Updated: March 16, 2022

Bad Credit Mortgage Deposits

Need to find out how much deposit you'll need for a mortgage with bad credit? Will a bigger deposit help? Find out all the answers in our in-depth guide!

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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits. Ask us a question and we'll get the best expert to help.

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No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: March 16, 2022

Having bad credit can make it harder for you to get a mortgage. You’ll often need a bigger deposit to convince lenders to offer you one. How big a deposit you’ll need depends on a number of factors, such as the type of bad credit you have, how long you’ve had it, and whether you’ve managed to pay the debt off.

In this guide, you’ll learn how much deposit you’ll need to get a bad credit mortgage, how the type of credit issue you have affects the deposit requirements, and how a specialist broker can help you get the best deal based on the amount of deposit you have.

How much deposit do you need for a bad credit mortgage?

This depends on how bad your credit actually is. Late payments or unauthorised overdraft charges won’t cause you too much of a problem, and you should be able to get a mortgage with a deposit of 5-10%. But a previous bankruptcy, CCJ or defaulted payments will cause lenders to think twice about accepting your mortgage application, so they’ll ask for a deposit of 30% or more. It’s rare for a lender to ask for a 50% deposit on a mortgage, though.

The main thing to keep in mind is that deposit requirements can vary among lenders, but you can increase your chances of approval with the amount you have by speaking to a broker who specialises in arranging bad credit mortgages.

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Deposit size per type of bad credit

The table below reveals how much deposit you’ll need for a mortgage based on the type of credit issue you have and how severe it is.

Credit issue Severity Minimum deposit required
Multiple credit problems Very severe 40%
Bankruptcy Very severe 25-40%
Repossession Very severe 25-40%
CCJ Severe 30%
IVAs Severe 30%
Debt management schemes Severe 15-30%
Missed mortgage payments Severe 20%
Default payment Severe 10-15%
Late payment Not severe 5-10%
Unauthorised overdraft charges Not severe 5-10%

How a broker can help you

A broker will be completely transparent about what’s in your best interest, and give you exclusive access to the entire market, including specialist lenders and deals that aren’t available on the high street. This means you’ll have a much better chance of getting approved for a bad credit mortgage, whatever deposit amount you have.

They’ll also guide you through the application process and help you with any paperwork – such as the document you’ll need to evidence you deposit – meaning you’ll be more likely to be accepted first time, and this could help you have time, money and potential marks on your credit report in the long run.

Many brokers operate on a success-only mode, meaning they’ll recover any upfront fees if they can’t find you a mortgage. They usually offer free, no obligation consultations too.

Deposit requirements at specific mortgage lenders

If you have bad credit, the amount of mortgage deposit you need to put down can vary based on the type of credit issue, how long you’ve had it for and the reason behind it, as well as the lender you approach.

Below you’ll find a few examples of the deposit requirements

  • Suffolk Building Society will potentially consider customers who’ve had a bankruptcy if they have a deposit of at least 25% and the bankruptcy was satisfied three or more years ago.
  • Dudley Building Society will potentially approve a mortgage after a default if the applicant has a deposit of 20%, or lower if the default has been satisfied by the time of application and the total value of said defaults doesn’t exceed £500. The defaults also have to have been issued over 12 months ago.
  • Loughborough Building Society will potentially offer mortgages to customers with a history of late payments and just 5% deposit, provided they haven’t missed more than two months of payments within the last two years. There must be a reasonable explanation for the missed payments and the applicant’s account needs to be up to date for the last six months.

This is only a snapshot of the market. Plus, many of the biggest high street banks don’t mention how much of a deposit they require for a bad credit mortgage.

If you approach a lender directly, you could fall foul of one of these restrictions, or any number of others we haven’t been able to fit into this article. The good news is that a broker will have a view of the entire market and the kinds of requirements each lender has.

How much equity do you need for a bad credit remortgage?

If you have equity in your property but bad credit, don’t worry, You can still be accepted for a remortgage.

Lenders require the same loan-to-value ratio for remortgages as they do for mortgages. Again, how much equity they need depends on the severity of your credit issue, how long it’s been on your file and the reason behind it.

See the table in the deposit sizes section for examples of how the loan-to-value ratio can vary based on the type of bad credit you have.

Get matched with a bad credit mortgage broker

If you’re applying for a mortgage with bad credit, you might struggle to get accepted on the high street, even if you have a decent amount of deposit to put down.

Our broker matching service will take your unique situation into account and connect you with a broker specialising in that area of bad credit. They’ll be able to tell you which lenders will look more favourably on your application based on the amount of deposit you have, and help you gather all the information needed to make you look like the best possible prospect.

Call 0808 189 0463 or make an enquiry and we’ll set up a free, no-obligation chat between you and your ideal bad credit mortgage broker today.

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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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