Can You Remortgage With Bad Credit in 2026?
- Jun 20
- 11 min read
Can you remortgage with bad credit? Usually yes: your equity does much of the work. Here is how lenders weigh a default, CCJ or missed payments, and how to switch without triggering a fresh decline.
Quick Answer
Yes, in many cases. A homeowner with adverse credit can often remortgage, because the equity already in the property does a lot of the reassuring that a clean credit file would otherwise do. Specialist lenders, reached through a broker, look at the type, age and severity of the issue alongside your equity and whether you can afford the new payment. A historic, satisfied default is treated very differently from a recent one. Where your credit has worsened since you took the mortgage, staying put on a product transfer is sometimes the smarter first move. Either way, the route in is a specialist lender, and in practice a broker who knows which of them is comfortable with your particular history.
Reviewed by Ben Stephenson, FCA authorised (FRN 496907) · 25+ years' experience · 4.9★ on Google. Updated: 20 June 2026.
Who This Guide Is For
Best for homeowners with some equity who have picked up a credit issue since buying, such as a default, a CCJ, a spell of missed payments, or a debt management plan, and whose fixed rate is ending or who want to release equity. It is aimed at people whose finances are now back on a steady footing, rather than anyone still in the thick of a crisis, where a different conversation is needed first.
Key Points
Your equity is the lever: the more you hold, the wider the lender list, even with adverse credit
Type, age and severity of the issue matter more than the credit score itself
A product transfer with your current lender often avoids a fresh credit check; a remortgage opens the whole market
Table of Contents
Bad credit does not lock you out of a remortgage
It is easy to assume that a default or a CCJ ends any hope of remortgaging, but that is rarely the case for a homeowner with equity. When you already own a slice of your property, a lender is being asked to refinance an asset you have a real stake in, not to gamble on a stranger. That equity changes the maths, and it is why a remortgage is often more achievable than a fresh purchase would be for the same person. Lenders are, after all, refinancing something you have already proven you can hold and pay for.
Adverse credit narrows the field rather than closing it. A smaller group of specialist lenders price for the extra risk and look past the automated credit score to the story behind it. A missed payment during a redundancy that has since been put right reads very differently from a pattern of recent problems, and a good lender reads that context. The work is matching your particular history to a lender comfortable with it.
So the honest headline is an encouraging one. If you have equity, a steady income now, and an issue that is explainable or ageing into the past, a remortgage is usually on the table. The rest of this guide is about how lenders weigh the case and how to approach it without harming your chances. None of it rests on a perfect score; it rests on showing a lender that the home, the equity and the income all stack up.
Why your own lender and the high street may hesitate
Mainstream lenders run most remortgage decisions through automated scoring. A default, a recent CCJ or a debt management plan can trip that system, and the application is declined before anyone weighs the wider picture. It is not a considered judgement on you; it is a filter set for clean files, and an adverse marker simply falls outside it. The frustrating part is that the very same case, looked at by human eyes, would often be perfectly workable. Knowing that the wall is a system rather than a verdict is the first step to getting past it.
Your existing lender can be cautious too. If you ask to borrow more or change the terms, some treat it as a new application and re-check your credit, which can surface the very issue you are worried about. Specialist lenders take the case by hand instead, and because most work only through intermediaries, a broker who places specialist mortgages is the practical route to them. They know which lenders accept which issues, so your case lands where it has a chance rather than where it does not. That single piece of routing is often the difference between a decline and an offer.
How a specialist lender reads a bad-credit remortgage
A specialist lender weighs three things together: the equity in your home, the credit issue itself, and whether you can comfortably afford the new payment. Equity does the heavy lifting, the credit issue sets which lenders will look at all, and affordability decides the amount. The graphic sets out the same three pillars. None of the three stands alone, and strength in one can offset a weakness in another, which is exactly the judgement an automated score cannot make.
Within the credit issue, three details decide almost everything: the type (a communications default is viewed far more gently than a mortgage arrears), the age (a satisfied default three years back barely registers with some lenders), and the severity. The table shows how the common situations tend to be treated. These are typical patterns, not promises; every lender sets its own line.
