Can I get a mortgage after having a default?
Key takeaways:
A default doesn’t automatically mean you’ll be declined for a mortgage , but it can reduce your lender choice and increase the interest rate you’re offered.
Lenders look at the detail, not just the default itself. That includes when it was, how much it was for, whether it’s settled, and how you’ve managed your money since.
Time makes a difference. Older, settled defaults with clean recent conduct are usually viewed more favourably.
You can improve your chances of getting a mortgage by checking your credit report, correcting errors, reducing debt, and passing affordability tests.
Can I get a mortgage with a default?
Yes, it’s possible to get a mortgage with a default. But your options may be narrower.
Mortgage lenders use your credit history to assess how risky it would be to lend to you. A default signals that you failed to keep up with repayments and that the lender closed your account after repeated missed payments. That can make you appear higher risk.
However, lenders don’t all assess risk in the same way. Some mainstream high-street banks may decline applicants with recent or large defaults. Others, including specialist adverse-credit lenders and some building societies, may consider your application.
It’s also important to know that defaults stay on your credit file for six years. We will look at the impact of older and more recent defaults later on in this guide.
What is a default and how does it show up on my credit file?
A default on your credit file is a serious, long-term mark indicating a lender has closed your account because you broke the agreement by consistently failing to make payments.
A default will significantly damage your credit score. It will stay on your credit report for six years, and make obtaining credit harder.
Missed payments vs arrears vs default
Missed payment: You fail to make one scheduled payment. This is marked on your credit file but isn’t yet a default.
Arrears: You’re behind on payments, often by more than one month.
Default: After repeated missed payments, the lender issues a formal default notice and closes the account.
A default is more serious than a one-off missed payment because it indicates a breakdown of the credit agreement.
How long does a default stay on my credit file?
A default stays on your credit file for six years from the default date. This is recorded by the UK’s main credit reference agencies: Experian, Equifax, and TransUnion.
Length of time | Action |
|---|---|
Months 1-3 | Missed payments |
Months 3-6 | Account ‘in arrears’ |
Month 6 | Default registered |
Years 1-2 | Big impact on ability to get a mortgage and other credit |
Years 2-3 | Impact reduces if payment history is good |
Years 4-5 | More choice of lenders |
Year 6 | Default automatically drops off credit file |
Will a default still be visible if I pay it off?
Yes, a default will still be visible if you pay it off. Paying it off won’t remove the default from your credit file early.
Instead, your credit file will show the account as:
Settled: Paid in full
Partially settled: You agreed to pay less than the full balance
Unsatisfied: Still outstanding
We’ll explain the impact of an account being settled or not later on in this guide.
How do mortgage lenders assess a default?
Mortgage lenders assess a default by looking at the story behind it. Lenders want to judge risk, and they’ll weigh up several factors.
Typically, a lender will assess:
The date of the default
This is often the most important factor. A default from five years ago is far less concerning than one from five months ago.
The amount
A £150 mobile bill default is very different from a £5,000 loan default. Smaller, lower‑risk defaults have less impact.
The type of credit
Some lenders treat certain types of defaults more leniently. Defaults on utilities, mobile, broadband, or buy now pay later are often seen as lower‑risk. Defaults on credit cards, loans, overdrafts are viewed as more serious because they relate to borrowing behaviour. Mortgage arrears are the most serious of all.
What you’ve done since
Lenders want to see evidence that the issue was a one‑off. They’ll look for a clean recent payment history, no new missed payments and a sensible approach to credit.
Does the type of default matter?
Yes, the type of default usually matters. A default on a utility bill or mobile phone contract may be viewed differently from one on a large unsecured loan or credit card. Some lenders see small telecom or utility defaults as administrative or one-off issues. Others treat all defaults similarly.
Defaults relating to previous mortgages or secured loans are usually viewed more seriously.
What matters more - the default itself or what I’ve done since?
In many cases your recent track record matters just as much, if not more, than the default itself.
If your default was four years ago and you’ve made every payment on time since, that can show improved financial behaviour. On the other hand, a default from last year followed by further missed payments may be a red flag.
Lenders are looking for patterns. One historic issue can be easier to explain than ongoing financial difficulty.
How old does my default need to be to get a mortgage?
There’s no universal rule about how old a default needs to be before you can get a mortgage. However, as a general guide:
Less than 1 year old: Fewer lender options, likely higher rates and deposit requirements
1-3 years old: More options, especially if the default is settled
3-6 years old: Wider lender choice if your recent history is clean
Over 6 years old: No longer visible on your credit file
Why do older defaults matter less?
As the default ages, it often carries less weight in mortgage underwriting decisions.
A recent default suggests current financial strain. An older default followed by years of stable payments suggests the problem may have been temporary.
What happens once a default drops off my credit file?
Once the six‑year mark passes, the default automatically disappears from your credit report. Lenders won’t see it, and it won’t affect your score.
However, you should still answer questions on credit applications honestly. Some lenders ask if you’ve ever had credit issues, not just within the past six years.
What if my default date looks wrong?
If you think the default date is incorrect. For example, if it was registered later than it should have been you can raise a dispute with the credit reference agency and the lender.
It’s worth checking all three credit reports (Experian, Equifax, and TransUnion) before applying. If you spot errors, challenge them early.
Does it matter if my default is settled?
Yes, it usually matters if your default is settled or not.
Lenders will see one of three statuses on a default.
Settled: You’ve paid the full amount. This shows responsibility and is viewed most positively.
Partially settled: You’ve agreed a reduced payment with the lender. Better than leaving it unpaid, but some lenders may still be cautious.
