Remortgaging with Bad Credit: A Complete Guide for 2025

Remortgaging with Bad Credit

Remortgaging can be a strategic financial move whether you’re aiming to reduce your interest rate, release equity, or switch mortgage types. However, if you have bad credit, the process becomes more complex. The good news? Even with adverse credit, you still have options, especially with the right advice and access to specialist lenders.

Specialist lenders, often referred to as bad credit lenders, are different from mainstream lenders because they focus on helping individuals with poor credit histories, such as those with CCJs, defaults, IVA’s, or bankruptcy, and may offer more flexible criteria.

This article explains everything you need to know about how to remortgage with bad credit, how to prepare, which lenders can help, and how to put yourself in the strongest possible position.

What is Bad Credit?

Bad credit refers to a history of missed payments, defaults, CCJs (county court judgement), DMPs (debt management plan), IVAs (individual voluntary arrangement), bankruptcy, or even being declined for credit.

Lenders use credit scores and credit scoring systems to assess the risk of lending to applicants with bad credit. Lenders use your credit report to assess the risk of lending to you, and any issues on your file can limit your options or increase the cost of borrowing.

How Bad Credit Affects Remortgaging

1. Fewer Lenders Will Consider You

Mainstream lenders like high street banks tend to avoid applicants with adverse credit, especially recent issues, but bad credit lenders may still consider these applicants.

2. Higher Interest Rates

Specialist lenders will charge a premium because they’re taking on more risk. However, despite higher interest rates, it may still be possible to secure a competitive deal by working with specialist lenders or brokers who can tailor solutions to your individual circumstances.

3. Lower Loan-to-Value (LTV)

You may be restricted to borrowing 70–85% of your property’s value, compared to 90–95% for applicants with clean credit.

4. Stricter Criteria

You’ll need to show a stable income, good affordability, and sometimes offer explanations for your credit issues. The lender’s decision making process involves evaluating multiple factors, including your income stability and any explanations you provide for past credit issues.

5. Impact on Equity Release

If you’re trying to raise capital (for debt consolidation, home improvements, etc.) or to address existing debt, bad credit can reduce the amount you can borrow.

Remortgage Options for People with Bad Credit

If you have a poor credit history, there are still several remortgage options available, thanks to specialist lenders who cater to borrowers with adverse credit. The most common types of bad credit remortgages include:

• Fixed-Rate Bad Credit Remortgages: These deals offer a set interest rate for a fixed period, providing stability in your monthly repayments. Fixed-rate options can be especially helpful if you want to budget with certainty, even if your credit score is low.

• Variable-Rate Bad Credit Remortgages: With these products, your interest rate can change over time, often tracking the lender’s standard variable rate. While initial rates may be competitive, your monthly payments could fluctuate, so it’s important to assess your ability to manage changes in your financial position.

• Debt Consolidation Remortgages: If you have existing debts such as credit cards or personal loans, you may be able to remortgage to consolidate these into your mortgage. This can simplify your finances and potentially lower your overall monthly repayments, but it’s crucial to consider the long-term cost and seek mortgage advice to ensure it’s the right move for you.

• Equity Release Remortgages: If your property has increased in value, you might be able to release equity to fund home improvements, pay off other debts, or cover major expenses. Specialist lenders can help you access these funds, even with a poor credit rating, though the amount you can borrow may be limited by your credit profile and loan to value ratio.

• Specialist Bad Credit Remortgages: Some lenders offer products specifically designed for those with a history of missed payments, defaults, or county court judgements. These bad credit mortgages often come with higher interest rates, but they provide a vital lifeline for borrowers who may not qualify with high street lenders.

Working with a mortgage broker who understands the bad credit market can help you compare remortgage deals and find the right lender for your circumstances. They can also advise on eligibility criteria and help you prepare a strong application, increasing your chances of approval.

How to Improve Your Chances of Remortgaging with Bad Credit

If you’ve got adverse credit, the following steps can improve your chances of success and secure a better deal. When you get a copy of your credit report, make sure to review your banking and credit accounts for accuracy.

1. Know Your Credit Profile

Before applying, get a copy of your credit report. Look for:

• Missed payments or defaults

• Outstanding balances

• Incorrect information

• Open credit agreements you forgot about

• Your current credit scores with each credit reference agency

2. Settle or Satisfy Defaults and CCJs

If possible, settle or clear any outstanding defaults or CCJs (county court judgement). Some lenders will only consider applicants with satisfied adverse credit, especially if the issue occurred within the last 12–24 months.

3. Avoid New Credit Applications

Multiple new credit applications in the 6 months before applying can make you look financially stretched and negatively impact your mortgage application.

4. Show Stability

• Stay in your current employment for at least 3–6 months

• Register on the electoral roll

• Maintain consistent address history

• Ensure bills are paid on time going forward

• Pay all utility bills promptly to show financial responsibility.

5. Reduce Your Credit Utilisation

If you’re using more than 50% of your available credit limits, it can negatively affect your affordability. Reducing balances shows responsible management.

