Adverse Credit Mortgages UK: Options for First-Time Buyers and Remortgages

Last updated: 10 September 2026

An adverse credit mortgage is a home loan designed for people with a history of credit problems such as missed payments, defaults, County Court Judgements (CCJs), Individual Voluntary Arrangements (IVAs) or bankruptcy. Specialist lenders like Pepper Money, Kensington, Aldermore, Together, Bluestone and Vida specifically design products for borrowers the high street turns away. You can access these lenders through a whole-of-market mortgage broker, and in many cases a mortgage is possible even within 6 to 12 months of the credit event.

However, the critical factor is not whether you have adverse credit, but the type, severity and how recent it is. For example, a small utility default from 3 years ago is a completely different conversation to a £10,000 CCJ registered 4 months ago. Specialist lenders assess each case individually through manual underwriting rather than automated credit scoring, which means the details matter far more than a single credit score number.

This guide covers exactly what counts as adverse credit, which lenders accept each type, what deposit you need, and the specific options available for first-time buyers and remortgages with adverse credit, two situations with very different lender considerations.

What Counts as Adverse Credit?

Adverse credit is any negative marker on your credit file that indicates past difficulty managing financial commitments. Lenders use the term to cover a range of issues, from minor late payments to serious events like bankruptcy. Each issue carries different weight, and how recently it happened matters as much as the type itself.

Minor credit issues

Late or missed payments on a credit card or loan from over 12 months ago represent the mildest form of adverse credit. In many cases, mainstream lenders will still consider you. However, more recent or repeated missed payments narrow your options to specialist lenders.

Similarly, a default is registered when you have missed multiple payments and the creditor formally closes your account. Defaults stay on your credit file for 6 years, though satisfied (paid) defaults are viewed more favourably than unsatisfied ones. For more detail, see our dedicated guide to mortgages with defaults.

Moderate to serious credit issues

A County Court Judgement (CCJ) is issued when a court orders you to repay a debt. CCJs also stay on your credit file for 6 years, although they can be removed within 1 month if paid in full within that period. As a result, satisfied CCJs are treated less harshly than unsatisfied ones.

In addition, a Debt Management Plan (DMP) is an informal arrangement to repay debts at a reduced rate. Some lenders will consider you while on an active DMP, while others require it to be completed first.

More seriously, an Individual Voluntary Arrangement (IVA) is a formal agreement with creditors to repay debts over a set period. Most lenders require the IVA to be discharged before they will lend, typically with at least 12 months of clean credit since discharge.

At the most severe end, bankruptcy is the most significant form of adverse credit. Most lenders require at least 3 to 6 years since discharge, with clean credit conduct throughout that period. That said, a very small number of specialist lenders may consider earlier applications.

For a broader overview of getting a mortgage with credit difficulties, see our bad credit mortgage guide and our poor credit mortgage guide.

How Lenders Assess Severity: The Adverse Credit Tiers

Specialist lenders do not treat all adverse credit the same. Instead, they categorise applicants into severity tiers, and each tier unlocks different products, rates and maximum LTV ratios. Understanding where you sit on this scale determines which lenders will consider you and what terms to expect.

Severity Tier	What It Covers	Typical Deposit Needed	Waiting Period	Rate Premium Above Standard
Light adverse	1-2 missed payments (12+ months ago), small satisfied defaults	5-10%	Often immediately if small and old	+0.5% to 1.5%
Moderate adverse	Satisfied defaults (2yr+), 1-2 small satisfied CCJs (12+ months ago)	10-15%	Typically 12+ months since last event	+1.5% to 3%
Heavy adverse	Recent or unsatisfied defaults/CCJs, completed DMP, discharged IVA	15-25%	12-36 months depending on severity	+2.5% to 4%
Severe adverse	Discharged bankruptcy, repossession, active IVA (rare lenders only)	25%+	3-6 years since discharge	+3% to 5%

The single most important variable is recency, not size. For instance, a £300 CCJ from 4 months ago is harder to place than a £5,000 satisfied default from 3 years ago. If you are unsure where you sit on this scale, a broker can assess your credit file and tell you immediately.

Which Specialist Lenders Accept Adverse Credit?

The specialist lenders below are the ones most commonly used for adverse credit mortgage applications in the UK. Importantly, none of them are available on comparison sites or direct to consumers. As a result, you can only access them through a mortgage broker.