Your credit issue | How a lender treats a remortgage |
Historic, satisfied default (3+ yrs) | Often workable across several lenders, up to around 85% LTV |
Recent default or CCJ (last 12 months) | A narrower, slightly pricier list, around 70 to 80% LTV |
On a debt management plan, kept up | Some specialist lenders consider it, around 70 to 75% LTV |
Several recent issues together | Specialist and equity-led, around 60 to 70% LTV |
The pattern is clear: the more equity you hold and the older the issue, the more lenders open up and the better the pricing. If your problem is recent, a larger equity stake is what reassures a lender, much as a bigger deposit would on a purchase. Time and equity are the two things quietly working in your favour. It is worth gathering the paperwork that proves both before you apply, because a lender moves faster when the equity and the income are easy to see on the page. Two applicants with the very same default can be offered quite different terms, simply because one holds more equity and presents a cleaner story.
Remortgage or product transfer?
There is an important fork in the road, and taking the wrong one can cost you. A product transfer keeps you with your current lender on a new rate, usually with little or no fresh underwriting and often no new credit check. A remortgage moves you to a different lender, which means a full application and a new credit search. The graphic lines them up. The distinction sounds technical, but it can decide whether your switch goes through smoothly or stalls.
If your credit has worsened since you took the mortgage, a product transfer is often the safer first look, because it sidesteps the fresh scoring that might decline you elsewhere. If your issue is historic and your equity is strong, a full remortgage may open better rates than your lender will offer. A broker can compare your current lender's transfer against the wider market so you switch only when it genuinely pays. It is one of the few decisions where doing nothing dramatic, and simply transferring rather than switching, can be the cleverest play. Our guide to remortgaging when your home's value has changed covers a related angle.
Should you remortgage now? The trade-offs
A remortgage with adverse credit can be the right move or a costly one, depending on your numbers, so it pays to weigh both sides before you commit. On the gains side, the clearest is leaving an expensive standard variable rate for a fixed, predictable payment, which on its own can justify the switch. A remortgage can also release equity for a clear, sensible purpose, such as funding home improvements that add value, and it gives you a fresh start as the credit issue ages quietly into the past.
Set against that are a few things to check first. Rates for adverse credit sit above the sharpest prime deals, so the saving has to be real once any early repayment charge on your current deal is counted in. If you are releasing equity, remember you are moving that borrowing onto your home, which is secured against it, so a clear plan to stay on top of the larger balance matters more than the headline rate. And switching to a new lender means a fresh credit search, which a product transfer with your existing lender would usually avoid.
The most common win we see is simply moving off a high standard variable rate onto an affordable fixed one before the issue has even aged off. The most common trap is releasing equity to clear other debts without a plan, which can turn short-term relief into a longer-term strain. Weighing the two honestly, ideally with advice, is what keeps a remortgage firmly on the right side of that line.
What the underwriter actually looks at
Beyond the headline credit issue, an underwriter is building a picture of stability. They want to see that the problem has a beginning and, ideally, an end: a default that is now satisfied, missed payments that stopped twelve months ago, a debt management plan being met without fail. A clear arc from problem to recovery is far more persuasive than a flat assurance that things are fine now. Dates matter here, because an underwriter likes to see how long ago the trouble was and how long the recovery has since held.
They also look at conduct on the mortgage itself. Keeping your current mortgage paid on time, even while other credit slipped, carries real weight, because it shows the home comes first. Recent payslips or accounts, bank statements that show the new payment is comfortable, and a tidy explanation of what happened all help the case move. The cleaner the story and the evidence, the faster an underwriter can say yes. Small things help too: settling a lingering default before you apply, or holding off on new credit in the months beforehand, both nudge the case in the right direction.
This is where presentation matters. The same history can be declined by one lender and accepted by another, purely on how the case is packaged and which desk it reaches. A broker who knows the specialist panel frames the issue, points the application at a lender comfortable with it, and heads off the queries that slow a case down.
