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Key partner of the Legal and General Mortgage Club logo

Commercial Trust is a member of the Legal & General Mortgage Club.

We chose to work with Legal & General as they are the largest, longest-running club in the UK.

This gives our clients the confidence that their borrowing is with a lender selected by an established and trusted club, who are involved in nearly one in three mortgages processed by intermediaries like us.

Can I get a buy to let mortgage with bad credit?

You may be able to get a buy to let mortgage with "bad credit". “Bad credit” means different things to different people, and some buy to let lenders are set up specifically to help you, if you have had adverse credit issues.

Chat to our advisors, we help people like you all the time. We are friendly and non-judgemental, so give us all the details (big or small) and we can help you get a mortgage now, or tell you what you to do to get one in the future.

Many clients like you have secured a buy to let mortgage with our help, because we are specialists, with access to lenders able to help clients with adverse credit.

Factors that may impact you getting a buy to let mortgage with bad credit

  • The severity of the credit issue
  • How recently you had a credit issue

If you have questions, chat to our advisors on live chat, via the phone, or get a call-back we're here to help.

Today's buy to let mortgage rates

To compare today’s buy to let mortgage rates, click through to our buy to let mortgage calculator.

Eligibility for a bad credit buy to let mortgage

  • First time buyers to experienced landlords
  • You must be over 18 years old
  • Minimum deposit 15% of the property value
  • Upper age limits at application are flexible
  • Low personal incomes are accepted
  • Property, pension and employment income is OK
  • Ready to get started?

    Request a call-back from our expert advisors

How to get a buy to let mortgage with bad credit

There are lenders in the marketplace who are specifically set up to help investors get a buy to let mortgage with bad credit issues.

If you are affected it really helps to work with a specialist broker. Not all lenders can help borrowers with a poor credit history. Applying without knowing if you are likely to be accepted can be frustrating and incur costs.

As a specialist broker, with access to lenders from across the market, we are familiar with adverse credit lender criteria. We know where to start looking to find possible solutions, based on the type of credit issues you are managing.

Similarly, if you are not a current match for adverse credit buy to let lenders, we can to help you roadmap a path to being able to borrow and outline what you need to do to get there.

Check your credit profile thoroughly

It can be easy to overlook blips on your credit profile, by underestimating the importance of all aspects of your finances. There are some examples below, of credit you may accidentally overlook. These issues won’t stop you getting a mortgage, but we do need to know about them:

  • Maybe you missed a payment for £5 on a store card – it doesn’t matter does it? Wrong. No matter how small the sum, a missed payment on a store card is a yes/no position on your credit report.
  • Did you change a bank account, forget to set up a direct debit, and miss a bill payment? Tell us about this. Although you have settled the amount, the missed payment will still show on a credit report, so we need to know.
  • Have you bought a sofa or white good with a promotion, e.g. ‘buy now with nothing to pay for six months’? This is a credit arrangement. We need to know about these.
  • Do you have an account with a shop or store, where you have a payment plan to pay for goods? Did you reduce the amount and increase the number of payments? This affects your credit profile.

Don’t make this common mistake!

If you suspect you have issues with your credit that you think may impact getting a mortgage, don’t hold back in telling your mortgage advisor all the details.

Some people feel uncomfortable discussing financial issues with our advisors, or feel they should not have to share such personal information, but this can stop us being able to do our job. Or it can result in an application being made, which gets turned down unnecessarily.

To reassure you, if you have debt challenges:

  1. We need to know because not all lenders can help where credit issues arise
  2. This is a common issue that our advisors have dealt with on multiple occasions
  3. We will not judge you, we just want to help
  4. Your information is dealt with in complete confidence
  5. Credit issues don’t always mean you cannot get a mortgage

The biggest barrier to us being able to get you a mortgage is for you not tell us all the details of your credit profile. Ultimately, any issues will come to light when the lender conducts a credit search on you, which happens as standard on every buy to let mortgage application.

Not telling us everything wastes time and could cost you money, for example, if a valuation has been undertaken by the lender that you will be charged for. We don’t want this to happen, and remember, not all credit issues stop us getting clients a mortgage.