The Remortgaging Process: Step-by-Step

Remortgaging with bad credit involves several key steps, and being prepared can make the process smoother and more successful. Here’s a step-by-step guide to help you navigate your remortgage journey:

1. Review Your Credit File:Start by checking your credit report with all major credit reference agencies. Look for any errors, missed payments, or adverse credit events that could affect your application. Understanding your credit history is essential before approaching any mortgage lenders.

2. Assess Your Financial Situation:Calculate your current income, outgoings, and any existing debts. Use a mortgage calculator to see what you can afford in terms of monthly repayments and loan amount. This will help you set realistic expectations and avoid overstretching your finances.

3. Gather Required Documents:Prepare all necessary paperwork, including proof of income, bank statements, details of your existing mortgage, and explanations for any credit issues. Having these documents ready will speed up the application process and demonstrate that you’re a responsible borrower.

4. Compare Remortgage Deals:Research the market or work with a mortgage broker to compare remortgage options from both mainstream and specialist lenders. Pay close attention to interest rates, fees, early repayment charges, and eligibility criteria. A broker can help you identify lenders most likely to accept your credit profile.

5. Submit Your Application:Once you’ve chosen the most suitable remortgage deal, submit your application. The lender will carry out a credit check and assess your financial position, including your credit score, income, and property value.

6. Valuation and Offer:The lender will arrange a valuation of your property to confirm its value and ensure it meets their criteria. If everything is satisfactory, you’ll receive a formal mortgage offer.

7. Legal Work and Completion:A solicitor or conveyancer will handle the legal aspects of switching your mortgage. Once all checks are complete, your new mortgage will be set up, and your old one paid off. You’ll then start making monthly payments on your new deal.

Throughout the process, staying organised and proactive is key. Working with a specialist mortgage broker can help you avoid common pitfalls and ensure you’re matched with the right lender for your credit circumstances. With the right preparation, remortgaging with bad credit is achievable and can put you on a stronger financial footing for the future.

Documents You’ll Need for a Bad Credit Remortgage

To apply with most specialist lenders, you’ll need:

• Proof of income (payslips, SA302s, accounts)

• ID and proof of address

• Credit report

• Details of your credit accounts (such as credit cards, loans, and overdrafts)

• Explanation of any adverse events (if recent)

• Mortgage statement

• Bank statements (3–6 months)

A specialist mortgage broker can guide you through gathering and presenting these documents in a way that improves your application strength.

Specialist Lenders for Bad Credit Remortgages (2025)

These lenders are known for accepting applicants with varying levels of adverse credit. These are bad credit lenders, who differ from most lenders on the high street by specialising in helping those with poor credit scores. They don’t operate via the high street and typically require applications through brokers. Other lenders may have stricter criteria or may not accept applicants with certain types of adverse credit.

Note: Each lender has different criteria based on:

• How recent the adverse events were

• Whether they’ve been satisfied

• Overall credit profile

• Type of property and income source

What Do Lenders Look For?

Even with bad credit, specialist lenders assess the overall picture, not just your credit score, often using credit scoring systems to evaluate applicants:

• Affordability: Can you comfortably afford the mortgage repayments?

• Reason for adverse credit: Was it due to redundancy, illness, or another understandable reason?

• Stability: Do you have consistent income, address, and employment?

• Severity and frequency: A one-off missed payment is different from ongoing financial mismanagement.

Additionally, working with your existing lender may sometimes be an option, especially if you have a good payment history.

Example Scenarios

Remortgaging After a Default

John had a £300 default on a phone bill 18 months ago but has maintained good credit since. He’s looking to remortgage to release equity. A lender like Pepper Money or Precise may accept him with up to 85% LTV.

CCJs Within the Last Year

Emma has a £500 CCJ from 10 months ago. She’s employed full-time, with good affordability. Bluestone or TML may be options depending on the rest of her profile.

Applicants with an individual voluntary agreement may face similar challenges affecting their credit rating and remortgage rates, and should seek specialist advice.

Debt Consolidation

Mark wants to remortgage to clear credit card debt of £20,000 or other debt such as personal loans or store cards. A lender like Kensington or Aldermore may consider this, provided the new mortgage is still affordable and the reason for debt is explained.

Final Tips for Success

• Work with a specialist broker who knows which lenders will accept your profile

• Be honest on your application. Omitting bad credit will cause delays or rejection

• Get pre-qualified before you apply, to avoid unnecessary credit checks

• Don’t delay—bad credit becomes less of an issue the older it is, but if your fixed deal is ending soon, acting early gives you more options

• Seek advice early if you want to get a mortgage or remortgage with bad credit, as a broker can help you understand your options and improve your chances

Improving your credit profile can also help you access better mortgage rates in the future.

Speak to a Bad Credit Remortgage Expert

If you’re looking to remortgage but have concerns about your credit history, we can help. As a whole-of-market mortgage brokerage, we have access to specialist lenders who understand real life situations not just numbers on a credit file.

Call our team on 01332 470400 or fill out our contact form to speak to one of our specialist mortgage advisers. We’ll help you:

• Understand what’s possible

• Compare lenders that suit your credit profile

• Apply with confidence

You don’t need a perfect credit history to speak to an expert and explore your options.

Don’t let bad credit stop you from making a smart financial move. Help is just a call away.