Remortgage with Bad Credit, Product Transfer or Switch

What is a bad credit remortgage?

A bad credit remortgage is a new mortgage deal on a property you already own, arranged when your credit history includes adverse entries, either as a product transfer with your current lender or as a remortgage to a new lender whose criteria accept the adverse credit. A product transfer keeps the mortgage with the lender you have; a remortgage moves it to a different one. The adverse credit can be missed payments, defaults, county court judgments, a debt management plan, an individual voluntary arrangement or a past bankruptcy. Some people call it an adverse credit remortgage. The mortgage itself is an ordinary one, and the credit history decides which lenders will consider the case and on what terms.

A mortgage on your own home is normally a regulated mortgage, because it meets the legal test that at least 40% of the property is used as a dwelling (legislation.gov.uk: Regulated Activities Order, article 61). It is arranged under the Financial Conduct Authority's conduct rules in MCOB (FCA Handbook: MCOB), whether you stay with your lender or move. A new lender assesses the type, size, age and status of each adverse entry, and a specialist lender may place the borrower in a tier that sets the rate and the maximum loan to value.

The first option to check is usually the product transfer. Where you are not borrowing more and there is no change to the terms likely to be material to affordability, the FCA's rules do not require your lender to reassess affordability (FCA Handbook: MCOB 11.6.3R). Lenders that have signed the Mortgage Charter also support customers who are up to date with payments in switching to a new deal at the end of a fixed rate without another affordability check (HM Treasury: Mortgage Charter). Moving to a new lender means a full application, and with adverse credit that can mean a specialist lender at a higher rate. A specialist remortgage can still be worth it when you need to borrow more or consolidate debts, or when your current lender's options are poor. Arrears on the mortgage itself weigh more than any other entry, both with a new lender and in your current lender's decision on whether to offer a new deal.

Mortgage Lane helps homeowners remortgage with bad credit of every kind. That includes homeowners who have moved onto the lender's standard variable rate after a fixed rate ended, those who need to consolidate debts, those with mortgage arrears, whether cleared or still outstanding, and those who have had a debt management plan, an IVA or bankruptcy. On each case we compare the product transfer your lender offers with the specialist remortgage options that fit your credit history. If a lender has already turned you down, our declined mortgages page sets out the steps to take next. Landlords borrowing on rental property should see bad credit buy to let mortgages.

Bad credit remortgage rates

Bad credit remortgage rates depend on the route, because a product transfer and a specialist remortgage are priced in different ways. A product transfer is priced on your existing lender's range for existing borrowers, often called its retention range. Some lenders offer that range to every eligible borrower whatever has appeared on the credit file since the mortgage began, while others take the file into account, and this varies by lender. A specialist remortgage is priced by the lender's adverse tier and by loan to value. Lenders price in loan to value bands, so more equity can move a case to a cheaper band. A lighter tier usually carries a lower rate. Product fees, valuation and legal costs vary in the same way.

Compare the routes on total cost over the deal, including fees, and against the standard variable rate you would otherwise pay. When a fixed rate ends without a new deal in place, the mortgage moves to the lender's follow-on rate, usually its standard variable rate, which the lender sets and can change. That rate carries no early repayment charge, so it can cover a short gap, but it is usually the most expensive rate in the lender's range. Our fixed term mortgages page explains what happens when a fix ends, and variable rate mortgages covers the standard variable rate itself. The worked example below prices all three routes on one illustrative balance, and you can enter your own offers in the calculator on this page.

Because adverse entries count for less as they age, the length of the new deal is worth choosing with the next switch in mind. A shorter fix can end soon after the entries pass the ages that matter to the lenders suited to your case. Defaults, judgments, IVAs and bankruptcies usually leave the credit file six years after their date. A longer fix gives certain payments for longer, but it can carry an early repayment charge if you leave before it ends.

Fixed rate ending and credit file not clean? Get in touch with your current lender's offers and your credit reports. We compare a product transfer with the specialist options before you switch.