Buy to let mortgage interest rates for adverse credit applicants

When it comes to applying for a buy to let mortgage with bad credit, the risk to the lender is higher and as a result, you are more likely to face higher mortgage interest rates than if this wasn't the case.

However, showing you can keep up with payments on a mortgage is a positive step. It will help 'rebuild' your credit profile.

With time, you may be able to change your mortgage product to a more favourable interest rate. A mortgage broker will be able to guide you on the timeframe necessary to rebuild your credit profile.

Using a buy to let mortgage to pay off other debts

If you have borrowed money using a number of different methods, you may find that the interest rate for repaying those debts is higher than the interest rate on a buy to let mortgage. For this reason, some people choose to pay off debts with a buy to let mortgage.

The most important thing to emphasise is that you should:

Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt.

This means that, the monthly payments you make on a mortgage may be cheaper and therefore more manageable for you. But, when you increase the period over which you repay a debt, the total amount you end up repaying might (or might not) be more than the total amount you would have paid, if you had not added the debt(s) to your mortgage.

It is important you work out if cheaper monthly payments are more beneficial to you than reducing your overall debt, if you can’t achieve both.

If you have any questions about the above explanation, do ask an advisor to explain it further and they will be happy to help.

We work with a range of over 80 UK buy to let mortgage lenders, including:

Why choose Commercial Trust?

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Apply with ease by phone

It couldn't be easier to secure a buy to let mortgage with our expert advisors. Ask all your questions and arrange an application on the phone from your sofa.

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World class customer service

We'll find you a great deal and take all the admin work off your shoulders, so you can relax while we get your mortgage completed. All the while giving you progress updates.

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Lender decision in 2 hours

By contacting you by phone and email you can get help more quickly than in-person services. It's possible to get you a lender decision in principle in as little as two hours after our call.

We can help you with...

  • Getting a mortgage with utilities arrears (e.g. mobile phone, electric, gas)
  • Getting a mortgage with unsatisfied arrears
  • Getting a mortgage with multiple credit arrears
  • Borrowing up to 80% loan to value (LTV)
  • Getting a mortgage with low personal income
  • Getting a mortgage with no upper age limits
  • Finding a mortgage with flexible affordability calculations
  • Cashback, free valuation and other incentives
  • Investing regardless of your portfolio size
  • Investing in Houses of Multiple Occupation (HMO)
  • Investing in Multi-Unit Freehold Blocks
  • Investing in buy to let via a limited company or in personal name
  • Investing as a first time landlord
  • Investing as a first time buyer
  • Repayment or interest-only mortgage payment options
  • Borrowing based on rental income from property
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"There are lenders who actively help, if your credit profile is in recovery, talk to us today"

Issues with your credit history are nothing to be embarrassed about. We are here to help and there are buy to let lenders who are too. James Doggett, specialist in adverse credit buy to let mortgages.

Find out more
James Doggett

Costs involved with a bad credit buy to let mortgage

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  • Lenders may charge you for the valuation conducted on your property. They often also charge a product fee, sometimes this can be added to the mortgage.

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  • You will need a conveyancing solicitor who will charge fees. Read our guide to choosing a conveyancing solicitor.

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  • We charge a broker fee for our work. You pay in two parts. A booking fee, once we have found you a mortgage deal, at application. The majority of our fee is paid at completion of the mortgage.

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  • Every mortgage comes with monthly mortgage costs based on the mortgage interest rate the lender charges. These are paid on either an interest-only or capital repayment basis.

How to apply for a bad credit buy to let mortgage

1

Tell our advisors about the property you are investing in, your needs and circumstances. If you have credit concerns, chat to us about them, so we can put you with the right lender.

2

Your advisor will find the best possible deal from a search of thousands of products. They will get you a lender decision in principle; this requires a soft credit search (occasionally it is a hard credit search).

3

Your advisor will call to discuss the product they have found for you. You will be presented with one mortgage, which is the best match for all your needs and offers you the most cost effective option.

4

On your instruction, your advisor will submit your mortgage application. Your account manager then does all liaison and administrative work to complete the deal, whilst keeping you updated at every step.

