Content Writer
Mortgage Advisor & Director
If you’ve had credit issues in the past, you might still be able to get a mortgage, but the rates from some lenders may be higher than average. Here, we’ll show you how to compare the best bad credit mortgage rates available in the UK, what impacts the rates, and how to find the most suitable deal for your circumstances.
Are mortgage rates higher for people with bad credit?
Typically, yes. Lenders look at your credit history to assess risk, and if your credit file shows missed payments, defaults, or other adverse marks, they may offer higher interest rates to offset that perceived risk. The more severe or recent the bad credit, the more likely it will affect the rate you're offered from mainstream lenders.
However, not all lenders treat applicants with bad credit the same. Some specialist lenders are far more flexible and offer rates that are closer to standard deals, especially if your issues were minor or from years ago. The key is knowing which bad credit lenders to approach to avoid any unnecessary rejections or high rates.
Compare the best UK bad credit mortgage rates
Our free mortgage comparison tool is tailored to show rates from lenders across the market, including those that accept bad credit applicants. You can customise your search by deposit size, loan type, term length, and more.
We have set this tool to return results from specialist bad credit mortgage lenders, but you can manually change it to display deals from ‘All’ UK lenders under the ‘More Filters’ tab.
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If you have bad credit, comparing mortgage rates becomes even more important. Many high-street banks may decline your application outright, but specialist bad credit lenders across the UK offer flexible options designed for people with poor or complex credit.
Whether you’ve got recent and severe bad credit, or minor issues from years ago, you can compare all the best bad credit mortgage rates currently available in the UK.
Factors that impact your mortgage rate
Several factors will influence the mortgage rate you’re offered when applying with bad credit. Here are the main areas lenders consider when determining your rate:
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Severity and recency of issues: The more recent and serious the issue, the more it can affect your interest rate. Bankruptcy, IVAs, or recent CCJs will typically lead to higher rates compared to older or minor issues like late or missed payments.
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Deposit size and LTV: If you have bad credit, some lenders prefer a larger deposit to offset the risk, meaning a lower loan-to-value (LTV) ratio, and may offer better rates compared to smaller deposits. However, specialist lenders will still offer competitive rates if you have bad credit, regardless of the size of your deposit.
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Credit recovery: If plenty of time has passed and you’ve managed to start rebuilding your credit, certain lenders may be able to offer better rates if you’ve demonstrated a strong track record of reliable repayment behaviour for at least 6 to 12 months.
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Income and employment: A stable income and permanent PAYE employment can help mitigate some of the perceived risk if you have poor credit. If you’re self-employed or have a complex source of income, some lenders are more flexible than others.
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Type of mortgage: Certain mortgage products are better suited to bad credit applicants. For example, fixed-rate mortgages offer more predictable payments, but variable-rate options may sometimes be cheaper. Interest-only mortgages are less common, especially for applicants with poor credit.
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Overall affordability: Lenders will carry out affordability checks to ensure you can comfortably repay the mortgage. If your debt-to-income ratio is too high, it could affect the rate you’re offered and your eligibility for certain mortgages.
Are the best rates available through a broker?
Typically, yes. A broker can compare bad credit rates from mortgage lenders across the UK, including small or niche lenders that can be difficult to find. Also, experienced brokers will have access to exclusive bad credit lenders who can offer rates and deals that aren’t advertised or available to the general public.
With Teito, you can use our free comparison tool to explore bad credit mortgage rates yourself, or we can connect you with a skilled mortgage broker who can find the best lender and the most flexible mortgage options for your needs.
You can compare rates online with us, but if you’d prefer some in-depth guidance, why not have a free, no-obligation chat with a bad credit mortgage specialist here:
Compare bad credit mortgage rates for free
Bad credit remortgage rates
If you’ve currently got a mortgage and have had credit issues since taking it out, there’s no need to panic. The good news is that it’s still possible to remortgage with bad credit, though the rates and options available will depend on your circumstances.
The key things that influence remortgage rates with bad credit include:
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How much equity you’ve built (a lower LTV helps).
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Whether you’ve kept up with your mortgage payments.
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If you’re successfully rebuilding your credit profile.
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The age and severity of any missed payments, defaults or other issues.
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Using lenders that specialise in remortgages for people with poor credit.
You can compare bad credit remortgage rates using our tool above or speak with an experienced broker for tailored advice.
Why choose Teito for your bad credit mortgage?
You can use our free comparison tool to check the latest bad credit mortgage rates from 90+ lenders across the UK. But, if you’d prefer some tailored guidance, we also offer the option to speak with an expert broker who can help you secure the best deal based on your personal circumstances.
Our brokers specialise in helping people with poor credit find a mortgage; they know which lenders are most likely to accept your application and offer competitive rates. They also know where to find exclusive deals and specialist products that aren’t available to people applying directly.
Here are a few more reasons why people across the UK choose Teito when applying for a mortgage with bad credit:
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Compare the best mortgage rates from 90+ UK lenders
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Your first chat with a broker is free, with no obligation to proceed
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We have 5-star ratings across leading review platforms
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Access to exclusive bad credit rates and lenders
Ready to take advantage of a free, no-obligation chat with a broker who specialises in bad credit mortgages? You can get started here.
FAQs
Second home or second charge mortgage rates tend to be higher than first-charge mortgage rates, and if you have bad credit, this can increase further. However, some specialist lenders offer second mortgages to applicants with adverse credit, particularly if you have strong equity and can demonstrate affordability.
A broker can help you explore your options and compare live second mortgage rates based on your specific credit history.
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.