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If you’ve been through the stress of bankruptcy, you might feel as though owning a home is impossible for you. But we’re here to reassure you that this is rarely the case.
At Echo, we speak to people every day who feel anxious about their home ownership prospects due to past financial blips.
However, the truth is, obtaining a mortgage after bankruptcy is entirely possible. Getting a post-bankruptcy mortgage is about proving to lenders that you’re ready for a fresh start, and we’re here to help you do just that.
In this guide, we’ll explain how to get a mortgage after bankruptcy, including what deposit you might need, and which lenders could help. Plus, you’ll learn how our specialist team can provide judgment-free advice and help you to explore your full range of options.
Can you get a mortgage with a history of bankruptcy?
It’s ok, breathe, because yes, you absolutely can.
Timing is everything, so it depends on how long your bankruptcy has been officially discharged for. However, once your bankruptcy has been discharged for as little as 12 months, some specialist lenders will consider your application. Although this depends on your broader financial circumstances, such as your current income. Then, the further past your bankruptcy discharge date you are, the more lenders will become available to you.
Lenders will want to see that you are actively rebuilding your financial profile, so maintaining a strong credit record with on-time payments on any post bankruptcy debts is also important.
Can you get a mortgage while bankrupt?
Unfortunately, it’s very unlikely that you’d be able to get a mortgage if you are currently going through bankruptcy. Regardless of mortgage lender criteria, you cannot legally borrow more than £500 without declaring your status, meaning a mortgage wouldn’t be possible.
However, if your bankruptcy is close to being discharged, it’s certainly worth reaching out for a chat about how we can help you sooner.
Check if you're elligible for a post-bankruptcy mortgage
How long after bankruptcy you can get a mortgage
The more time that has passed since you were discharged, the easier it becomes to secure finance, as a greater number of lenders will open their doors to you.
The table below outlines how many lenders typically consider applications at each stage after discharge:
The post-bankruptcy timeline
Time Since Discharge | Number of Lenders Available | How Lenders View Your Application |
1 to 3 Years | Around 5 Specialist Lenders | Getting a mortgage is possible, but the pool of lenders is small. You will rely entirely on highly specialist adverse-credit lenders who use human underwriters to review your case individually |
3 to 6 Years | 20+ Lenders | A huge turning point. Because you have proven your ability to manage your finances post-bankruptcy, many more doors open. You will have a much wider choice of lenders and much more competitive interest rates |
6+ Years | 70+ Lenders | A true clean slate. At six years, the bankruptcy drops off your credit file completely. You will generally have access to standard high-street banks and may be able to access the lowest deposit requirements available on the market |
Is a huge deposit needed to get a mortgage after bankruptcy?
Not necessarily. One of the most common worries for post-bankruptcy customers is that an impossible amount of deposit will be required to be considered for a mortgage. The good news is, while you’re unlikely to have immediate access to deposit-free or 5% deposit mortgages, the longer it’s been since your discharge date, the smaller the deposit you will need.
If you were discharged very recently, lenders typically ask for around 25% to 30%. However, once you reach 3 or 4 years past discharge, many building societies and specialist lenders will happily accept a deposit of just 10% to 15%.
Bankruptcy mortgage rates
It's true, a home loan after a financial setback, such as bankruptcy, will generally have higher rates at the outset, than the standard high street mortgage.
However, we always encourage our clients to look at the bigger picture, as you don’t have to be stuck on a higher rate forever. After successfully repaying an adverse credit mortgage on a short fixed-rate deal, you are actively repairing your credit file.
This means that by the time you’re looking to remortgage, you’ll be in a significantly stronger position and we can help you remortgage onto a much more competitive interest rate.
Our expert says:
"Please don't let the fear of higher initial interest rates stop you from exploring your options. We always tell our clients to view their first post-bankruptcy mortgage as a stepping stone rather than a forever commitment. It gets you back onto the property ladder and acts as the ultimate credit-repair tool.
Within just a couple of years of timely payments, we can usually help you remortgage onto a much better rate as your financial past fades into the background."
