Can You Get House Rates With a Low Credit Score?

Even with a bad credit score you can still secure a mortgage rate, but you'll need to manage expectations and be prepared to offset the risk lenders perceive. Most lenders set a baseline "high-risk" rate for borrowers whose scores fall below the conventional 620-threshold; this rate is typically a few percentage points higher than the best-available market rate, and it often comes with stricter underwriting criteria such as a larger deposit-usually 10-20 % of the property value-rather than the 5-10 % that a well-qualified buyer might need.

To improve your chances, focus on presenting a strong overall financial picture: a stable income, low debt-to-income ratio, and a clear savings history can all help convince a broker or lender that you're a manageable risk despite the credit blemish. Some lenders also offer "credit-repair" programmes that allow you to lock in a provisional rate while you take concrete steps-like paying down a lingering collection or correcting an error on your credit file-to boost your score before the final approval.

Ultimately, the key is to shop around, compare the high-risk offerings of both banks and specialist mortgage brokers, and be ready to negotiate on deposit size or add a co-borrower if that will bring the rate down to a more comfortable level.

Lenders look at a handful of financial signals to gauge how risky a mortgage might be, and your credit score is just one piece of the puzzle. Even with bad credit, a strong showing in other areas can tip the balance toward a more competitive rate or at least keep the application alive.

• Deposit size - A larger deposit reduces the loan-to-value (LTV) ratio, signalling lower exposure and often unlocking a better rate.
• Employment stability - Consistent income over the past 12-24 months reassures lenders that you can meet repayments despite a low score.
• Debt-to-income (DTI) ratio - Keeping total monthly debt obligations below 30-35 % of gross income demonstrates manageable financial pressure.
• Savings and cash reserves - Having several months of mortgage payments saved shows you have a buffer for unexpected expenses.
• Rental or property history - A track record of on-time rent or mortgage payments, even on a different property, can offset credit concerns.
• Bank statements - Regular cash flow and minimal overdraft usage illustrate disciplined money management.

By strengthening these factors, you give lenders a clearer picture of your overall creditworthiness, which can improve the odds of securing a house rate even when your credit score isn't ideal.

If your credit score sits in the 750-800 band, lenders view you as a low-risk borrower. That translates into the most competitive house rates on the market-often a full percentage point below the average rate offered to borrowers with weaker credit. With a strong score you'll also find that banks are more willing to waive ancillary fees, and you can usually secure a mortgage with a modest deposit of 5-10 % without demanding extra guarantees.

When your score falls below 600, the picture changes. Lenders will categorize you as higher risk, which typically pushes the offered rate up by 1-2 percentage points compared with prime borrowers. To offset this, many lenders require a larger deposit-often 15-20 %-or they may ask for a co-borrower or a guarantor to bolster the application. Some specialist lenders will still issue a mortgage, but the resulting rate reflects the additional risk they assume, meaning your monthly payment will be noticeably higher than it would be with a better score.

Even with a low credit score you can still influence the rate you pay by focusing on the factors lenders control most directly. A larger deposit signals lower risk, while a clean-up of any recent negative entries can nudge the broker or bank toward a more favourable offer.

Practical ways to lower your rate

• Boost your deposit: Adding an extra 5-10 percent of the purchase price can offset a low score in many lender models.
• Shop with a broker: Brokers have access to multiple panels and can match you with lenders that specialise in high-deposit, low-score scenarios.
• Pay down existing debt: Reducing your overall loan-to-value (LTV) ratio shortens the gap between your credit profile and the collateral you provide.
• Fix errors on your credit file: A single mis-recorded missed payment can cost several percentage points; dispute inaccuracies promptly.
• Consider a co-borrower: Adding a partner with a better credit score may improve the joint rate, though both parties become liable for the mortgage.

Ultimately, each of these steps reduces perceived risk for the lender, which is the lever they use to set the rate. While none guarantees a "best-rate" outcome, combining a higher deposit with diligent credit cleanup and strategic broker assistance often yields a noticeable improvement over the baseline offered to low-score borrowers.

Putting more cash down can offset the downside of a low credit score. Lenders use the deposit as a safety net; the larger the amount you can spare, the less risk they perceive, and that often translates into a lower rate. For example, moving from a 10 % deposit to a 20 % deposit might shave several percentage points off the offered rate, even if your credit score sits in the "bad credit" band (typically below 620). The exact benefit varies by broker and lender, but the principle holds: a bigger cushion can make the loan look less risky and therefore cheaper.