Bad credit remortgage criteria

Bad credit remortgage criteria differ most between the two routes: a product transfer turns on your existing lender's switching rules, while a specialist remortgage is a full application. Four rows in the table rest on published rules, as at October 2026: affordability and extra borrowing (FCA rules MCOB 11.6.3R and MCOB 11.9), the Mortgage Charter (HM Treasury) and mortgage arrears (MCOB 13.3). The other rows describe how lenders' own policies differ. Those policies change often, and the lender's underwriting decides each case. In Mortgage Lane's experience, applicants with adverse credit are usually limited to around 90% loan to value with the lenders we use, and some lenders set a lower maximum for more recent or more serious entries (90% LTV mortgages covers that band).

Each lender decides for itself whether to run a credit search before a product transfer. Some do not where you are not borrowing more, and others do. A new lender reviews the credit file as part of the full application. On a move, the FCA's rules make one exception to the full affordability assessment. Where a new lender takes on a remortgage of the same property with no extra borrowing, it may choose a modified affordability assessment if its own policy provides for one, as long as there has been no payment shortfall on the existing mortgage at the date of the application or at any point in the 12 months before it (FCA Handbook: MCOB 11.9).

Types of adverse credit on a remortgage, and how each is assessed

Each adverse entry is read for its type, size, age and status, and on a remortgage the mortgage account itself matters most.

Mortgage arrears

Missed payments on the mortgage itself are the most serious entry for a remortgage, so it is harder to remortgage with mortgage arrears than with any other entry. The arrears are on the loan being refinanced, which is secured on the home, and lenders assess arrears on a mortgage or secured loan more strictly than missed payments on unsecured credit. Arrears now cleared are assessed by how recent they were and how many months they reached. Arrears still outstanding narrow the choice furthest: some lenders consider the case only once they are cleared, and the remaining options sit with specialist lenders whose criteria accept them.

Your current lender has duties too. On a regulated mortgage, FCA rules require it to deal fairly with a customer who has or may have payment difficulties, to consider options such as extending the term, changing the type of mortgage, deferring payments, reducing the interest rate or adding the arrears to the balance, and not to repossess unless all other reasonable attempts to resolve the position have failed (FCA Handbook: MCOB 13.3). If the lender decides that no replacement deal is suitable for an existing customer in arrears, it must still have regard to those payment difficulty rules (FCA Handbook: MCOB 4.7A.5R). The Mortgage Charter asks customers who are in arrears to keep working with their lender for the support they need. Mortgage Lane does not give debt advice, and GOV.UK points to free debt advice through MoneyHelper (GOV.UK: options for dealing with your debts).

Get in touch with your mortgage statements showing the arrears and when they were cleared.

Missed payments on other credit

Missed payments on credit cards, loans, car finance and other accounts are assessed by how recent they are, how many there are and the type of account. Each month an account is behind is reported to the credit reference agencies as a status marker, and lenders read the run of markers, so one late payment two years ago reads differently from several in the last six months. Some lenders accept older late payments on accounts that are now up to date, and the choice widens as they age. A product transfer with no extra borrowing does not have to be reassessed for affordability, which can suit a borrower whose mortgage payments are up to date and whose late payments are on other accounts. Our mortgages with missed payments page covers how lenders count them.

Get in touch with the dates of the missed payments and the accounts they were on.

Defaults and county court judgments

When you remortgage with defaults or county court judgments on the file, each is assessed by size, age and whether it is satisfied. A default stays on the credit file for six years from the default date, and a judgment for six years from the date of judgment, even if it is paid (ICO: credit explained). In England and Wales a judgment paid in full within one month can be removed from the register, and one paid later can be marked satisfied (GOV.UK: CCJs and your credit rating). A default on a mortgage or secured loan is treated more seriously than one on unsecured credit. Older, smaller and satisfied entries widen the choice of lenders. Our mortgages with defaults and CCJ mortgages pages cover the tiers in detail, including how to remortgage with a CCJ.

Get in touch with the date, amount and status of each default or judgment.