Neil Mulhearn Discharged bankruptcy mortgage lenders
When it comes to mortgages and bankruptcy, standard high-street banks usually generate an automatic no. Most are unlikely to be able to help until your bankruptcy has fallen off your credit report, which won’t happen until 6 years after it was declared.
Fortunately, we have direct access to specialist mortgage lenders that use human underwriters to look at the finer details of your credit woes. Whether it was a dissolved business, a divorce, or unexpected illness, they are more understanding of the reason you ended up in financial difficulty.
What they focus on is your ability to comfortably afford the monthly repayments today, and how responsibly you have managed your money post bankruptcy.
Here are some of the specialist lenders who will look past a more recent bankruptcy discharge:
Specialist Lender | Minimum Time Since Discharge | Typical Deposit Required | Key Lending Criteria & Approach |
Together | 12 Months | 25% – 30% | One of the few lenders who will consider you just one year after discharge. They take a very flexible, common-sense approach, but you will need a larger deposit to offset their risk |
Aldermore | 3 Years | 15% – 20% | Fantastic for complex credit histories. They completely ignore automated credit scores and rely on their human underwriting team to listen to the reasons behind your past financial difficulties |
Kensington Mortgages | 3 Years | 15% | Kensington is incredibly understanding of past bankruptcies. Their main requirement is simply seeing a flawless track record of you paying your bills on time since your discharge date |
Precise Mortgages | 3 to 4 Years | 15% | Highly experienced in adverse credit and a great option if you have rebuilt your life by becoming self-employed. They offer very clear, tiered criteria for post-bankruptcy applicants |
The Mortgage Lender (TML) | 3 to 4 Years | 10% – 15% | TML uses a tiered system based on the exact age of your credit issues. As long as you haven't missed any new payments recently, they are very open to helping you secure a home |
High Street Banks (e.g., Halifax, Barclays) | 6+ Years | 5% – 10% | Once the bankruptcy falls off your credit file after six years, the high street welcomes you back. You will have access to standard rates, provided your recent credit conduct is clean |
Please note: Lending criteria changes constantly, and the specific deposit you will need depends on your current income and credit behaviour since your discharge.
How to get a mortgage after bankruptcy
If you have been discharged from your bankruptcy and are ready to start looking for a home, here is the best way to prepare your application:
- Rebuild Your credit: Get a credit-builder credit card, use it for small purchases (like groceries), and pay it off in full every single month. Make sure you are registered on the electoral roll and contact credit agencies to remove any past ties, for example, romantic or business partners that you were once financially linked to
- Obtain proof of discharge: Specialist lenders will want to see a Discharge Certificate, as well as your last three to six months of bank statements, and your latest payslips or alternative proof of income
- Avoid high street banks: Do not apply directly to a mainstream bank if you’re less than 6 years post-discharge. An automatic rejection will result in a hard search on your credit file, which can further impact your credit score
- Speak to an expert: Getting a mortgage after bankruptcy ultimately comes down to finding the right lender for your circumstances. That is exactly what brokers like ourselves can do for you
Get post-bankruptcy mortgage advice
At Echo Finance, we understand that personal finance is not a straightforward, black and white subject. We don’t judge customers with credit issues in their past, because we know that they can impact anyone at any time.
We specialise in helping people find mortgages after bankruptcy, especially those who have been turned down elsewhere.
We know exactly which lenders are sympathetic to your situation and which ones to avoid, and will take the time to listen to your story so that we can present it in the best light to lenders.
Ready to take that first step toward your new home? Let’s look at your options together. Speak to a bankruptcy mortgage expert today. There's no judgment here, and our initial chats are completely free.
FAQs
Bankruptcy is a legal process that provides debt relief for people who are unable to pay their creditors. Once you're declared bankrupt, an official receiver is appointed to manage your finances and property.
Bankruptcy means that you will be relieved of paying most of your debts, but it will have an impact on your credit rating, which can make it difficult to obtain further credit in the future.
However, there are specialist lenders who can help you, so don’t lose hope. reach out to our friendly team by clicking the link above.
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