Having bad credit doesn’t automatically stop you from remortgaging, but it can affect the deals and rates available. The right approach – and the right lender – can make a real difference.
This guide explains how it works and what to consider before remortgaging.
Remortgage with bad credit
Remortgaging with bad credit doesn’t mean you’re out of options. may consider applications from borrowers with adverse credit, depending on individual circumstances and their lending criteria and how recent the credit issues are.
A bad credit remortgage could help you:
- move off your lender’s standard variable rate
- secure a deal that better fits your current situation
- explore options with lenders that assess credit differently
Can you remortgage with bad credit?
Yes, it’s possible to remortgage with bad credit, but it depends on how severe the issues are, how recently they happened, and whether you’re currently keeping up with repayments.
Lenders look at your credit history to assess risk. Missed payments on things like credit cards or utility bills are recorded by credit reference agencies, which build up a picture of how you’ve managed borrowing over time. There’s no single score that guarantees acceptance or refusal – lenders look at the wider context.
A one-off late payment from a few years ago is unlikely to cause problems. More serious issues, such as missed mortgage payments or unpaid loans, can make it harder to access standard remortgage deals.
That said, there may still be options. Any new mortgage will also be subject to the lender's affordability and lending criteria. If your credit has improved since you took out your current mortgage, or if another lender assesses your situation differently, remortgaging could still be worth exploring. Speaking to a broker like Habito, for free, can help you understand what’s available and which lenders may suit your situation. You can find out how we can help and speak to our mortgage expert.
Your home may be repossessed if you do not keep up repayments on your mortgage.
How does bad credit affect a remortgage?
There are lenders who consider applications from people with bad credit, but the terms are often different. A bad credit remortgage could mean:
- paying a higher interest rate
- being limited in how much you can borrow
- needing more equity in your home – for example, some lenders may look for around 20% equity, which would be an 80% loan-to-value (LTV), the ratio of the loan amount compared to the total value of the property, or more
If your current deal is ending soon, you don’t have to stay on your lender’s standard variable rate without checking your options. You can start by using our remortgage calculator, then speak to a Habito mortgage expert about what deals might be available.
People remortgage for different reasons – an expiring fixed rate, a change in circumstances, or to fund home improvements. With bad credit, lenders are often more cautious about additional borrowing. However, some lenders may take the purpose of additional borrowing into account, although this will depend on their individual lending criteria, as it helps protect the value of the property.
Preparing to remortgage with a poor credit history
It helps to plan ahead. If your deal is ending, start thinking about remortgaging around six months in advance.
In the run-up, keep up with your existing mortgage payments and other bills as consistently as possible. Lenders will check this as part of assessing your application.
It’s also worth reviewing your credit report to make sure the information is accurate and up to date. You can read more about what credit score you might need and how lenders use it. Try to avoid applying for new credit or loans during this period, as this can affect how lenders view your application.
What do lenders look for?
When you start a remortgage application, a lender will usually carry out a soft credit check first. This is a preliminary check that doesn’t affect your credit record.
Later in the process, the lender will complete a full credit check, which is recorded on your credit file. At this stage, they’ll also assess whether the mortgage is affordable based on your income, outgoings, and overall financial position.
What to watch out for with a low credit score
It’s important to factor in any extra costs when remortgaging with bad credit. This can include fees such as arrangement fees, valuation fees, or exit fees from your current deal.
If you’re thinking about switching before your current deal ends, check whether early repayment charges or other fees apply, as these could affect whether remortgaging is worthwhile.. A mortgage broker can help you weigh up whether changing deals now is worth it once all the costs are considered.
Remortgaging with bad credit in a nutshell
You can still remortgage with bad credit, but it can be more complex and your choice of deals may be more limited.
If your current deal is ending, it’s still worth checking what else is available rather than automatically staying with your existing lender. Different lenders assess credit history in different ways, and specialist options may be available.
A mortgage broker can help you understand what’s realistic for your situation and search the market for suitable deals.
Frequently asked questions
What is a bad credit score to remortgage?
There isn’t a single credit score that’s considered “too low” to remortgage. Lenders look at your full credit history, including what happened, how long ago it was, and whether issues have been resolved.
Can you remortgage with a poor credit score?
Yes, you can remortgage with a poor credit history, but the range of options available may be smaller.. Some lenders are more flexible than others, and the terms offered can vary depending on your circumstances.
What’s the lowest credit score you can have to refinance a house?
There’s no fixed minimum low credit score required to refinance. Different lenders use different criteria, and many focus more on recent behaviour, affordability, and equity than on a single number.
Can you release equity with bad credit?
You may be able to take equity out with bad credit, depending on how much equity you have, what the money is for, and how recent or serious the credit issues are. Borrowing more can be harder than switching to a new deal, so it’s worth getting advice first.
Why trust us with a remortgage on a bad credit history?
Get clear guidance on your options and have an honest chat with a mortgage expert about what’s realistic.
Your home may be repossessed if you do not keep up repayments on your mortgage.