Case study: a default two years after buying
The following is an illustrative example, not a quote or a guaranteed outcome. A couple in the Midlands had bought their home four years earlier, then picked up a default on a credit card during a period of reduced income two years ago. The default was now satisfied, their income had recovered, and their fixed rate was about to end and roll onto a much higher standard variable rate. On paper they looked like the sort of application an automated system turns down without a second glance.
Their own bank declined a new deal on the automated check. With around 30 percent equity in the home and a clean mortgage-payment record throughout, we placed the case with a specialist lender comfortable with a single, satisfied default. They moved onto a fixed rate well below the standard variable rate they were heading for, with a payment they were comfortable meeting. The default had aged into the background, and the equity did the rest. It is a pattern we see often once an issue is historic and satisfied: the marker that worried the borrower mattered far less to the right lender than the stake they held in their home. It is rarely the score that wins these cases; it is the equity, the steady income, and a tidy explanation of what went wrong.
FAQs
Can I remortgage with a default on my credit file?
Often yes, especially if the default is satisfied and a year or more old. A specialist lender reached through a broker looks at the type, age and severity of the default alongside your equity and current affordability, rather than declining automatically on the score. The more equity you hold and the longer ago the default was registered, the wider the choice tends to be.
Is a product transfer easier than a remortgage with bad credit?
Frequently, yes. A product transfer keeps you with your current lender on a new rate, usually with no fresh credit check, so it can sidestep a decline. A full remortgage opens the wider market and may beat your lender's offer where your credit issue is historic and your equity is strong.
Will remortgaging hurt my credit score further?
A remortgage to a new lender involves a credit search, which can dip your score briefly. A product transfer with your existing lender often does not. A broker can tell you which route fits your situation before any search is run.
How much equity do I need to remortgage with adverse credit?
There is no single figure, but more equity widens the lender list and improves pricing. As a rough guide, many specialist lenders look for the equivalent of a 15 to 30 percent stake, with the larger end expected where the credit issue is recent or severe. A larger stake also tends to unlock a slightly sharper rate, because it lowers the lender's risk.
Can I remortgage while on a debt management plan?
Sometimes. A handful of specialist lenders consider applicants on a debt management plan that is being kept up, particularly with meaningful equity. It is a narrower market, so a broker who knows which lenders are open to it is worth a great deal here, because applying to the wrong one can mean an avoidable decline on your file.
Should I wait for the issue to drop off before remortgaging?
It depends on the cost of waiting. If you are about to roll onto an expensive standard variable rate, the saving from acting now can outweigh the better terms you would get later. If your deal has time left, letting a default age can widen your options. A broker can model both timelines so the choice rests on the numbers rather than on guesswork.
Summary
A homeowner with bad credit can usually remortgage, because equity does much of the reassuring a clean file would. Specialist lenders weigh the type, age and severity of a default, CCJ or missed payments against your equity and affordability now. Where your credit has worsened since you bought, a product transfer may beat a remortgage by avoiding a fresh check. Present the recovery clearly, lead with your equity, and a bad-credit remortgage is often very doable.
Updated: 20 June 2026
Written by Ben Stephenson, CeMAP-qualified Mortgage Broker.
Manor Mortgages Direct is FCA authorised, FRN 496907, has traded for 25 years, is highly positively reviewed, 4.9 rated on Google, and has helped thousands secure the right mortgage. Bristol-based mortgage brokers, assisting clients nationwide.
Sources
GOV.UK, County Court Judgments (CCJs) for debt, https://www.gov.uk/county-court-judgments-ccj-for-debt, accessed 20 June 2026
MoneyHelper, Remortgaging explained, https://www.moneyhelper.org.uk/en/homes/buying-a-home/remortgaging-explained, accessed 20 June 2026
Hero photo: A typical view of suburban Sheffield, England, by Andrew Tryon, via Geograph / Wikimedia Commons, licensed CC BY-SA 2.0
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