Content Writer
Mortgage Advisor & Director
If your credit history isn’t perfect, but you don’t fall into the “bad credit” category, you might be eligible for a near prime mortgage. This type of mortgage can offer more flexible criteria and better rates than bad credit mortgages. Here, we’ll explain how they work and where to find the best near prime mortgage lenders in the UK.
What is a near prime mortgage?
A near prime mortgage is a home loan designed for borrowers with minor credit issues or those who fall slightly outside traditional lending criteria. For example, you may not qualify for a mortgage with high street lenders due to past issues, such as missed or late payments, a low credit score, or County Court Judgements (CCJs).
While you may not qualify for the full range of mortgages with mainstream lenders, near prime lenders can offer a middle-ground solution with competitive rates, flexible underwriting, and an openness to cases that need a tailored assessment.
How are they different to bad credit mortgages?
While both mortgage types are intended for borrowers with less-than-perfect credit, there are important differences:
-
Near prime mortgages: Are for people with minor issues, like a few missed payments, lower-than-average credit scores, or small defaults.
-
Bad credit mortgages: Sometimes called subprime mortgages, these are for borrowers with more serious issues, such as recent CCJs, IVAs, debt management plans, bankruptcy, or a history of arrears.
Near prime mortgage lenders in the UK typically offer better rates than subprime lenders. In many cases, your mortgage could still resemble a mainstream deal with only slightly higher rates or slightly tighter criteria.
How to get a near prime mortgage
If you’re applying for a near prime mortgage, comparing lenders and understanding each provider’s criteria can be time-consuming and confusing. Every lender will assess credit issues differently (usually on a manual basis) and offer varying rates and terms depending on your circumstances.
Speaking with a mortgage adviser who specialises in near prime mortgages can save you both time and money, reducing the possibility of unnecessary rejections. Our advisers will recommend the most suitable lender based on your credit profile, deposit size, income, and home ownership goals.
If you’d like a free, no-obligation chat with a broker who specialises in near prime mortgage lending, you can get started below:
Speak to a near prime mortgage specialist
Best UK near prime mortgage lenders
If you’re wondering who provides near prime mortgages in the UK, here are examples of popular lenders who may consider applicants with an imperfect credit history:
-
Metro Bank: Near prime mortgages from Metro Bank are specifically designed for customers who just miss out on mainstream rates. They may consider applicants with a lower credit score or a complex financial profile, but with a maximum LTV ratio of 80%.
-
Atom Bank: A digital-first app-based bank, Atom can offer near prime mortgages to some applicants. In some instances, Atom accepts applicants with missed payments (but not in the last 6 months for loans or 12 months for a mortgage payment), defaults (as long as no more than 4, issued at least 12 months ago), and CCJs (but not those registered in the last 12 months).
-
Aldermore: Although they don’t advertise a specific near prime mortgage product, Aldermore is a lender well-known for its ability to be flexible. Your specific credit situation can impact your maximum LTV. For example, no CCJs in the last 36 months could mean access to a 95% LTV, but less than this leads to a lower LTV limit.
If you want to see the full panel of near prime mortgage lenders available based on your individual circumstances, it’s best to get an experienced adviser to show you all the realistic and relevant options.
What interest rate to expect
Rates for near prime mortgages typically fall between those of prime (strong credit) and subprime (bad credit) mortgages:
-
If your credit issues are minor or old (ideally at least 12 months), your near prime mortgage rate could be quite close to standard mainstream interest rates.
-
If your credit profile is closer to subprime, perhaps due to more recent issues, you may pay a higher rate, though still better than what you’d get through a bad credit product.
Your rate will also depend on your deposit, income stability, loan size, whether the rate is fixed or variable, term length, and the severity and recency of your credit issues. Working with a specialist broker ensures you’re matched with a lender offering the best rate for your circumstances.
Why choose Teito for your near prime mortgage?
Our brokers specialise in helping people who fall just outside of mainstream lending criteria secure a mortgage at competitive rates. Whether you’ve had missed payments, defaults, or other minor credit issues, we can match you with near prime mortgage lenders who are more flexible.
Because our brokers have plenty of experience working with near prime borrowers, they understand which lenders are most likely to approve your application, presenting your circumstances in the best way to maximise your chances of success.
Here are some more of the reasons people choose us to help them get a near prime mortgage:
-
Our UK brokers specialise in complex credit
-
Your first chat is free with no obligation to proceed further
-
We have 5-star ratings on leading review sites
-
Introduction to specialist near prime mortgage lenders
Ready to take advantage of a free, no-obligation chat with a broker who specialises in near prime mortgages? Get started here.
FAQs
There’s no fixed score. It’s more to do with your credit history and the length and severity of any adverse credit issues on your file. Even if your score is low or you have a chequered credit history, dealing with the right lender can ensure you still get a competitive mortgage.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.