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Can you get mortgages after bankruptcy?

If you’ve been bankrupt in the past, you’ve clearly had financial difficulties. That means lenders will look very closely at your situation before offering you a mortgage after bankruptcy. But the good news is there are steps you can take to give your application a better chance of success.

If you’ve been bankrupt in the past, you’ve clearly had financial difficulties. That means lenders will look very closely at your situation before offering you a mortgage after bankruptcy. But the good news is there are steps you can take to give your application a better chance of success.

Written by
Alex Hasty
Insurance comparison and finance expert
Last Updated
20 MARCH 2023
6 min read
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Can I qualify for a mortgage after bankruptcy?

If you’ve been made bankrupt, you’re unlikely to be approved for a standard mortgage deal while it’s still on your credit file. This can also be true if you’ve had County Court Judgments (CCJs) against you. But that doesn’t mean you won’t be able to get a mortgage – if you can afford one.

Which banks lend to discharged bankrupts?

Many high-street mortgage lenders won’t lend to anyone with bankruptcy in their credit history. Although a bankruptcy officially ends when you’re ‘discharged’ from your debts (usually 12 months after you were declared bankrupt), it will stay on your credit report for at least six years.

However, there are specialist mortgage lenders for discharged bankrupts who may be able to help you buy a home. The downside is that you’ll probably need a much larger deposit and be charged a higher rate of interest than someone with a good credit score.

How soon after bankruptcy can I get a mortgage?

Some lenders will consider your mortgage application as soon as you’re discharged from bankruptcy. But others might not consider you until you’ve been discharged for at least 12 months, if not for several years.

While bankruptcy remains on your credit file, you’re likely to find it more difficult and more expensive to get a mortgage. The longer you’ve been discharged and shown to have improved your credit record, the more likely you are to find mortgages for discharged bankrupts that offer a favourable interest rate.

If you wait six years until your bankruptcy is removed from your credit file and then apply for a mortgage, you’ll hopefully have had the opportunity to build a good credit score. At this point, it could be worthwhile applying for a conventional mortgage.

How much of a deposit will I need after bankruptcy?

If a bankruptcy is still showing on your credit history, lenders will want a much larger deposit than from a homebuyer with a good credit history because you’re seen as a riskier prospect. How fast and how much you can save for your deposit may be the biggest limiting factor on how quickly you can get a mortgage.

The amount needed will vary among lenders and will also depend on your personal circumstances. But you can use this table as a rough guide.

Time discharged from bankruptcy Estimated deposit needed
Less than a year 40%
One year 25-30%
Two years 15-20%
Three years or more 5-10%

If you wanted to buy a £250,000 property, for example, you’d be expected to pay a deposit of between £12,500 and £100,000. On top of that, you’d have to pay all the usual moving expenses, fees and stamp duty, so make sure you’ve budgeted for all the costs associated with buying a house.

Will I always have to pay a higher rate of interest on my mortgage?

Not necessarily. If you get a mortgage from a specialist lender and meet your repayments on time and in full, your credit rating should start to recover. With a stronger credit rating you might, at some point, be able to remortgage with a conventional mortgage lender offering more competitive interest rates.

Just make sure you understand any fees and penalties you might have to pay if you switch providers.

Tips for getting a mortgage after bankruptcy

There are no guarantees that a lender will accept you for a mortgage after bankruptcy, but these five tips could help improve your chances:

1. Check your credit history and rebuild your credit score

The first step is to check your credit report. It might contain inaccurate information – for instance, the wrong bankruptcy discharge date – that could affect your chances of being accepted for a mortgage. You can access your credit history for free from any credit reference agency in the UK: the main ones are Experian, Equifax and TransUnion.

You should also try to rebuild your credit score as soon as possible. Do this by paying your bills in full and on time every month.

Also look at your credit utilisation ratio – the amount of credit available to you that you’re using – and try to reduce it if possible.

2. Use a mortgage broker

To help with getting a mortgage after bankruptcy, a broker could offer expert advice on the options available to you. This could include applying to a specialist lender – also known as an adverse lender – or waiting until bankruptcy is no longer on your credit file.

Many mainstream lenders shy away from the potential risks associated with someone who has a bad credit record, but specialist mortgage lenders for discharged bankrupts may consider your mortgage application while bankruptcy still appears on your credit record.

We’ve partnered with London & Country Mortgages Ltd (L&C)** to provide you with fee-free mortgage advice. Get in touch with one of their advisors.

Go to L&C mortgages

About London & Country Mortgages Ltd (L&C)

**London & Country Mortgages Ltd (L&C) are a multi-award-winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002).

L&C are not part of Comparethemarket Limited. Comparethemarket receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria.

L&C will not charge you a broker fee should you decide to proceed with a mortgage.

3. Check your eligibility

Adverse lenders may impose stricter eligibility requirements to protect themselves. These can include being discharged from bankruptcy for a certain period and having a clean credit record since your discharge (by not missing any repayments on outstanding credit).

Lenders will also take a close look at your income and outgoings, so make sure your finances are in order before you apply.

Find out more about mortgage eligibility.

4. Save as much as you can for a deposit

As with any mortgage application, the more you can save for a deposit, the better. Having a larger deposit not only reduces your risk to lenders, it can also give you access to mortgage deals with better interest rates and lower the overall cost of your borrowing.

Ideally, you’ll want to save a deposit of at least 10% as this will potentially give you more lenders and mortgage products to choose from, depending on your credit score and when you were discharged from bankruptcy.

Open a savings account as soon as possible and start putting money away. Save regularly if you can.

5. Wait until you’re free from bankruptcy

If you’re prepared to wait it out, it can be beneficial to put as much distance between you and your bankruptcy as you can before applying for a mortgage. It might even be worth waiting until the bankruptcy has been removed from your credit report or you’ve had time to boost your credit score in other ways. Patience can certainly be favourable in this instance. 

Your home may be repossessed if you do not keep up repayments on your mortgage.

The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.

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Alex Hasty - Insurance comparison and finance expert

At Compare the Market, Alex has had roles as Commercial Associate Director, Director of Trading and Director of Growth. He’s currently responsible for the development and execution of Comparethemarket’s longer-term strategic options, ensuring the right breadth of products and services that meet customer needs.

Learn more about Alex

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