Debt management plans and IVAs

A plan that is still running narrows the choice, often to specialist lenders, and completing it opens more lenders over time. A debt management plan is an agreement with creditors that covers unsecured debts only, and creditors do not have to agree to it (GOV.UK: Debt Management Plans). Some specialist lenders consider a remortgage during a plan, sometimes to consolidate the plan's debts into the mortgage, and lenders' rules on an active plan vary. An individual voluntary arrangement is a formal agreement run by an insolvency practitioner, and it stays on the credit file for six years from the date it starts (Insolvency Service: IVA key facts). Under the standard terms of the 2025 IVA Protocol you must not obtain credit of more than £500 without the supervisor's prior written approval (Insolvency Service: IVA Protocol 2025 standard terms), so the supervisor needs to know before the mortgage changes during an IVA. Our IVA mortgages page covers the protocol, the home and how to remortgage after an IVA.

Get in touch with your plan or IVA status and its start and end dates.

Past bankruptcy

Past bankruptcy is assessed by the time since discharge. In England and Wales a bankrupt person is usually discharged automatically after 12 months, and the bankruptcy can stay on the credit file for six years from its date (GOV.UK: when bankruptcy ends). The home matters as much as the credit file, because where there was equity the trustee may have taken an interest in the property. If the trustee has not started to deal with the family home within three years, it will usually be transferred back (GOV.UK: bankruptcy and your home). A remortgage needs any interest the trustee held in the home to have been resolved. Specialist lenders consider applicants once a period since discharge has passed, which each lender sets, and more lenders consider them once the bankruptcy has left the credit file. Our mortgages after bankruptcy page covers the timeline.

Get in touch with your discharge date and any letters from the trustee about the home.

Scotland and Northern Ireland

The FCA's mortgage rules on this page apply across the UK, but the debt remedies behind the entries differ. In Scotland a court decree takes the place of a county court judgment, and a debt payment programme under the Debt Arrangement Scheme, run by the Scottish Government's Accountant in Bankruptcy, repays debts over time with protection from creditors (mygov.scot: Debt Arrangement Scheme). A protected trust deed is the Scottish formal arrangement with creditors, and bankruptcy, which Scots law calls sequestration, is also handled by the Accountant in Bankruptcy. In Northern Ireland the High Court makes bankruptcy orders (nidirect: bankruptcy). These entries reach the credit reference agencies in the same way, and lenders read them by type, age and status as they do elsewhere.

Get in touch with the details of the entry, wherever in the UK it was recorded.

Product transfer first

A product transfer moves you to a new deal with your existing lender, and where you are not borrowing more and nothing material to affordability changes, FCA rules let the lender do this without a new affordability assessment. Whether the lender also runs a credit search varies: some do not, and others check the file as part of the switch. Lenders that have signed the Mortgage Charter have committed to supporting borrowers who are up to date with payments in switching to a new deal at the end of a fixed rate without another affordability check. For a product transfer with bad credit on the file, this can mean the lender's normal range for existing borrowers, which may cost less than a specialist remortgage. You cannot borrow more through a product transfer, beyond financing a fee, without a full affordability assessment, and a borrower in arrears may not be offered one.

What the FCA rule says

The affordability rule in MCOB 11.6.2R does not apply when a lender replaces or varies an existing regulated mortgage with the same customer, provided two conditions are met. The new deal must not involve borrowing more than the amount outstanding, apart from financing a product or arrangement fee, and there must be no change to the terms that is likely to be material to affordability (FCA Handbook: MCOB 11.6.3R). The rule also covers a move to a lender in the same group where the original lender no longer takes on new customers. It removes the requirement to reassess but does not stop a lender from checking, and each lender's own policy decides what it asks. A change to the term or the repayment type can count as material, and a further advance fails the first condition, so either can bring a full assessment.

The Mortgage Charter

The Mortgage Charter is a set of commitments by mortgage lenders, published by HM Treasury on 26 March 2026, when lenders reaffirmed their commitment to it. Its signatories represent approximately 90% of the mortgage market, and the Charter says its switching commitment applies to 97% of the market, for customers who are up to date with payments and are not seeking to borrow more or change their repayment type or term. Customers approaching the end of a fixed rate can lock in a new deal up to six months ahead, the longest a lender may offer under the Charter, and can ask for a better like-for-like deal with their lender until the new term starts, if one is available. Contacting your lender to discuss support does not affect your credit file. The commitments apply to regulated residential mortgages and not to buy to let, and customers already in arrears are asked to keep working with their lender (HM Treasury: Mortgage Charter).

