← Mortgage guides

Adverse credit

Mortgage with a default

A default on a credit file can feel like a hard stop. For many residential lenders it is a set of facts to weigh, not a single banned word. This note is expectation-managed information from Property Money Limited — not advice and not a personal recommendation.

The problem

People often hear “you have a default” and assume every lender will decline. High-street criteria can be tight. Specialist lenders may still look — on their own terms. The useful question is not “can anyone with a default get a mortgage?” It is whether this default, on this application, sits inside criteria someone will actually underwrite.

What usually matters

• Unsatisfied vs satisfied. An open (unsatisfied) default is usually harder than one marked satisfied or settled. Some routes want it cleared before offer; others may allow settlement on completion.
• Amount — roughly ≤£500 vs over £500. Smaller defaults are more often tolerated once aged. Larger ones more often push the case toward specialists or longer waits.
• Timing — last 3 years vs over 3 years. Many mainstream policies soften once a default is older. Recent defaults (especially in the last 12–36 months) narrow the field.
• More than one default. A pattern of multiple defaults is a different conversation from a single historic miss. Lenders look at conduct, not only the newest line.
• What the rest of the file shows. Missed mortgage payments, CCJs, IVAs and bankruptcy sit in related buckets. Defaults do not exist in isolation on a scorecard.

Paths that often help

• High street where criteria allow. Older, smaller, satisfied defaults sometimes still fit selected mainstream products — never assume; criteria change.
• Specialist / adverse credit lenders. Built for recent or larger adverse. Pricing and LTV are often less generous than a clean high-street deal.
• Settled on completion. Where a lender will proceed if the default is cleared from sale proceeds or other funds at completion, that needs planning with the conveyancer — not a hope on the day.
• Waiting and rebuilding. Sometimes the honest path is time: satisfy what you can, keep other commitments clean, and re-test when the default ages past a policy threshold.

Mortgagability in plain terms

Mortgagability here means: does a lender’s published (or broker-known) policy treat your default as acceptable for the loan size, LTV and term you want? The word “default” alone does not answer that. Status, size, age and multiplicity do. Illustrative payment maths on our mortgage calculator do not check credit — they only sketch cashflow shape.

What this page is not saying

It is not saying every default is fine, that you should apply tomorrow, or that any named lender will say yes. Two people with the same word on a credit file can have very different outcomes once dates, balances and the rest of the history are visible.

Before a serious conversation, read your own statutory credit reports. Know what is registered, when it started, and whether it shows as satisfied. Guessing from memory is how people under- or over-state the problem. If you already had a decline, bring the date and whether it was a soft or hard search — repeating the same application in the same place rarely helps.

While you weigh the mortgage, it is fair to ask whether the people who depend on the home would be unprotected if income stopped. The protection gap analyser is an optional illustrative check only.

Specialist pricing and lower maximum LTVs are common trade-offs when the adverse is recent. That can still be a workable purchase or remortgage if the deposit is strong and the monthly payment fits. It is not the same as a clean high-street rate — expectation management means saying that out loud before anyone falls in love with a brochure figure.

If your file also shows CCJs, an IVA, or bankruptcy history, say so early. Those sit in related buckets and change which doors are even worth knocking on. Hiding them to see what happens usually wastes hard searches.

Next step

If you know the amount, date and whether it is still open, that is enough to start a conversation. Bring the facts; skip the labels.