Lender	Max LTV	CCJ/Default Criteria	Key Strengths
Pepper Money	85%	CCJs up to £10,000. Defaults no limit on value if satisfied. Nothing registered in the last 6 months. DMP borrowers accepted from 1 day after completion.	Manual “human” underwriting. Disregards up to 2 defaults of £200 or less on utilities, comms and mail order.
Kensington	85%	Defaults from 6 months. CCJs from 12 months. Considers IVA applicants 12 months post-discharge.	Ignores combined utility defaults up to £250. Does not consider comms or insurance defaults at all. Competitive rates for light-to-moderate adverse.
Aldermore	85%	Satisfied defaults over 12 months. Combined defaults and CCJs up to £300 per application. Considers DMP borrowers.	Strong option for self-employed borrowers with credit issues. Assesses applications on individual merit.
Together	85%	Accepts recent defaults. Flexible on CCJ age and value. Higher deposit needed for more severe cases.	One of the most flexible for heavy adverse. Fast processing. Also good for unusual properties.
Bluestone	80%	Accepts defaults and CCJs. Considers discharged bankruptcy and repossession after 3 years.	Disregards telecoms and utility defaults under £500. Particularly strong for severe adverse post-bankruptcy.
Vida	80%	Flexible criteria. Excludes any single item under £500 from how it tiers your case.	Generous threshold for ignoring small defaults. Well suited to moderate adverse with a few small blips.

First-Time Buyer with Adverse Credit

Getting on the property ladder with adverse credit is harder than it would be with a clean file, but it is far from impossible. In fact, specialist lenders actively cater to first-time buyers with credit issues. The key differences compared to a standard first-time buyer application are a larger deposit requirement, higher interest rates, and a smaller pool of available lenders.

Deposit and income considerations

With clean credit, a first-time buyer can get a mortgage with as little as 5% deposit. With light adverse credit, for example a couple of old missed payments, 5% to 10% may still be achievable through some mainstream or near-prime lenders. For moderate adverse cases involving satisfied defaults or small CCJs, expect to need 10% to 15%. On the other hand, heavy adverse typically requires 15% to 25%. Use our mortgage calculators to see how different deposit sizes affect your monthly repayments.

When it comes to income, specialist lenders assess affordability in a similar way to mainstream lenders (4 to 4.5 times income), although they may stress-test at a higher rate, which consequently reduces your maximum borrowing slightly. If you have a second job or earn overtime or bonus income, these can still count towards affordability with most specialist lenders.

Schemes and guarantor options

Some shared ownership and First Homes schemes may be accessible to buyers with light adverse credit. However, individual housing associations and lenders set their own criteria. Because of this, the combination of scheme rules and adverse credit criteria creates a narrow window of eligible products, making broker guidance essential.

Alternatively, if a family member is willing to act as a guarantor or joint borrower (without being on the title deeds), this can open up more lender options. A Joint Borrower Sole Proprietor (JBSP) mortgage lets a parent support your affordability without triggering the stamp duty surcharge on their end. Not all specialist lenders offer JBSP, but some do.

Before speaking to a broker, check your credit file with all three UK agencies (Experian, Equifax, TransUnion). Small errors, satisfied debts still showing as outstanding, or old addresses not updated can all affect your tier. In practice, fixing these before you apply costs nothing and can genuinely move you from one severity tier to a better one.

Remortgage with Adverse Credit

Remortgaging with adverse credit is a different situation from buying for the first time, because you already own the property and may have significant equity built up. As a result, that equity becomes your strongest asset in this process. The more equity you have, the lower your loan-to-value ratio, and consequently the more lender options open up, even with adverse credit on your file.

Escaping the SVR trap

The most common reason homeowners with adverse credit need to remortgage is that their fixed-rate deal has ended and they have rolled onto their lender’s Standard Variable Rate (SVR). As of August 2026, most SVRs sit between 6.5% and 8.25%, which can add hundreds of pounds to monthly payments. If your credit has deteriorated since you took out the original mortgage, you may feel stuck. In reality, however, specialist lenders can remortgage you off the SVR at a rate that, while higher than a mainstream deal, is often significantly lower than the SVR you are currently paying.

Furthermore, if you bought your property 5 or more years ago, it is likely worth significantly more than what you paid. For example, if you originally borrowed 90% LTV and the property has risen 15% to 20% in value, you may now be at 70% to 75% LTV, which puts you into a much better rate bracket even with adverse credit. A broker can calculate your current equity position and show you what remortgage rates are available.

Product transfers and debt consolidation

Before looking externally, it is worth checking whether your current lender offers a product transfer. This involves moving from the SVR to a new fixed or tracker deal with the same lender. Product transfers sometimes avoid a full credit check, which means your current adverse credit may not be reassessed. Although not all lenders offer this, and the rate may not be the best available, it is always worth exploring as a first step.

