Remortgaging with Adverse Credit: A remortgage is often seen as a routine step.
Your current deal ends, you compare options, and you move to a new rate. But if your credit profile has changed since you took out your mortgage, the process can become less straightforward.
Missed payments, defaults, CCJs, higher credit card balances or debt arrangements can all affect lender options.
That does not always mean you cannot remortgage. It means the case needs to be reviewed carefully before a new application is submitted.
Your home may be repossessed if you do not keep up repayments on your mortgage or loans secured on it.
Remortgaging with Adverse Credit
You may still be able to remortgage with adverse credit.
Lenders may assess:
- Your current mortgage conduct
- The type of credit issue
- When the issue happened
- Whether debts have been paid or settled
- Your income and outgoings
- Your property value
- Your equity position
- Your loan-to-value
- Your reason for remortgaging
- Whether the new mortgage is affordable
A product transfer with your current lender may be one route. A full remortgage to a new lender may be another.
For wider guidance, read our adverse credit mortgage page.
What Does Remortgaging with Adverse Credit Mean?
Remortgaging with adverse credit means reviewing your mortgage options when your credit history includes recent or past financial issues.
This may include:
- Missed payments
- Defaults
- CCJs
- Debt Management Plans
- IVAs
- Bankruptcy
- Mortgage arrears
- High unsecured borrowing
- Previous mortgage decline
The credit issue may have happened after you took out your current mortgage. It may also have existed before, but now needs to be reviewed again.
A lender will usually want to understand both the property risk and the borrower risk.
Can You Remortgage with Bad Credit?
Yes, it may be possible.
Some borrowers with adverse credit can remortgage to a new lender. Others may have fewer options and may need to consider a product transfer with their current lender.
The right route depends on:
- The credit issue
- How recent it is
- Whether it is settled
- Current mortgage payment history
- Property value
- Equity available
- Income and affordability
- Existing debts
- Mortgage term
- Purpose of borrowing
A remortgage is not only about rate comparison. It is also about lender criteria.
Product Transfer or Remortgage?
There are usually two main routes.
A product transfer means moving to a new deal with your current lender. This may involve fewer checks than a full remortgage, depending on the lender and the change being made.
A remortgage usually means moving your mortgage to a new lender. This is more likely to involve a new affordability assessment, credit check, valuation and legal work.
A product transfer may be worth reviewing if your credit file has worsened and your current lender offers a suitable rate.
A remortgage may be worth reviewing if you want to compare wider lenders, raise funds, change terms or move away from your current lender.
You can read more about the wider process on our remortgage page.
How Lenders Assess the Credit Issue
Lenders may look at:
- What happened
- When it happened
- Whether it has been resolved
- How much money was involved
- Whether it was one issue or repeated
- Whether your mortgage has been paid on time
- Whether your recent bank conduct is clean
- Whether the new mortgage reduces or increases risk
Mortgage arrears may be reviewed more seriously than missed payments on smaller credit accounts.
Defaults and CCJs may also affect lender options. GOV.UK says CCJs are usually kept on the register for six years unless paid in full within one month.
Older settled issues may create more options than recent unpaid ones.
Why Equity Matters
Equity can be important when remortgaging with adverse credit.
Equity is the difference between your property value and the mortgage balance. The more equity you have, the lower the loan-to-value may be.
A lower loan-to-value can sometimes improve lender options because the lender is taking less risk against the property.
However, equity does not replace affordability. You still need to show the mortgage is affordable and suitable.
Affordability Still Comes First
A remortgage must still be affordable.
Lenders may assess:
- Employed income
- Self-employed income
- Pension income
- Benefits, where accepted
- Credit cards
- Loans
- Childcare
- Household bills
- Dependants
- Mortgage term
- Future monthly payment
The FCA’s mortgage rules require lenders to assess affordability before entering into a regulated mortgage contract, unless specific exceptions apply.
This means a borrower with equity may still be declined if the lender cannot evidence affordability.
Remortgaging to Consolidate Debt
Some borrowers consider remortgaging to consolidate debt.
This means using mortgage borrowing to repay unsecured debts, such as loans or credit cards. It may reduce monthly payments in some cases, but it can also increase the total amount paid over the mortgage term.
It can also turn unsecured borrowing into debt secured against your home.
This is a serious decision. The FCA has specific rules for debt consolidation where a borrower is credit-impaired. Advice is important before moving unsecured debt into mortgage borrowing.
What If Your Current Deal Is Ending?
If your current mortgage deal is ending, do not wait until the last minute.
You may need time to:
- Check your credit file
- Review your current lender’s options
- Compare remortgage routes
- Prepare income documents
- Get a property valuation estimate
- Understand early repayment charges
- Consider whether borrowing more is suitable
If your credit file has changed, starting early gives more time to plan.
Self-Employed and Remortgaging with Adverse Credit
Self-employed borrowers may need more evidence.
Lenders may ask for:
- Tax calculations
- Tax year overviews
- Accounts
- Business bank statements
- Company details
- Salary and dividend evidence
- Explanation of income changes
If adverse credit is also present, the case may need careful packaging. The lender may want to see both income strength and improved credit conduct.
You can also read our self employed mortgage page.
Documents to Prepare
Before seeking advice, gather:
- Latest mortgage statement
- Current mortgage deal details
- Credit report
- Bank statements
- Payslips or tax documents
- Details of loans and credit cards
- Proof of settled debts
- Property value estimate
- Reason for remortgaging
- Details of any extra borrowing needed
Good preparation can make the advice process clearer.
When Might Waiting Be Better?
Waiting may be sensible if:
- A default or CCJ is very recent
- Mortgage arrears are unresolved
- Your bank statements show ongoing pressure
- Income evidence is not ready
- You need to reduce unsecured debt first
- Your current lender offers a better short-term route
Sometimes the best mortgage decision is not the fastest one. It is the one that keeps the borrower stable.
Speak to Connect Lifetime
If your credit profile has changed and you need to remortgage, speak to Connect Lifetime before applying.
We can review your current mortgage, credit file, equity, income and affordability. This can help you understand whether a product transfer, remortgage or later application may be more suitable.
Your home may be repossessed if you do not keep up repayments on your mortgage or loans secured on it.
FAQs: Remortgaging with Adverse Credit
Can I remortgage with adverse credit?
Yes, it may be possible. Lenders may assess the credit issue, mortgage conduct, equity, income and affordability.
Is a product transfer easier than a remortgage?
It can be, depending on the lender and the changes being made. It may involve fewer checks than moving to a new lender.
Can I remortgage after a default?
It may be possible. Lenders may look at the default date, amount, settlement status and your recent credit conduct.
Can I remortgage to pay off debts?
Possibly, but this needs care. It may reduce monthly payments, but it can increase the total cost and secure more debt against your home.
Should I check my credit file before remortgaging?
Yes. Your credit file helps show what a lender may see before assessing your application.
