Coming off a specialist rate? You may have moved on.
If you took a mortgage with adverse credit two years ago, a great deal has probably changed — the adverse has aged, you have a payment record to point at, and if your home has held or gained value, your loan-to-value may have improved. Each of those can work in your favour.
David Bourne
Three things quietly moved in your favour
The adverse got older. Lenders think in windows, and events matter far less at two years than at six months. Something that put you into specialist territory when you applied may now sit inside a mainstream lender's tolerance.
You have a mortgage payment record. This is the one people undervalue. Two years of paying a mortgage on time is the most relevant evidence a lender can have about whether you will pay a mortgage on time. It carries real weight.
Your loan-to-value may have improved. You have been repaying, and if the property has held or gained value, the gap between what you owe and what it is worth has widened — though values can fall as well as rise. A better loan-to-value opens up lenders and prices that were closed at the start.
What normally happens if you do nothing
Your fixed or discounted rate ends and you move onto the lender's standard variable rate, which is usually the most expensive rate they offer. Specialist lenders' standard rates are often higher again. Doing nothing is a decision with a price tag, and it is the single most common expensive mistake in this part of the market.
When to start
Around six months before your current deal ends. Offers are typically valid for several months, so you can secure something early and let it take effect when your existing rate finishes — which protects you if rates rise in the meantime, and can usually be reviewed if they fall — though any fees already paid may not come back.
Leaving it to the final fortnight is what forces people onto the standard rate while an application is still going through.
What I look at
What has dropped off your file since you applied, what is still on it and when it will go, how your payment record reads, what the property is worth now, and whether your income has changed shape. Then whether you can move to a mainstream lender, a better specialist rate, or whether staying put for another few months is genuinely the better call. Sometimes it is, and I will say so.
The questions I get on remortgages
Will a new lender see the old adverse?
If it is still within six years, yes. But its age matters more than its presence, and your payment record since sits alongside it.
Can I borrow more at the same time?
Often, yes — for improvements or to consolidate. Think carefully before securing other debts against your home: consolidating debt into a mortgage can cost more over the full term even when the monthly payment falls, and it puts your home behind debts that were not secured on it before. I will show you both numbers before you decide.
What if my circumstances got worse, not better?
Then we look at what is possible now, including a product transfer with your existing lender, which is usually simpler. Ring anyway — a bad year does not mean there is nothing to do.
Are there fees to switch?
Sometimes an early repayment charge if you move before your deal ends, and there may be arrangement or valuation fees. I will put the whole cost next to the saving so the comparison is a real one.
Two years on, you are probably in a better position than you think.
Is one of these closer to your plan?
The same credit history behaves differently depending on what you are actually trying to arrange.
Right to Buy with bad credit
The discount can do the deposit’s job. The credit file is the part I deal with.
Second charge with bad credit
Borrow without disturbing your mortgage — and understand what you are securing it against.
Shared ownership with bad credit
Fewer lenders do it at all, and the rent counts against what you can borrow.
Buying your first home with bad credit
No mortgage history to point at, and an old default you have been told ruins everything.