See how we can help

Get started online

Mortgage after bankruptcy

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 8, 2023

Can you get a mortgage after bankruptcy?

If you have a bankruptcy anywhere in your credit history, it is unlikely that you’ll qualify for a conventional mortgage deal. Most high street providers won’t even consider a mortgage application from someone declared bankrupt.

Getting a mortgage after bankruptcy is an uphill endeavour, but it is not impossible. There are plenty of specialist lender options with high-risk appetites and even higher lending appetites who would be willing to review your application and help you secure a mortgage approval following a bankruptcy discharge.

Is it possible to get a mortgage after bankruptcy? How long should you wait before you apply? This guide explores the answers to these questions and more. Read on.

Use our online mortgage calculator as a guide for your monthly repayments now:

We are expert mortgage brokers

We have access to over 200 lenders in the UK to get you the best rates

Get your Quote


Can you get a mortgage after bankruptcy?

It is possible, but it’s not going to be easy. If you’ve been declared bankrupt at one point in your life, high street lenders won’t touch you with a 10-foot pole. Most mortgage providers are generally reluctant to risk lending to someone with a bankruptcy in their credit past.

Only a very small pool of lenders would be open to discussing possible options to get the funding you need. If they approve your mortgage application, you’ll need to meet very specific criteria, most of which are designed to lower their risk exposure.

For instance, they may require you to put down a larger deposit amount than borrowers with a good credit rating. You may even have to contend with paying a slightly higher interest mortgage rate to cover the risk they’re taking on by lending to someone with a bankruptcy in their history.

On the plus side, if you keep up with the repayments and display good financial conduct in the first six or seven years of your mortgage, the lender may be open to reviewing your interest rates.

A speciality bad credit lender is your best bet at getting a mortgage if you dream of owning your own home one day.

Get started online


How long should you wait before applying?

There is no standard waiting period. It varies by lender. They all have in common that they will not approve you for a mortgage until you have been discharged. The discharge process usually lasts 12 months from the date you were declared bankrupt.

The bankruptcy will show up on your credit report for six years from the date it was initially registered.

Most lenders will insist that you wait at least three years from the discharge date before submitting a mortgage application. Others insist on six years. On the opposite end of the spectrum are bad credit mortgage providers who can consider applications submitted to them within as little as one year after discharge.

Below is a summary of the mortgage prospects available to borrowers who’ve been declared bankrupt based on the post-discharge waiting time.

  • One year post-discharge: You can apply for a mortgage, but you’ll be restricted to a smaller pool of specialist lender options with higher deposit requirements, interest rates, and fees.
  • 2-3 years post-discharge: You’ll have access to a larger pool of mortgage lenders with reasonable deposit requirements, interest rates, and fees. Very few of them will be high street lenders, though.
  • 4-6 years post-discharge: You’ll have an even wider pool of lenders to choose from. You’ll access competitive mortgage deals with flexible terms, deposit requirements, and interest rates.

The longer you wait, the better your chances of securing a mortgage after bankruptcy. You can use that time to rebuild your credit rating.

Regardless of the waiting period, you still have to demonstrate good financial management. Remember, the idea is to build lenders’ confidence in you. Having a bankruptcy filing in your credit history is bad enough. If you rack up more credit issues after your bankruptcy discharge, no mortgage lender will be willing to risk their capital by granting you a mortgage loan.

Get started online


What are the requirements for getting a mortgage after bankruptcy?

Borrowers who’ve had a bankruptcy in their credit history are usually subject to a stricter set of requirements. They must meet these criteria before lenders can consider them for a loan.

Most of them are the same overarching requirements standard borrowers with a good credit file also have to meet. Others are specific to formerly bankrupt applicants who pose a higher risk to lenders. Below are some notable ones.

