgage bad credit borrowers

    The specialist mortgage market is small but capable. The names that remortgage adverse-credit borrowers on a regular basis include Pepper Money, Kensington Mortgages, Vida Homeloans, Bluestone Mortgages, Together, Precise Mortgages, MBS Lending, Buckinghamshire Building Society, Kent Reliance and the Mortgage Lender (TML). Most are intermediary-only, which is why working with a broker who is familiar with specialist criteria is far more productive than approaching lenders direct.

    Rates and LTVs by severity

    At the time of writing, indicative remortgage pricing looks like this:

    • Near-prime: up to 85% LTV, 5-year fix from around 5.5–6.0%.
    • Moderate adverse: up to 75–80% LTV, 5-year fix from around 6.5–7.5%.
    • Heavy adverse: up to 65–70% LTV, 5-year fix from around 8.0–9.5%.

    2-year products typically sit 0.30–0.60% above the 5-year equivalents on specialist lending — the opposite of the prime market, because specialist lenders prefer the longer commitment. Arrangement fees range from £995 to 2% of the loan.

    When timing matters

    The recency of adverse credit drives pricing more than the absolute count of items on file. A single default from 30 months ago looks materially better to an underwriter than three defaults from the last 6 months. That gives borrowers a real lever: if you're approaching the end of a fixed rate and have an adverse-credit item that's about to age past a key threshold (12, 24 or 36 months), waiting a few weeks for it to cross the line can move you into a cheaper severity band.

    The trade-off is the SVR cost in the meantime. If your reversion rate is materially above the specialist rate you can already access, the savings from acting now usually outweigh the saving from waiting for the adverse to age.

    Product transfer vs full remortgage

    Product transfer (with your existing lender)

    Your existing lender offers you a new rate without re-underwriting the case from scratch. No new affordability check, no credit search, no legal work. This is often the path of least resistance when your credit profile has deteriorated since the original application — the lender already has the mortgage, and offering you a new rate keeps it on book.

    Full remortgage (to a new lender)

    A new lender, a fresh affordability assessment and a full credit check. Usually delivers a better rate or higher loan size than a product transfer when your circumstances allow it, but the new lender has to be willing to accept the adverse credit at the point of application.

    Worked example

    Liam has a £210,000 mortgage on a £320,000 home (66% LTV). He has two satisfied defaults from 14 months ago. His current 5-year fix at 1.99% is ending; the lender's SVR is 8.34%. A high-street remortgage at 4.79% would have saved him about £700 a month, but his application is declined because of the defaults. A specialist 5-year fix at 6.39% is approved through a broker. The specialist rate still saves him £350 a month versus the SVR — roughly £4,200 a year — easily covering the £1,495 product fee and broker costs in year one.

    Pros

    • Specialist UK lenders actively compete for adverse-credit remortgages.
    • Most types of adverse — CCJs, defaults, IVA, bankruptcy — have a lender for them.
    • Even imperfect specialist rates are usually well below SVR.
    • Product transfers with your existing lender avoid re-underwriting altogether.
    • Adverse credit becomes cheaper to remortgage as it ages on your file.

    Cons

    • Rates are materially higher than clean-credit equivalents.
    • Maximum LTV is restricted, capping how much you can borrow.
    • Missed mortgage payments in the last 12 months close most lender doors.
    • Specialist lenders are intermediary-only — broker access is essential.
    • Fees on specialist products are typically higher than on prime products.

    Practical checklist before applying

    1. Pull your statutory credit report from all three UK bureaux (Experian, Equifax, TransUnion). Lenders use different bureaux — what looks clean on one can show adverse on another.
    2. Settle any unsatisfied CCJs or defaults if you can afford to — satisfied items price materially better than unsatisfied.
    3. Confirm 12+ months of perfect mortgage and rent conduct. Missed secured payments are the single biggest red flag.
    4. Get a current property valuation — your LTV calculation drives lender eligibility.
    5. Speak to a specialist broker before applying anywhere. A wrong direct application leaves a hard footprint that can harden your profile for 12 months.

    Frequently asked questions