What our clients say about us

Frequently asked questions

Yes, absolutely! In fact, having well-managed debt can be a positive position to be in, because it demonstrates to a lender that you are a responsible borrower, if you are keeping up with your payments. Those with no history of borrowing have nothing to illustrate their ability to manage finances.

Credit profiles can vary enormously, as can someone's perception of their own position. Some people worry about minor credit blips preventing them from borrowing and can easily get a mortgage, where other people with more significant issues can sometimes underestimate the impact their situation will have on their ability to borrow.

As is so often the case, information is power. Understanding your own situation will put you in the driving seat in enabling you to plan your buy to let investment.

If you have credit issues at the moment this may mean securing a more flexible mortgage now, with a view to potentially changing product when your credit profile is improved. Or, if you need to get your finances more organised ahead of investing, to establish a plan to follow in order to achieve your ultimate goal.

Credit issues which will stop you getting a buy to let mortgage immediately are:

Credit issue

What needs to happen before applying?

Been made bankrupt within the last 6 years

You need to be discharged from bankruptcy (ask for a certificate of discharge), this can be after 12 months of having been made bankrupt.

The bankruptcy will show on your file for 6 years.

However, you can apply for a buy to let mortgage 1-3 years after the date of discharge.

You have an Individual Voluntary Arrangement (IVA)

An IVA will show on your credit history for 6 years. But the good news, 1 year after it has been discharged you can apply for a buy to let mortgage.

Missed mortgage payments in the last 3 months

If you have missed a mortgage payment within 3 months, you will not be able to secure a buy to let mortgage.

You will need to have caught back up with your payments. Once you have 3 months of full payments behind you, you can discuss a buy to let mortgage application with your advisor.

Bear in mind though that until you have 12 months with no missed mortgage payments, the lenders available to you will be very limited. After 12 months have passed more options will be available.

Yes, it is possible to get a buy to let mortgage with a CCJ, it will depend on how much it was for, how recent it was (we can help if it is over 3 months old) and in some instances whether or not it is paid off (which is not always a requirement). Speaking to us will help you identify buy to let mortgage lenders who offer flexibility around CCJ’s. There are many options, depending on your particular scenario.

As an adult it is unlikely that you don’t have a credit score. Bank accounts, motorbike, car or home insurance, student loans, credit cards, store cards are all things that can start to generate a credit profile for you.

The higher your credit score the better. Different credit agencies have slightly different ranges. At the time of writing, Experian use a range of 0-999. Equifax and Transunion use a range of 300-850.

You might consolidate debts by taking out a buy to let mortgage on a property with no borrowing against it, or you might increase the borrowing on an existing buy to let mortgage. Both examples would be classed as a buy to let remortgage to raise capital, as there is no change in legal ownership.

If you were buying a buy to let property and raising extra money at the same time to repay debts, or you were transferring a buy to let property from personal ownership into a limited company buy to let mortgage, then this would be a purchase transaction.

All are perfectly achievable, so long as the loan to value and criteria fits with a lender product.

Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt.

Getting a buy to let mortgage can be more difficult than getting a residential mortgage, because there are greater risks associated with borrowing for a property being rented out, than one you live in.

With a standard residential mortgage, you are making the mortgage payments yourself, whereas when you rent out property a third party is paying the rent, which then covers the mortgage payments.

Clearly, where you are paying to keep a roof over your own head, the importance of keeping up with mortgage payments is very strong.

With a rental property, sometimes tenants may struggle to pay rent, or a rental property may not always be occupied – if one tenant moves out and another cannot be found to move in on the corresponding date. This is why there is a greater element of risk to a lender offering a buy to let mortgage over a residential one.

To mitigate this risk, the costs involved with a buy to let mortgage are higher. The deposit you need to put down is greater, 25% of the property value is typical, but there are a small number of lenders who offer low deposit buy to let mortgages with a 15%-20% deposit. To access the most competitive buy to let mortgage rates you are likely to need a 40% deposit.

Yes, this is because your personal income is not the source of funds for paying the mortgage – the rent from the property is.

Lenders will typically want to see that you have income of some sort, in case there are ever problems getting rent from a tenant, if you have a period where your property is vacant; or if there was a financial change which impacted you making mortgage payments. This means that if you have no personal income whatsoever, the lender options will be very limited.