A higher deposit also improves your negotiating position with a broker. When you present a sizable upfront payment, brokers have more leverage to shop around for lenders who are willing to reward that equity with a better rate. It doesn't guarantee the best possible rate, but it expands the pool of options and often forces lenders to compete on price rather than outright reject an application because of credit concerns.

A broker's edge over a bank comes from the ability to shop multiple lenders in a single conversation, tailoring the offer to the specifics of a low-credit profile. While banks typically work with their own product suite and pricing rules, brokers can match borrowers with lenders who specialise in "bad credit" mortgages, negotiate modest concessions on the rate, or offset a weaker score with a larger deposit. Because they aren't bound by a single institution's underwriting template, brokers often present options that a bank might not even consider, especially when the applicant's credit score sits below the typical 620-threshold.

For example, imagine a borrower with a 580 credit score and a 10 % deposit. A bank may quote a rate of 7.9 % or decline outright, citing risk concerns. A broker, however, could locate a specialist lender willing to accept the same score and deposit but offer a rate of 7.4 % by applying a slightly higher loan-to-value allowance or a modest fee discount. In another case, a borrower with a 610 score and only a 5 % deposit may be turned down by most banks, yet a broker might identify a niche lender that pairs the lower deposit with an adjustable-rate product, keeping the initial rate at 6.8 % for the first two years. These scenarios illustrate how broker flexibility can translate into more competitive rates or, at minimum, keep the mortgage process moving when banks would otherwise stall.

When you apply alone, the lender looks solely at your credit score and your ability to cover the required deposit. If your score falls into the bad credit band, the underwriting algorithm may assign a higher rate or demand a larger deposit to offset the perceived risk. Going solo also means you carry the full responsibility for repayment, which can be reassuring if you prefer a clean financial record, but it leaves you vulnerable to any temporary dip in income or unexpected expense.

Adding a co-borrower-often a partner, parent, or close friend-introduces a second set of numbers into the equation. A solid credit score from the co-borrower can pull the combined profile into a more favourable range, potentially lowering the rate and reducing the deposit requirement. However, both parties become jointly liable; any missed payment reflects on each person's record, and disentangling the loan later can be complicated. If you choose this route, consider involving a reputable broker who can model how each party's finances blend and negotiate terms that balance risk and benefit for everyone involved.

High debt-to-income ratio signals that you may struggle to meet mortgage repayments, prompting lenders to raise the rate or demand a larger deposit.

Recent missed or late payments on credit cards, utilities, or other loans appear as "bad credit" red flags, indicating higher risk and often resulting in a less favourable rate.

A low overall credit score (typically below 620) puts you in the "high-risk" band, so lenders may either increase the rate or require additional security such as a guarantor.

Frequent applications for new credit within a short period suggest financial instability; lenders interpret this as a warning sign and may offset it with a higher rate.

Limited credit history-few accounts or a short track record-makes it harder for lenders to assess your repayment behaviour, leading them to protect themselves with a higher rate or stricter terms.

A history of defaults, repossessions, or bankruptcy remains on your file for several years and is a major red flag that most lenders will either reject outright or offset with a substantially higher rate.

High existing loan balances relative to the amount you wish to borrow can trigger concerns about over-leveraging, prompting lenders to raise the rate or request a bigger deposit.

If your credit score sits in the "bad credit" band, rushing into a mortgage application can lock you into a higher rate or force a larger deposit. Waiting until key factors improve-like your score, savings, or market conditions-often yields a more affordable deal and stronger negotiating power.

1. Monitor your credit score - Track changes for at least three months; a rise of 20-30 points can shave 0.1-0.2 % off the rate offered by many lenders.
2. Boost your deposit - Use the waiting period to save an extra 5-10 % of the property price; a larger deposit reduces the lender's risk and can offset the penalty of a lower score.
3. Watch market trends - When the overall mortgage rate environment dips, even borrowers with bad credit see better offers; timing your application to a rate-down cycle can offset a modest credit deficit.
4. Settle outstanding debts - Paying down credit-card balances or personal loans improves your debt-to-income ratio, a signal lenders weigh alongside the score.
5. Consider a broker's advice - A broker can identify lenders who specialize in low-score borrowers and may have access to promotional rates that appear only during specific windows.

By aligning these steps with a realistic timeline-typically three to six months-you give yourself the best chance of securing a rate that reflects both your credit profile and the prevailing market, without compromising your home-buying goals.