Last reviewed: June 2026
TL;DR- Borrowers whose credit has deteriorated since their original mortgage may find mainstream remortgage options unavailable.
- A product transfer with the existing lender often does not require a new credit assessment and may be possible even with adverse credit.
- Specialist adverse credit remortgage lenders assess applications case by case on the severity and recency of the credit events.
- Remaining on SVR after a deal ends may be preferable to a poor-rate adverse credit remortgage in some circumstances.
Why Credit Deterioration Affects Remortgage Options
A new remortgage application to a different lender involves a full credit assessment, which considers all credit events since the original mortgage was taken. If defaults, CCJs, missed payments or other adverse events have occurred since the original mortgage, the new lender's automated scoring or underwriting will flag these and may decline or restrict the application. The original lender accepted the application under the credit profile at that time - the new assessment uses the current, deteriorated profile.
This is a significant challenge for borrowers who have experienced financial difficulty during the mortgage term and whose deal is now approaching its end date. The risk of reverting to SVR - potentially at a significantly higher rate than any available remortgage product - adds pressure to the situation.
Product Transfer: The First Option to Explore
A product transfer with the existing lender is typically processed with a much lighter credit assessment than a full new application. Some lenders process product transfers with no new credit check at all, relying on the existing payment history on the current mortgage rather than running a new credit search. For borrowers with adverse credit events that occurred before or during the mortgage term, a product transfer may still be available even where a remortgage to a new lender would not be.
Product transfer rates may not be as competitive as the wider market, but for a borrower with adverse credit the product transfer may be the best available option. The rate available on a product transfer should be compared against the SVR that would apply if no action is taken.
Specialist Adverse Credit Remortgage Lenders
Where a product transfer is not available or where the product transfer rate is uncompetitive, specialist adverse credit remortgage lenders assess applications using the same case-by-case approach as for purchase mortgages: considering the recency, severity and type of adverse event, the payment history on the existing mortgage, the current LTV and the overall financial position. Rates are higher than mainstream remortgage rates but may be better than SVR in some cases.
Improving the Position Before Remortgaging
Where the deal end date is not imminent, borrowers with adverse credit may benefit from working on improving their credit position before the remortgage: ensuring all existing credit commitments are paid on time; allowing time for adverse events to age; correcting any errors on the credit file; and reducing outstanding unsecured debt. Even six to twelve months of improved financial management can meaningfully widen the lender options available at the point of remortgage.
Frequently Asked Questions
Will my current lender know about my adverse credit events?
If the adverse events involved the current mortgage lender (missed mortgage payments, for example), they will already have this information. For adverse events with other creditors, the lender will see these if they run a new credit search at the point of product transfer or remortgage. Lenders that process product transfers without a new credit search will not have updated information on adverse events with third parties from during the mortgage term.
Is it better to remortgage with bad credit or stay on SVR?
This depends on the SVR rate, the available adverse credit remortgage rate and the differential between them. If the SVR is very high and an adverse credit specialist lender offers a meaningfully lower rate, the saving may justify the arrangement costs of remortgaging. If the SVR is not significantly above the available adverse credit rate, or if the adverse credit rate carries a large arrangement fee, remaining on SVR temporarily while the credit position improves may be more cost-effective. A specialist broker can model this for specific circumstances.
What if my house has fallen in value and I am in negative equity?
Remortgaging in negative equity (where the outstanding mortgage exceeds the property value) is extremely difficult with any lender. Most lenders will not accept a remortgage application where there is no equity in the property. Negative equity borrowers are typically limited to a product transfer with the existing lender. The existing lender may or may not offer product transfers to negative equity borrowers - policies vary. Specialist advice should be sought immediately if a deal is ending and the property is in negative equity.
Can a mortgage broker help with adverse credit remortgage?
Yes. A whole-of-market mortgage broker with specialist adverse credit experience is essential for remortgage applications where mainstream lenders are unavailable. The broker will review the full credit picture, identify lenders whose specific criteria the borrower's profile meets and present the application most effectively. Making multiple direct applications to lenders without broker guidance risks multiple hard searches and further credit score damage.
