Can I Get a Mortgage After Bankruptcy?

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Facing bankruptcy can be a daunting and stressful experience, especially when it comes to future financial prospects like securing a mortgage. However, bankruptcy doesn’t mean the end of your homeownership dreams.

With the right approach, careful planning, and a bit of patience, it is possible to get a mortgage after bankruptcy.

Here, we’ll explore the steps you can take to rebuild your credit, understand the types of mortgages available to you, and improve your chances of becoming a homeowner once again.


Understanding Bankruptcy

Bankruptcy is a legal process that offers relief to individuals who cannot repay their debts. While it can provide a fresh start, it significantly impacts your credit score and financial reputation. Here in the UK, bankruptcy usually lasts for a year, but the record stays on your credit file for six years, affecting your ability to obtain credit, including mortgages.


The Impact of Bankruptcy on Mortgage Eligibility

The primary concern for lenders is your creditworthiness, and bankruptcy signals a period of financial distress. This makes lenders cautious, often resulting in higher interest rates or outright rejections.

However, obtaining a mortgage post-bankruptcy is not impossible. Several factors influence your eligibility:

  1. Time Since Bankruptcy: The more time that has passed since your bankruptcy, the better. Lenders prefer to see at least three years since your discharge, as this indicates a period of financial stability.
  2. Credit Score: Post-bankruptcy, your credit score will be low. Rebuilding your credit is crucial. Regularly checking your credit report, correcting any errors, and demonstrating responsible credit use can improve your score.
  3. Deposit Size: A larger deposit reduces the lender’s risk. Post-bankruptcy, you may need a deposit of 25-30% compared to the typical 5-10%.
  4. Employment Status: Stable employment and a steady income reassures lenders of your ability to make repayments.
  5. Affordability Assessment: Lenders will closely examine your income, outgoings, and overall financial situation to ensure you can afford the mortgage.


Steps to Improve Your Chances of Getting a Mortgage

  1. Rebuild Your Credit: Start by obtaining a secured credit card or a small loan and ensure timely repayments. Avoid missing any payments, as this can further damage your credit score.
  2. Save for a Larger Deposit: Aim for at least a 25% deposit. This not only improves your chances of approval but may also secure better interest rates.
  3. Maintain Stable Employment: Lenders prefer applicants with a stable job history. If you’re self-employed, ensure you have at least two years of consistent income records.
  4. Seek Professional Advice: Consulting a mortgage broker with experience in post-bankruptcy mortgages can provide valuable guidance. They can help you understand your options and connect you with sympathetic lenders.


Types of Mortgages Available Post-Bankruptcy

Specialist Lenders: Some lenders specialise in providing mortgages to individuals with adverse credit histories, including bankruptcy. These lenders understand your situation better and offer tailored solutions.

High-Street Lenders: While most high-street lenders may be reluctant, a few might consider your application if you meet their criteria. It often depends on the time elapsed since your discharge and your current financial stability.

Guarantor Mortgages: If you have a family member or friend willing to act as a guarantor, it can significantly improve your chances. The guarantor agrees to cover the repayments if you default.


Case Study: John’s Journey to Homeownership After Bankruptcy

John declared bankruptcy in 2015 due to business failure. Determined to own a home again, he took several steps to rebuild his financial health:

Rebuilding Credit: John obtained a secured credit card and a small loan, ensuring timely repayments. He also corrected errors on his credit report.

Stable Employment: He found stable employment, which reassured lenders of his repayment capability.

Savings: John diligently saved money, amassing a 30% deposit.

Professional Advice: Consulting a mortgage broker, John was guided to a specialist lender. Despite a higher interest rate, he secured a mortgage, marking his return to homeownership.



While bankruptcy presents significant challenges, it doesn’t spell the end of your homeownership dreams. With time, diligence, and the right strategy, obtaining a mortgage post-bankruptcy is achievable. Rebuild your credit, save diligently, and seek professional advice to navigate the path to your new home. Remember, each financial step you take today brings you closer to achieving your goal of owning a home once again.


If you’d like help with a post-bankruptcy mortgage or protection products available, contact one of our friendly advisors who would be happy to have a chat and help guide you through it all.


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