  • Affordability: An affordability assessment is how lenders determine the amount of money you can borrow. Most providers use a standard multiplier of 4-4.5x the borrower’s annual income. Individuals who’ve been declared bankrupt may be subject to lower multipliers.
  • Minimum deposit: Standard mortgage loan applicants with no adverse credit issues in their history generally have a 5-10% deposit requirement. Individuals who’ve been bankrupt may be required to put down a higher down payment which could be anywhere from 25-30%, depending on how long ago the applicant was discharged.
  • Bankruptcy reasons: If you have a bankruptcy in your credit history, most lenders will want to get into the specifics surrounding it. They’ll want to review records and evidence to get a high-level view of how you became bankrupt in the first place.
  • Bankruptcy duration: Very few lenders would be open to accepting a mortgage application immediately after bankruptcy discharge. Specialty lenders will insist that you wait at least a year post-discharge before applying for a mortgage after bankruptcy. The length of time a borrower would have to wait before applying varies by the mortgage lender and could be anywhere from 1-6 years.
  • Employment status: With bankruptcy in your past, most lenders will place tighter restrictions around your current employment. Most will require you to prove at least 12-18 months of continuous employment before they can consider your mortgage application.
  • Debt history: Some lenders may require you to show that you have no lingering debt related to the bankruptcy. They may also want to look into your current finances to see whether your financial habits have improved. Some of the issues they’ll keep an eye out for include missed or late repayments on loans or credit cards, mortgage defaults, loan arrears, etc.

Get started online


How can you fix your credit after bankruptcy?

The best thing you can do for your financial well-being is to work on rebuilding your damaged credit after bankruptcy. The best time to do this is during the post-discharge period as you wait to become eligible for a mortgage. Here are a few things you can do to help things along:

  • Don’t be late on any repayments you may have, including utility bills, credit cards, or retail accounts
  • Minimize your credit utilization ratio as much as possible
  • Steer clear of bank overdrafts you had not planned for
  • Register as a voter on the Electoral Roll

Download your credit report from the main credit reference agencies – Experian, TransUnion, and Equifax – and see what information they have on you. If there are accounts you have since satisfied but still appear as open, reach out to the respective agencies, and request them to update your information.

If you spot any errors, let them know so they can rectify them. Your credit report should be a true representation of your current financial standing.

Do you qualify for a buy-to-let mortgage after bankruptcy?

Buy-to-let mortgages come with stricter loan-to-value requirements and larger deposits than run-of-the-mill residential mortgages. Lenders open to granting a mortgage to someone bankrupt in the past have a mandatory three-year post-discharge waiting period before considering a BTL mortgage application.

If three years seem too long to wait, a few speciality bad credit mortgage providers would be willing to discuss the possibility of granting you a mortgage. You would have to present a strong business case for it, though.

Get started online


Get expert help from a bad credit broker.

Getting a mortgage after bankruptcy isn’t easy, but you can still get one if you know where to look. Bad credit lenders are your best bet to get the financing you need to put you on the trajectory towards homeownership.

An expert bad credit mortgage broker understands the nuances of the mortgage process to help applicants with a bankruptcy in their credit history secure a competitive mortgage deal.

Our broker-matching service will put you in touch with these professionals to connect you to a lender that will likely approve your property loan application.


Where can I get a mortgage after bankruptcy?

Not many lenders are open to granting mortgages to individuals with a bankruptcy in their past. The providers that would be willing have a strict set of requirements applicants must meet, among which is a mandatory post-discharge waiting period before they can even consider a mortgage application. Depending on the lender, this period can be between 1 and 6 years.

The longer you wait, the larger the pool of lenders that would be willing to grant a quick mortgage approval. If you need it sooner (say, 1-2 years post-discharge), you will need to go through an expert bad credit broker. They can help you secure a mortgage from a specialist lender that will likely approve your application despite your adverse credit history.

Will my home be repossessed if I become bankrupt?

Not necessarily. Some lenders repossess properties if the mortgage is in default as part of the bankruptcy proceedings. However, your home will not be repossessed if you sell a portion of it, you’re in negative equity, or you’re living there with other family members. Even if you declare bankruptcy, you must keep up with the mortgage repayments.

Can I use the equity in my home to repay bankruptcy debt?

If you own your home, it would be prudent to release some of the equity and channel those funds towards paying off your debt. Unsecured debt cannot be attached to your home, but the official receiver may want to sell it to offset a portion of your bankruptcy debts.

Get started online