Bad Credit Mortgage Rates 2026 — Updated October 2026
- 2yr fix for minor issues — higher for recent defaults and CCJs
- from 4.89%2yr fix for minor issues — higher for recent defaults and CCJs
- Rate premium for minor adverse, 3+ years ago, satisfied
- 0.20%–0.50%Rate premium for minor adverse, 3+ years ago, satisfied
- Rate premium for significant adverse under 3 years
- 0.80%–1.50%Rate premium for significant adverse under 3 years
- Rate premium for recent IVA, bankruptcy, or multiple defaults
- 1.50%–2.50%+Rate premium for recent IVA, bankruptcy, or multiple defaults
Bad credit mortgage rates start from 4.89% in October 2026 for minor issues, and are higher for recent defaults and CCJs. A mortgage with bad credit is possible — but the lender panel is smaller and the rate premium is real. The premium over clean-credit equivalent rates ranges from approximately 0.20% (minor adverse, 3+ years ago, satisfied) to 2.50%+ (recent bankruptcy or IVA). The single most important factor in bad credit mortgage pricing is not what happened, but when — adverse credit from 3+ years ago is viewed significantly more leniently than recent adverse. The second most important factor is whether it has been satisfied. A satisfied CCJ from 4 years ago may add only 0.30% to your rate. An unsatisfied CCJ from 18 months ago may add 1.50%+.
Bad Credit Mortgage Rates by Severity — October 2026
Swipe the table sideways to see every column.
| Adverse type | Age | Satisfied? | Rate premium over clean credit | Max LTV | Named specialist lenders |
|---|---|---|---|---|---|
| Missed payment (1–2) | Any | N/A | +0%–0.20% | 85%–90% | Most specialist lenders. Some mainstream. |
| Default (under £500) | 3+ years | Yes | +0.20%–0.40% | 75%–85% | Pepper Money, Vida, Bluestone, Kensington |
| Default (under £500) | Under 3 years | Yes | +0.50%–0.80% | 70%–75% | Pepper Money, Vida, specialist panel |
| CCJ (any amount) | 3+ years | Yes | +0.30%–0.60% | 70%–75% | Kensington, Bluestone, Vida, Pepper Money |
| CCJ (any amount) | Under 3 years | Yes | +0.80%–1.20% | 65%–70% | Specialist lenders only — restricted panel |
| CCJ (under 3 years) | Under 3 years | No | +1.20%–1.80% | 60%–65% | Very specialist. Higher deposit required. |
| IVA completed | 3+ years ago | Completed | +0.80%–1.20% | 65%–75% | Specialist lenders only. Deposit 25%+. |
| Bankruptcy discharged | 6+ years | Discharged | +1.20%–2.00% | 60%–70% | Very specialist. Private/non-bank lenders. |
What moves bad credit mortgage rates
Time is the most powerful factor
Adverse credit from more than 3 years ago is assessed very differently from recent adverse. Many specialist lenders draw a hard line at 3 years — anything older is treated much more leniently in both rate and LTV terms. If your adverse credit is approaching the 3-year mark, the optimal strategy may be to wait 2–3 months before applying, if that takes you past the threshold. DBF advises on application timing relative to adverse credit age for every case.
Satisfied vs unsatisfied — the practical difference
A satisfied CCJ (registered, then paid and marked satisfied) is viewed more favourably than an outstanding CCJ. Most specialist lenders will lend on satisfied adverse; fewer will lend on unsatisfied. If you have an outstanding CCJ, satisfying it before applying (even if the credit file still shows it for 6 years) significantly improves lender options. DBF always checks adverse credit status before approaching lenders.
The credit file check — what lenders actually see
Most lenders check all three credit reference agencies: Equifax, Experian, and TransUnion. A CCJ registered at court appears on the credit file regardless of which agency you check. The credit file also shows current utilisation, search history, and payment record on active credit. DBF reviews a comprehensive credit report before any application — identifying issues that could cause a decline and advising on how to address them.
Thin credit vs bad credit — an important distinction
Thin credit (no recent credit activity — common for expats returning from abroad, or people who have used cash only) is not the same as bad credit (missed payments, defaults, CCJs). Thin credit has a much wider lender panel and no rate premium. DBF distinguishes between the two and advises accordingly.
