Can You Get a Buy-to-Let Mortgage with Bad Credit?
If you’ve had credit issues in the past, you might assume that a buy-to-let mortgage is out of reach. The truth is, it’s still very possible — even with bad credit.
Lenders assess buy-to-let applications differently from residential ones, and there are specialist lenders who are far more flexible with applicants who’ve experienced financial difficulties.
At Mortgage Bridge, we regularly help landlords and first-time investors secure buy-to-let mortgages with bad credit — whether that’s missed payments, defaults, or even a past IVA.
Here’s how it works and what you can do to improve your chances.
What Is a Buy-to-Let Mortgage?
A buy-to-let mortgage is a loan used to purchase a property you plan to rent out to tenants, rather than live in yourself.
The key differences from a residential mortgage are:
- Lenders assess rental income instead of (or as well as) personal income.
- You’ll typically need a larger deposit — often 20–25%.
- Interest rates can be slightly higher than standard residential deals.
Buy-to-let mortgages can be a smart investment — but lenders will want to be confident that the rent covers the mortgage payments comfortably.
Can You Get a Buy-to-Let Mortgage with Bad Credit?
Yes — it’s entirely possible.
Having bad credit doesn’t automatically disqualify you from getting a buy-to-let mortgage, but it can affect:
- Which lenders you qualify with
- Your available interest rates
- The deposit you’ll need
The good news is, there are lenders who take a case-by-case approach, especially if your financial issues are in the past or you have strong rental potential.
💡 We regularly help clients with defaults, CCJs, and historic arrears secure buy-to-let finance with the right lender match.
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What Types of Bad Credit Will Lenders Consider?
Different lenders have different levels of flexibility, but many will still consider your application if you have:
- Late or missed payments
- Defaults (especially if satisfied)
- County Court Judgments (CCJs)
- Debt Management Plans (DMPs)
- Individual Voluntary Arrangements (IVAs)
- Past bankruptcy or repossession (if discharged and settled)
The impact depends largely on how recent and how severe the issues are.
Typically:
- Over 3 years old: Often acceptable with minimal impact.
- 1–3 years old: May still be fine, but you’ll likely need a larger deposit.
- Within the past 12 months: Possible with specialist lenders and strong rental income.
How Do Lenders Assess Buy-to-Let Applications with Bad Credit?
When assessing your application, lenders will look at more than just your credit history. They’ll also consider:
1. Rental Income Coverage
Most lenders use a calculation called Interest Coverage Ratio (ICR) — typically requiring rental income to be at least 125–145% of the monthly mortgage payment.
For example:
If your mortgage costs £800 per month, the rent should be around £1,000–£1,160 or more.
2. Deposit Size
The bigger your deposit, the lower the risk to the lender.
- Standard buy-to-let deposit: 25%
- With bad credit: 25–40%, depending on your history
💡 Even with bad credit, lenders often view a large deposit and strong rental potential as key positives.
3. Property Type and Location
Lenders prefer standard, easily sellable properties in established rental areas. Unusual property types (like studio flats or ex-local authority buildings) can be more restrictive.
4. Landlord Experience
If you already own rental property or have managed one before, lenders are often more comfortable — especially if your past credit issues are older.
First-time landlords are still eligible, but the criteria can be slightly tighter.
5. Personal Income and Employment
Even though rental income is the main focus, lenders like to see stable personal income as a safety buffer.
If you’re self-employed, you’ll usually need one or two years of accounts or SA302s and tax year overviews.
What Deposit Do You Need for a Buy-to-Let Mortgage with Bad Credit?
Your deposit requirement will depend on your credit profile:
| Credit Situation | Typical Deposit |
|---|---|
| Mild bad credit (late payments, small defaults) | 20–25% |
| Moderate issues (satisfied defaults, CCJs 1–3 years old) | 25–35% |
| Severe or recent credit issues (IVA, bankruptcy) | 35–40% |
💡 The stronger your rental yield and affordability, the more flexibility you’ll have on deposit size and rates.
How to Improve Your Chances of Getting Approved
Even with bad credit, there are clear steps you can take to strengthen your application.
1. Check Your Credit File
Use Checkmyfile to review your report across all four major agencies (Experian, Equifax, TransUnion, Crediva).
- Make sure old debts show as “satisfied.”
- Correct any inaccuracies.
- Avoid new credit applications before applying.
2. Demonstrate Good Account Conduct
Keep your bank accounts stable — no overdrafts, missed payments, or returned direct debits in the months before applying.
3. Provide a Strong Rental Projection
Use a local letting agent or property valuation to show your expected rental income.
This helps prove your affordability and the viability of your investment.
4. Work with a Specialist Broker
Many high-street lenders automatically reject applications involving bad credit.
A broker like Mortgage Bridge can:
- Identify specialist lenders who accept applicants with adverse credit
- Present your case clearly to highlight strengths
- Save you time, stress, and unnecessary credit checks
💡 We’ve built long-term relationships with lenders who consider each case individually, not just by score.
Can You Remortgage a Buy-to-Let Property with Bad Credit?
Yes — you can remortgage even if you’ve had credit issues since taking out your first buy-to-let.
Reasons to remortgage include:
- Moving onto a lower rate
- Releasing equity for another investment
- Consolidating other borrowing
If your credit has improved, you may even qualify for a better rate than your original deal.
💡 We cover this further in our guide “Can You Remortgage with Bad Credit?”
Real Example: Approved After Defaults
One client came to us with two satisfied defaults from three years ago and wanted to purchase a small rental flat.
We matched them with a specialist lender who accepted historic credit issues, using a 30% deposit and strong projected rental yield.
Their buy-to-let mortgage was approved within three weeks — proving that bad credit doesn’t have to hold you back.
How Mortgage Bridge Can Help
At Mortgage Bridge, we specialise in helping landlords and investors — including those with bad credit histories — secure buy-to-let mortgages tailored to their circumstances.
We can:
- Review your credit file and provide clear, realistic guidance
- Match you with flexible lenders who understand complex cases
- Prepare your application and manage the process end-to-end
- Help you plan for future remortgaging or portfolio expansion
Your credit history might not be perfect — but with the right advice and approach, your mortgage still can be.
Let’s explore your options together.
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