Can You Get a Mortgage with a Default? What Lenders Look For

Yes, it is possible to get a mortgage with a default, but it depends on factors such as how recent the default is, whether it has been settled, and your current financial position.

Many people assume a default means automatic rejection or that they need to wait six years before applying. In reality, lenders assess each case individually, and many borrowers with defaults successfully secure mortgages.

What Is a Default on Your Credit File?

A default is recorded when a lender believes an account has broken down, usually after several missed payments.

Defaults can come from:

• Credit cards
• Personal loans
• Utility bills
• Mobile phone contracts

Once registered, a default typically stays on your credit file for six years from the default date, whether it has been settled or not.

Can You Get a Mortgage with a Default?

In many cases, yes. A default does not automatically stop you from getting a mortgage.

Lenders look at the full picture, including:

• How recent the default is
• Whether it has been settled
• The size of the default
• Your financial behaviour since the default

Many borrowers with defaults go on to secure mortgages, particularly where there has been clear improvement over time.

How Do Lenders Assess Defaults?

Lenders typically focus on four key areas.

How Recent Is the Default?

Recency is one of the most important factors.

• Defaults within the last 12 months are assessed more cautiously
• Defaults over 12–24 months old are viewed more favourably
• Older defaults usually have less impact

As time passes, more options typically become available.

Has the Default Been Settled?

A settled default is generally viewed more positively than an outstanding one.

While settling a default does not remove it from your credit file, it shows:

• The issue has been resolved
• There is no ongoing debt attached
• Improved financial responsibility

How Many Defaults Are There?

An isolated default is very different from a pattern of credit issues.

Lenders will consider whether:

• The default was a one-off event
• There are multiple defaults
• There is a pattern of missed payments

What Has Happened Since the Default?

Your recent financial behaviour is crucial.

Lenders want to see:

• Payments made on time since the default
• Stable income and finances
• Reduced reliance on credit

Strong recent conduct can significantly improve your chances.

What Do Lenders Typically Accept?

While criteria varies, many lenders will consider applications where:

• A default is over 12 months old
• The default has been settled
• The amount is relatively small
• There have been no recent missed payments

Some specialist lenders may consider more recent or complex cases, particularly where there are positive factors such as a strong deposit or stable income.

If you’re exploring your options, our bad credit mortgages guide explains how lenders assess applications in more detail.

When Is It Harder to Get a Mortgage with a Default?

Some situations are more challenging, including:

• Defaults registered within the last 3–6 months
• Multiple recent defaults
• Large unpaid defaults
• Ongoing missed payments or financial instability

In these cases, options may be more limited, but it does not always mean it is impossible.

How Long After a Default Can You Get a Mortgage?

There is no fixed rule, but typical patterns include:

• Recent defaults: Fewer options, often specialist lenders
• Older defaults: More lenders may be available
• Defaults nearing six years: Wider choice and potentially better terms

Lenders often place more weight on how you have managed your finances since the default rather than the default itself.

What Deposit Do You Need with a Default?

Deposit size can make a significant difference.

• 5–10% may be possible for small, older defaults
• 15% or more may be required for recent or larger defaults

A larger deposit reduces lender risk and can improve your chances of approval.

Does the Type of Default Matter?

Yes, lenders consider the type of default as well as the amount.

• Utility or mobile phone defaults may be viewed more leniently
• Unsecured credit defaults may carry more weight
• Mortgage-related defaults are usually assessed more strictly

The context behind the default is often just as important as the figures.

Example Scenarios

To give some context, here are a few common situations:

• One small settled default from several years ago: Often manageable with a wider range of lenders
• Multiple recent defaults: More limited options, typically specialist lenders
• Older default with strong income and deposit: Generally a stronger overall case

Can You Get a Mortgage with a Default and Other Credit Issues?

Possibly, but options may be narrower.

If you also have:

• Missed payments
• CCJs
• Past debt solutions

Lenders will assess the full credit profile rather than looking at the default in isolation.

Common Myths About Defaults and Mortgages

“You must wait six years.”
Not always. Many lenders consider applications much sooner.

“A default means automatic rejection.”
Incorrect. Lenders assess the full situation.

“Only high street banks offer mortgages.”
Specialist lenders exist specifically for more complex cases.

How to Improve Your Chances of Getting a Mortgage with a Default

• Keep all payments up to date going forward
• Settle outstanding defaults where possible
• Reduce credit card balances where you can
• Avoid applying for new credit before a mortgage application
• Save a larger deposit if possible
• Keep bank statements stable and consistent

Preparation can make a significant difference to how lenders assess your application.

How Mortgage Bridge Can Help

Understanding how lenders assess defaults can be complex.

At Mortgage Bridge, the brokers that we work with will:

• Review your credit profile in detail
• Explain how lenders are likely to view your situation
• Identify lenders suited to your circumstances
• Help you prepare before making an application

Their role is to help you understand what may be possible and connect you with the right next step.

FAQs

Can I get a mortgage with a recent default?

It may be possible, but options are typically more limited and may involve specialist lenders.

Do I need to settle a default before applying?

Not always, but settled defaults are generally viewed more positively.

How much deposit do I need?

This varies, but larger deposits can improve your chances and increase lender options.

Will all lenders reject me?

No. Different lenders have different criteria, and some specialise in cases involving defaults.

Key Takeaways

• You can often get a mortgage with a default
• Recency, size, and whether it is settled all matter
• Recent financial behaviour is a key factor
• Deposit size can significantly affect your options
• Some lenders specialise in more complex cases

Summary

Having a default on your credit file does not mean getting a mortgage is out of reach. Lenders assess the full picture, including how long ago the default occurred, whether it has been settled, and how your finances have been managed since.

With the right preparation and a clear understanding of how lenders assess risk, many borrowers with defaults successfully secure mortgages.

This guide provides general information only. Personalised recommendations should always be obtained from a regulated mortgage advisor.

Related Bad Credit Mortgage Guides

• Bad credit mortgage options
• Mortgage with defaults
• Mortgage with CCJs
• Missed payments and mortgage approval
• Mortgage with a Debt Management Plan
• Mortgage with a Bankruptcy