When a product transfer is not offered

A lender may decline a product transfer while a mortgage is in arrears, and policies vary. Under the FCA's rules, a lender that concludes no replacement deal is suitable for an existing customer in arrears must still have regard to the payment difficulty rules in MCOB 13.3, which include considering a lower interest rate. Clearing the arrears can open the lender's range for existing borrowers again. For the modified assessment a new lender can use, the FCA treats arrears under a repayment arrangement as a payment shortfall until they are repaid, so the 12 months run from when the arrears are repaid, or from when the lender added them to the balance (FCA Handbook: MCOB 11.9.3G). Where a lender no longer offers new deals at all, leaving its follow-on rate means a remortgage to another lender.

Product transfer or the standard variable rate

Staying on the standard variable rate usually costs more than a product transfer, and the difference adds up with every monthly payment. The standard variable rate has no early repayment charge, so it can suit a short stay before a sale or a remortgage that is weeks away. Otherwise, compare the product transfer, the standard variable rate and any specialist remortgage on total cost over the deal to see which route costs least on your figures. In the worked example below, the product transfer costs £5,351 less than the standard variable rate over two years.

When a specialist remortgage fits

A specialist remortgage fits when the product transfer cannot do what you need, or costs more over the deal than moving. It is a full application to a lender whose criteria accept your credit history, with a new lender valuation and legal work, and the rate is set by the lender's tier for the adverse credit.

You need to borrow more

A bad credit remortgage for debt consolidation, home improvements or another purpose means a full assessment, whichever lender provides the extra borrowing. Specialist lenders allow capital raising on a bad credit remortgage within the loan to value limit they set for the adverse tier. Where the main purpose is consolidating debts, an adviser must take account, where relevant, of the cost of repaying the debts over a longer period, whether it is appropriate to secure debts that were unsecured, and, where you are known to have payment difficulties, whether an arrangement with your creditors would suit you better (FCA Handbook: MCOB 4.7A.15R). Our debt consolidation mortgages, remortgage for home improvements and release equity from your home pages cover each purpose.

Your lender offers no product transfer

Where your lender will not offer a new deal, for example while you are in arrears or because it no longer lends, a remortgage to another lender moves you off the follow-on rate. With no payment shortfall on the mortgage in the last 12 months and no extra borrowing, a new lender may use the modified affordability assessment in MCOB 11.9; otherwise the specialist lender's full criteria apply.

Your lender's rates cost more overall

A product transfer offers only your current lender's range. If a specialist rate, after fees, costs less over the deal than the product transfer, the remortgage can be worth the extra work. That is more likely where the adverse entries are older or smaller and fit a lender's lighter tier. The calculator on this page sets the two side by side.

You want to change the structure

A change of term, repayment type or applicants can take a case outside the product transfer rules, because a change likely to be material to affordability brings a full assessment, and the Mortgage Charter's switching commitment does not cover changing the repayment type or term. Typical changes are extending the term, moving between interest-only and repayment, and taking a joint borrower off the mortgage. The Charter separately lets customers who are up to date, on a one-off basis, switch to interest-only payments for six months or extend the term with the option to go back to the original term within six months, without a new affordability check. Our single person mortgages page covers taking a mortgage into one name, and interest only residential mortgages covers that repayment type.

A further advance or second charge instead

Where the main mortgage is on a good rate, the extra money does not have to come from moving the whole mortgage. A further advance from your existing lender is assessed in full on the new borrowing, and it depends on that lender's view of the adverse credit. A second charge loan leaves the main mortgage and its rate untouched. Secured on your home, it is a regulated mortgage contract in its own right, because the legal definition covers any mortgage or charge on land that meets the dwelling test, and its rates are set by each lender and may be higher than first charge rates. Our second charge mortgages page explains how they work. In the worked example below, adding £15,000 by remortgaging costs £3,169 over two years in the higher rate on the existing balance alone, so the amount you need matters.