In contrast, some homeowners with adverse credit want to remortgage to consolidate other debts (credit cards, personal loans) into the mortgage. While this can reduce your total monthly outgoings, it also means securing unsecured debt against your home, which increases the risk. Your adviser is required to assess whether this is in your best interest and warn you of the risks. For more on secured lending, see our debt consolidation mortgage guide.

If your adverse credit happened after you took out your current mortgage due to a job loss, divorce or illness, make sure to explain this to your broker. Many specialist lender underwriters take life circumstances into account, especially if your financial position has since stabilised.

Small Defaults Lenders Ignore Completely

This is one of the most valuable pieces of information in adverse credit lending, and most guides skip it entirely. Several specialist lenders have formal policies to disregard small defaults on non-essential accounts. In other words, a forgotten mobile phone bill or an old utility default does not need to define your mortgage application.

Here is how each lender’s disregard policy works. Pepper Money disregards up to 2 individual defaults of £200 or less on utilities, communications and mail order accounts. Meanwhile, Kensington ignores combined utility defaults up to £250 and does not consider communication or insurance defaults at all.

On top of that, Aldermore allows combined defaults and CCJs up to £300 per application. Bluestone takes this further by disregarding telecoms and utility defaults under £500. Finally, Vida excludes any single item under £500 from how it tiers your case entirely.

Therefore, if your only adverse credit is a small default on a phone contract or utility bill, you may not need a specialist product at all. A broker can check whether the default falls below a lender’s disregard threshold, which could mean accessing a near-prime or even mainstream rate instead.

How Much Deposit Do You Need?

The deposit you need depends directly on the severity of your adverse credit. In general, higher risk means a larger deposit to offset the lender’s exposure.

Credit Situation	Typical Min Deposit	Notes
Missed payments only (12+ months ago)	5-10%	Some mainstream lenders may still accept you
Satisfied defaults (2+ years old)	10-15%	Specialist lenders most likely needed
Recent or unsatisfied defaults	15-20%	Smaller pool of lenders available
Satisfied CCJs	15-25%	Higher deposit unlocks better rates
Discharged IVA (12+ months)	15-25%	Clean conduct since discharge essential
Discharged bankruptcy (3+ years)	25%+	Very limited lender pool, broker essential

What Interest Rates to Expect

Adverse credit mortgage rates are higher than standard rates because the lender takes on additional risk. The premium depends on your severity tier, deposit size and the specific lender. Here is a general guide based on 2026 market conditions, with standard two-year fixed rates for prime borrowers currently sitting around 4% to 5%.

Rate ranges by severity

For light adverse cases involving missed payments or small old defaults, rates typically range from 5% to 6.5% with a 10% to 15% deposit. Moving up to moderate adverse with satisfied defaults over 2 years old or small CCJs, expect rates between 5.5% and 7% with a 15% deposit.

In more heavy adverse situations involving recent defaults, recent CCJs or a completed DMP, rates generally sit between 6.5% and 8.5% with a 20% deposit. At the most severe end, discharged bankruptcy or repossession cases can see rates of 7% to 9%+ with a 25%+ deposit.

To put this in context, the cleanest tiers from specialist lenders like Kensington and Pepper Money start in the mid-5% range at 75% LTV, while the heaviest tiers at higher LTVs can run into the 8% to 9% range.

Adverse credit is not permanent

Importantly, an adverse credit mortgage does not have to be a long-term arrangement. Once your credit improves, for example when defaults drop off your file after 6 years and clean payment conduct builds your score, you can remortgage to a cheaper mainstream product. As a result, many borrowers treat the first 2 to 3 years on a specialist product as a stepping stone back to the mainstream market.

To model how different rates affect your monthly repayments, use our mortgage calculators.

How UK Mortgage Finder Can Help

UK Mortgage Finder connects you with FCA-regulated, whole-of-market mortgage advisers who specialise in adverse credit applications. Our advisers have direct relationships with Pepper Money, Kensington, Aldermore, Together, Bluestone and other specialist lenders. As a result, they can review your credit file, identify which tier you fall into, and match you to the lender most likely to approve your application at the best available rate.

The service is free, with no obligation. Whether you are a first-time buyer with a CCJ from 3 years ago, a homeowner stuck on an SVR because your credit has deteriorated, or someone whose only issue is a forgotten phone bill default, our advisers will find the right path forward.

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