Can You Remortgage with Arrears and Bad Credit?

If you’re dealing with mortgage arrears and have bad credit, the idea of remortgaging might feel out of reach. But you may be surprised to learn that it’s not impossible. There are lenders out there who specialise in helping people just like you.

In this article, we’ll walk through what it means to remortgage with arrears and bad credit, your options, what lenders look for, and how you can improve your chances of being approved.

What Does “Remortgage with Arrears and Bad Credit” Mean?

Remortgaging is when you switch from your current mortgage deal to a new one, either with your existing lender or a new one. People often do this to get a better interest rate, release equity, or fix their payments.

But if you’ve missed payments on your current mortgage (which is what we mean by arrears), and you’ve got a poor credit score due to things like defaults, CCJs or a history of late payments, then you’ll be seen as a higher risk by many lenders.

Is It Possible to Remortgage with Arrears and Bad Credit?

Yes, it is possible – but it’s not as straightforward as a standard remortgage. High street banks may turn you down, but there are specialist lenders who are more flexible. These lenders look at your full financial picture, not just your credit score.

They’ll want to understand:

• How recent the arrears are – Missed payments from a few years ago may have less impact than recent ones.
• How many payments you’ve missed – One or two missed payments is very different from months of arrears.
• What caused the arrears – If it was due to job loss, illness or another understandable reason, some lenders may take a more sympathetic view.
• How stable your current finances are – If your income is steady now and you can prove affordability, it’ll strengthen your case.

How Bad Credit Affects Your Remortgage Options

Bad credit will narrow down your choices, and you’ll likely face higher interest rates than someone with a clean credit file. But that doesn’t mean you won’t find a deal that works for you.

Your credit report might include:

• Missed payments
• Defaults
• County Court Judgements (CCJs)
• Debt management plans
• Individual Voluntary Arrangements (IVAs)
• Bankruptcy

Lenders assess each of these differently. For example, some may still consider you if your bankruptcy was discharged more than six years ago and you’ve kept up with recent payments.

Can I Remortgage to Pay Off Arrears?

In some cases, yes. You might be able to raise extra funds through remortgaging to clear your arrears. But it depends on how much equity is in your property and whether you can afford the new repayments.

This type of remortgage is sometimes called capital raising. It’s best to speak with a specialist mortgage adviser before going down this road, as it could help you regain control of your finances — or it could increase your financial pressure if not managed carefully.

How to Improve Your Chances

If you’re thinking about remortgaging with bad credit and arrears, here are some practical steps you can take:

1. Check your credit report – Get a copy from all three UK credit reference agencies: Experian, Equifax, and TransUnion. Make sure everything is accurate.
2. Pay off what you can – Clearing or reducing your arrears will improve your application.
3. Stay on top of current payments – Lenders like to see recent stability, so make sure you don’t miss any further payments.
4. Work with a broker – A mortgage broker who specialises in bad credit can match you with lenders who are more likely to accept you.
5. Avoid multiple applications – Too many credit checks can harm your score. Let a broker do the groundwork for you.

So, remortgaging with arrears and bad credit in the UK might not be easy, but it is possible. The key is knowing your options, being honest about your situation, and getting advice from someone who understands the market.

Specialist lenders look at more than just your credit score — they look at the full story. So, even if the high street says no, there could still be a way forward.

If you’re struggling, speak to a mortgage broker or a debt adviser. A bit of guidance can go a long way in helping you turn things around.

Useful Tip:


Always keep records of your income, bank statements, and communication with your current lender. Being organised shows lenders that you’re serious about sorting things out and can help speed up the process.

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