Unsatisfied: The debt is still outstanding. This is the hardest position from which to get a mortgage.
Settling a default can help your chances of getting a mortgage, but time still matters. If you clear a default that was registered last month, it’s still recent. Some lenders may require 6–12 months after settlement before considering your application more favourably.
How many defaults are too many for a mortgage?
There’s no fixed number of how many defaults are too many for a mortgage. But multiple defaults can suggest a pattern rather than a one-off issue.
Lenders may look at:
The number of defaults
The total value across them
Whether they occurred around the same time
Whether you’ve had further missed payments
For example, three small defaults from the same difficult period five years ago may be viewed differently from three separate defaults over the past 18 months.
Additional issues such as County Court Judgments or ongoing arrears can further reduce lender choice. If you have multiple credit problems, it’s especially important to understand your full credit profile before applying.
How much mortgage deposit do I need if I have a default?
Having a larger deposit can improve your chances of getting a mortgage if you have a default.
This is because lenders look at your loan-to-value ratio (LTV), the percentage of the property’s value you’re borrowing.
A lower LTV, meaning a bigger deposit, reduces the lender’s risk. If you default again and the property has to be sold, the lender has more of an equity buffer.
Why does a bigger deposit help?
Lower deposits tend to narrow lender choice, especially if you have adverse credit.
With a 5% deposit and a recent default, your options may be very limited. With a default and a 15% or 20% deposit, more lenders may be willing to consider you.
What if my deposit is gifted?
Gifted deposits are common, particularly for first-time buyers. But lenders will usually:
Ask for a gifted deposit letter
Confirm the money isn’t a loan
Check the source of funds for anti-money laundering purposes
A gifted deposit doesn’t automatically harm your chances, but it does add extra checks.
Which lenders are more flexible with defaults?
Specialist adverse-credit lenders will be more flexible with defaults than mainstream high-street lenders.
Some major banks may decline applicants with recent or large defaults. Others have clear rules like no defaults within the past two years.
Specialist lenders may accept recent defaults, unsatisfied defaults or multiple issues but usually at higher interest rates.
Some building societies take a more manual, case-by-case approach. Instead of relying solely on automated credit scoring, underwriters may review your circumstances in more detail.
How can I check criteria without harming my credit score?
A mortgage broker can help you check lenders’ criteria without harming your credit score. A good broker can match you to lenders more likely to accept your profile
It is a good idea to use a mortgage broker if you have a default on your credit file or a poor credit score. If you make multiple full applications in a short space of time, this can lead to several hard searches on your file. This will further dent your credit score. A broker can advise on which lenders are likely to accept your application, reducing the chances of being rejected.
Will a default increase my mortgage interest rate?
Yes, a default will often increase the interest rate you pay on your mortgage.
Interest rates reflect risk. If your credit history suggests a higher chance of missed payments, lenders price that in. The difference in rate can be more noticeable with recent or multiple defaults.
The good news is that as your default ages and your credit conduct improves, you may be able to remortgage onto more competitive deals later on.
How can I improve my chances of mortgage approval?
If you’re planning to apply for a mortgage after a default, preparation is key.
Check your credit reports
Review your credit reports from Experian, Equifax, and TransUnion. Look for incorrect default dates, duplicate entries and accounts marked as open when they’re closed. Dispute any errors before applying for a mortgage.
Reduce outstanding debt
Lower credit card balances and avoid maxing out limits. This can improve both your credit profile and affordability assessment.
Avoid multiple hard searches
Space out credit applications. Too many searches in a short period can make you look desperate for credit.
Strengthen affordability signals
Lenders assess your bank statements as well as your credit file. Consider, reducing discretionary spending, avoiding gambling transactions, clearing overdrafts where possible, and keeping bills paid on time
Prepare documentation
To speed up the underwriting process, it helps to gather your documents in advance - usually three months of bank statements, recent payslips (or SA302s if you’re self‑employed), proof of your deposit, and standard ID and address documents.
Lenders may also ask for a short written explanation of the default. Keep this factual and to the point, so the lender can understand what happened and how your situation has changed since.
Frequently asked questions
Can I get a mortgage with a default if I’m a first-time buyer?
Yes - but you may need a bigger deposit and to apply to a specialist lender, depending on how recent and serious the default is.
Some lenders specialise in helping first-time buyers with adverse credit.
Can I remortgage with a default?
Yes. If your current deal is ending, you may be able to remortgage with your existing lender (a ‘product transfer’), which often involves less strict credit checks.
Switching to a new lender may be harder if the default is recent. You may have fewer options and could move onto a higher rate.
Will a default affect a mortgage in principle or AIP?
Yes a default can affect a AIP. Lenders usually run soft checks for AIPs. This kind of credit check will give the provider access to the key information on your credit file, including any defaults, missed payments or CCJs.
What if the default is incorrect or unfair?
If you believe a default was wrongly recorded, raise a dispute with the lender and the relevant credit reference agency.
Provide evidence like bank statements or correspondence and request a correction. If you’re unhappy with the outcome, you can escalate your complaint to the Financial Ombudsman Service.
Author
Emma Lunn
Personal finance expert
Emma has written about personal finance for almost 20 years, with a career spanning several recessions and their inevitable consequences. Emma’s main focus is helping people learn to manage their...
Reviewer
Alan Cairns
Senior Content Editor
Alan helps MoneySuperMarket break down complicated financial topics into plain English, to help you find the right deals. When he’s not writing or editing you might find him cycling the South Downs.