How a bad credit remortgage is arranged

1. Current lender's offer. The product transfer options and terms from your existing lender: the rates, the product fee, whether it runs a credit search, and how far ahead of the end of the fixed rate it lets you book a deal.
2. Credit reports. Reports from all three main credit reference agencies, Equifax, Experian and TransUnion, with each entry dated: mortgage arrears, missed payments, defaults, judgments, plans and insolvency. You can ask each agency for your statutory credit report free of charge, and lenders choose which agency they use (ICO: credit). Our low credit score mortgages page covers what lenders see on the file.
3. Specialist comparison. The entries set against each specialist lender's tiers, the loan to value limit for that tier and the total cost over the deal, including fees, for each lender whose criteria fit, with affordability checked for any extra borrowing.
4. Recommendation. A product transfer, a specialist remortgage, a further advance or second charge for the extra borrowing, or a short deal timed to the file improving; for debt consolidation, the cost of a longer repayment period and of securing debts that were unsecured.
5. Completion. On a product transfer, the new rate starts when the old one ends. On a remortgage, the legal work repays the old mortgage, and any debts being consolidated are repaid from the advance.

Product transfer or specialist switch: the case

An illustrative homeowner's five-year fix ends next month. Two years ago a period of illness left a default on a credit card and two missed mortgage payments, all since brought up to date. They want £15,000 to clear the remaining card debt.

Step 1. Four routes compared

Because the mortgage is up to date, a product transfer with no extra borrowing falls within the FCA rule and, with a lender that has signed the Mortgage Charter, within its switching commitment. The table sets out the four routes, what each one requires and what it provides. Lender policies vary, and the outcomes are illustrative, not an offer of finance.

Step 2. What each route costs over two years

To put figures on the routes, take a home worth £250,000 with £160,000 outstanding and 20 years left, and a two-year deal on each route, repaid on a capital and interest basis. The product transfer rate is 5.2%, the illustrative rate used across our guides. The specialist rate is set one point higher, at 6.2%, only to show the arithmetic, and the standard variable rate is 7.2%, the illustrative follow-on rate our fixed term mortgages page uses. None is a product rate or a market figure. Each new deal carries a £1,000 fee, paid rather than added to the loan. The loan to value is 64% now and 70% with the £15,000 added, both inside the 90% that adverse credit lending usually reaches in our experience.

On these figures, the product transfer costs £5,351 less over two years than staying on the standard variable rate, and the specialist remortgage costs £4,982 more than the product transfer. The comparison is not like for like, because only the specialist route clears the card debt, so Step 3 separates the cost of the £15,000 from the cost of moving.

Step 3. Where the extra cost comes from

Moving the whole mortgage to a specialist lender to add £15,000 raises the rate on the entire balance. The table splits the specialist route's extra cost into the higher rate on the £160,000 already borrowed and the interest on the new £15,000, over a two-year and a five-year deal.

Over two years the £15,000 costs £4,982 on the specialist route, and only £1,813 of that is interest on the £15,000 itself; the other £3,169 is the higher rate on money already borrowed. Over five years the higher rate alone costs £7,752. Any route that borrows the £15,000 charges interest on it. A product transfer now, with the card debt cleared from income or a smaller second charge, followed by a remortgage once the arrears are older, can cost less. Whether it does depends on the rate the second charge or further advance carries and how long the card debt runs. Card interest is not modelled here.

Step 4. Timing the switch as the file improves

The default and the two missed mortgage payments are two years old. A two-year product transfer ends when they are four years old, with two more years of payments made on time, and the remortgage can then be placed with lenders whose lighter tiers take older entries. A default leaves the credit file six years after the default date, so a five-year deal taken now would run past that point. The shorter deal leaves room to raise the £15,000 on a lighter tier sooner. The longer one gives certain payments for longer and may carry an early repayment charge if the plan changes.

What decides the case

Price the product transfer first, then decide whether the extra borrowing is worth moving the whole mortgage to a specialist tier, or can wait until your file improves. The amount you need, the gap between the two rates and the length of the deal decide the answer. Keeping every payment up to date helps you improve your credit before you remortgage again, and it keeps open the product transfer, the Charter's switching commitment and the modified assessment.