Money Advice, Debt Advice & Debt Help
Mortgage after Bankruptcy

Mortgage after Bankruptcy

Mortgage after Bankruptcy Getting a mortgage after Bankruptcy is possible. This is the case whether you want to buy a new property or remortgage your current home.

Included in this article:


Discharged from Bankruptcy and want to get a mortgage? Give us a call (0800 077 6180) or complete the form below.

Can you get a Mortgage after Bankruptcy?

You may be surprised to learn that once you are discharged from Bankruptcy it is possible to get a Mortgage. Having said that initially it is likely you will need to borrow from a specialist lender.

If it is less than 6 years since you went bankrupt your credit rating may still be poor. In these circumstances high street lenders are unlikely to want to help. However an adverse lender will consider you.

Even after the record of bankruptcy has come off your credit file high street lenders may still be reluctant to lend to you. They will find out you were previously bankrupt by asking a specific question on their application form.

You must be honest in any mortgage application you make. Even if the record has come off your credit file a lender can find out about your bankruptcy by checking the London Gazette.

Struggling to get your head round all of this? We can help. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.

How much will you be able to borrow?

The amount you will be able to borrow really depends on how long it is since you went bankrupt. The longer ago that was the smaller deposit you will need and the larger mortgage you will potentially be able to get.

If it is less than 2 years since your bankruptcy start date you will require a deposit of at least 45% of the value of the property. Where the start date was 3-6 years ago this falls to 25%. If it was 6 years ago plus then only 5% may be required.

The other factor which influences the amount you can borrow is the amount you earn. Generally speaking adverse lenders will not be prepared to lend more than 4 times your gross annual income.

If you included a mortgage shortfall in your bankruptcy after a previous property was repossessed it is unlikely any lender will consider you until at least 6 years from the start date.

Using a specialist Mortgage Broker

Because you are likely to be turned down by the high street mortgage lenders you should get advice from a specialist mortgage broker.

A specialist broker has knowledge of and access to the different adverse lenders available who may lend to you. They will be able to understand your circumstances and match a lender which is most likely to offer you a mortgage.

It is important to understand that using a specialist broker will mean that you have to pay a broker fee. Generally this will be between £800 – £1500 payable once the mortgage is approved.

The Cost of getting a Mortgage after Bankruptcy

Adverse lenders charge a higher rate of interest compared to rates which may be offered by high street lenders. This is because you are perceived to be a higher risk customer.

However as with the deposit the longer you wait before applying the better the deal you can expect to get. Three years from the date of your bankruptcy the rates are likely to be between 6%-7%. However after 6 years these can fall.

You will not have to remain on an adverse interest rate for ever. Generally speaking you would keep the mortgage for a period of 2-3 years. After that options open up for remortgaging with a cheaper high street lender.

Looking to get a mortgage after bankruptcy? Call us (0800 077 6180) or complete the form below. The advice is free and confidential.

Arrange a call with a Bankruptcy Expert

    Need help with the bankruptcy process?

    Privacy Policy
    Your information will be held in strictest confidence and used to contact you by our internal team only. We will never share your details with any third party without your permission.

    4 thoughts on “Mortgage after Bankruptcy

    1. GailK says:

      Hi. I would like to borrow more money on my mortgage and they have asked me if I have ever been bankrupt, do I have to disclose this even though I am discharged?

      1. James Falla says:

        Hi Gail

        The answer is yes, you must disclose the fact that you have been bankrupt in the past. If you don’t and the lender finds out later, they could withdraw the mortgage causing you all kinds of problems.

        Generally speaking, mortgage lenders will be reluctant to work with you until the record of your bankruptcy has come off your credit file. This happens automatically 6 years from the start date. Even then some lenders may still have a problem.

        If your current lender can’t help or you need further advice about where to go to remortgage your property, please give us a call (0800 077 6180). The advice is free and without obligation.

    2. Edward C says:

      Hi. I went bankrupt in 2014 and this record is now off my credit file. However I also got a bankrutcy restiction undertaking in Nov 16. I have tried to get a mortgage but can’t because the record of the BRU is still on my file. I thought i was clear now and could apply for a mortgage?

      1. James Falla says:

        Hi Edward

        My understanding is that if you get a BRU, a separate record of this is added to your credit file. This record will remain for 6 years and will cause difficulties with getting a mortgage until it comes off.

        Normally this does not cause much of an issue because the official receiver applies the BRU within a few months of you going bankrupt. As such the record comes off pretty much the same time as that of the bankruptcy itself. However in your case, the 2 year delay in getting the BRU has meant a 2 year delay in your credit file becoming clear.

        There is nothing you can do other than wait until November 22 when the record of the BRU will drop off your file. Given you are using a specialist broker, your mortgage options should open up then. If you are still having problems at that time, give us a call. We will be able to suggest a broker who can assist.

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    Learn how your comment data is processed.