What a bad credit mortgage costs: worked example
Buyer with 1 CCJ for £1,800, registered 3 years 6 months ago, satisfied 2 years ago.
Property: £265,000. 20% deposit: £53,000. Mortgage: £212,000.
Mainstream lenders: decline — CCJ on file within 6 years.
Specialist lender via DBF (CCJ satisfied, 3+ years old)
Rate: 5.42% (2yr fix). Monthly (25-year repayment): £1,292.
Clean credit equivalent at same LTV: 4.77%. Monthly: £1,211.
Rate premium: +0.65%. Monthly cost: £81. Over 2 years: £1,944.
After 2yr remortgage: CCJ now 5.5 years old. Lender panel widens significantly.
Remortgage rate (estimated): 4.82%–5.12%. Premium narrows to +0.05%–0.35%.
DBF note: adverse credit premium reduces over time. Remortgage trajectory is planned from day 1.
Rates rose in September — lock in today, review before completion
The figures above are indicative and describe the best case. Send your own scenario and we will come back the same working day with terms from the lenders that actually fit it.
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Rate context and outlook
The Bank of England held Bank Rate at 3.75% on 17 September 2026, its sixth consecutive hold, but three of nine MPC members voted to raise it to 4.0%. The Committee warned policy may have to tighten if the Middle East conflict persists.
Fixed rates are priced from swap rates, and the 2-year swap rose from 4.26% on 3 September to above 4.70% by mid-month, so most major lenders repriced fixed rates upward two or three times in September. The next decision is on 5 November. If your deal ends in the next six months, securing a rate now and reviewing it before completion is the lower-risk approach.
Reviewed by David Doulton, Director, Doulton Bridging Finance — over 20 years in property finance. Last reviewed 1 October 2026. Doulton Money Ltd t/a Doulton Bridging Finance, FCA No. 814533.
Frequently asked questions
Can I get a mortgage with a CCJ in October 2026?
Yes — specialist lenders consider CCJs for residential mortgages. The key factors are the CCJ amount, age, and whether it has been satisfied. Satisfied CCJs from 3+ years ago are viewed most favourably. Recent or unsatisfied CCJs face a smaller lender panel and higher rate. DBF identifies which specialist lenders will consider your specific CCJ profile.
What mortgage rate will I pay with bad credit?
Rates start from 4.89% for minor issues. The rate premium above clean credit ranges from 0.20%–0.50% for minor satisfied adverse from 3+ years ago, to 1.50%–2.50%+ for recent bankruptcy or IVA. The premium reduces as the adverse ages and as you demonstrate clean payment history post-adverse. DBF models the rate trajectory over a 5-year period as part of the advice.
How much deposit do I need with bad credit?
The minimum deposit with adverse credit is typically 15%–25% depending on the severity and recency of the adverse. Minor satisfied adverse from 3+ years ago may only require 10%–15%. Recent significant adverse typically requires 25%–35%. A larger deposit directly improves lender options and reduces the rate premium.
Will my bad credit mortgage rate improve over time?
Yes — adverse credit ages off the credit file after 6 years and is viewed more leniently as it ages before that. Most borrowers with adverse credit remortgage after 2 years to a better rate as the adverse becomes older. DBF plans the remortgage trajectory from the start of the initial mortgage, targeting a better-rate remortgage at the 2-year point.
Should I pay off my CCJ before applying for a mortgage?
Generally yes — satisfying an outstanding CCJ improves lender options and rates, even though it remains on the credit file for 6 years. Some specialist lenders require CCJs to be satisfied before they will lend. DBF advises on the optimal sequence for your specific situation — sometimes waiting until a CCJ reaches 3 years is more valuable than satisfying it immediately.
How much can I borrow?
Usually 4 to 4.5 times income, with some lenders going to 5 or 5.5 times for higher earners and certain professions, subject to affordability.
How long does a mortgage take?
A mortgage in principle takes minutes to a day; a full offer usually takes 2–4 weeks from application.
Is a lower rate with a high fee better than a no-fee deal?
It depends on the loan size. On smaller loans the no-fee deal often wins; we compare the total cost over the fixed period.
How early can I remortgage?
You can secure a new deal up to six months before your current one ends.
What documents will I need?
ID, proof of address, 3 months' payslips and bank statements, or 2 years' accounts or tax calculations if self-employed.
Where this applies
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Independent whole-of-market advice · FCA No. 814533