Getting a Mortgage With Defaults
Not all defaults are treated the same. A missed mobile phone bill and a mortgage default sit at opposite ends of the scale, and several lenders disregard the smaller ones completely. A mortgage with defaults is common, and lenders read a satisfied default very differently from an open one.
- How communications, unsecured and secured defaults differ
- The small defaults lenders ignore altogether
- Lenders that consider defaults from the last six months
- Whole-of-market advice on adverse credit cases
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Why the type of default matters more than the number
Defaults fall into three groups, and lenders treat them very differently. Communications, utility and mail order defaults are the mildest and are frequently disregarded outright. Unsecured defaults on credit cards, loans and overdrafts are the standard driver of which product tier you land in. Secured defaults, meaning missed payments on a mortgage or secured loan, are treated far more strictly than either. Most guidance lumps all three together, which is why people often assume their position is worse than it is.
A default stays on your credit file for six years from the date of default, regardless of whether you later settle it. Settling removes the live objection but does not reset the clock, and it does not move you up a product tier, because tier placement is based on the worst status already recorded inside the lender window. For that reason waiting is frequently more effective than paying, and knowing exactly when each default was registered is the single most useful thing you can bring to an adviser.
The small-balance thresholds are where most opportunity sits. Pepper Money ignores up to two individual defaults of 200 pounds or less on several of its ranges, provided they are utilities, communications or mail order. Kensington does not consider communication and insurance defaults at all and disregards combined utility defaults up to 250 pounds. Bluestone disregards telecoms and utility defaults under 500 pounds, and Vida excludes any item under 500 pounds from tiering. A forgotten broadband account often turns out to be irrelevant.
One structural point is worth understanding if you have several old, small defaults. Kensington applies an age test with no limit on the number or value of defaults once they are 36 months old on its Select range, and 24 months on Core. Pepper and Precise instead count them. If your file has many small defaults that are all a few years old, the age-test lenders are frequently the better route even though the headline criteria look similar. That is why a mortgage with defaults is placed on the shape of the credit file, not the headline number. GOV.UK sets out the main options for dealing with debt, and the ICO explains your rights over the credit reference data lenders rely on.
At a Glance
Unsecured defaults: what each lender accepts
| Lender and product | Defaults permitted | Max LTV |
|---|---|---|
| Pepper Money – Pepper6 | None in the last 6 months | 80% |
| Pepper Money – Pepper12 | None in 12 months | 85% |
| Pepper Money – Pepper24 | None in 24 months | 85% |
| Pepper Money – Pepper36 | None in 36 months | 90% |
| Kensington – Resi 6 | 0 in 6 months; 1 in 24 months up to £1,500 | Not published |
| Kensington – Resi 12 | 0 in 12 months; 1 in 24 months up to £1,500 | Not published |
| Kensington – Core | 24 months old, no limit on number or value | Not published |
| Kensington – Select | 36 months old, no limit on number or value | Not published |
| Aldermore – Level 2 to Level 5 | Progressively more lenient, up to 4 defaults in 36 months | 95% falling to 80% |
| Accord | None registered in the last 6 years | Standard range |
Criteria correct as at 10 August 2026. Sources: Pepper Money Mortgage Criteria Guide; Kensington Credit History Sheet; Aldermore Residential Criteria Guide (July 2026); Bluestone product guide and May 2025 criteria update; Vida Lending Criteria; Precise Residential Product Guide; Accord and Virgin Money adverse credit criteria. Lender criteria change without notice and this table is a general guide, not advice or an offer of credit. Your own circumstances, the property and the lender’s assessment at the time will determine what is actually available to you.
Defaults that are disregarded entirely
Communications, utility and mail order defaults are the mildest category and often carry no weight at all. A satisfied default in this group rarely changes the lender list at all.
| Lender | What is disregarded |
|---|---|
| Pepper Money | Up to 2 individual defaults of £200 or less on Pepper 24, 18, 12 and 6, and 1 on Pepper 36. Utilities, communications and mail order only. |
| Kensington | Communication and insurance defaults not considered at all. Combined utility defaults up to £250 disregarded. |
| Aldermore | All communication defaults acceptable at Level 5. Other combined CCJs and defaults up to £300 per application. |
| Bluestone | Telecoms and utility defaults under £500 disregarded, raised from £300 in May 2025. |
| Vida | Any item under £500 excluded from product tiering. |
Criteria correct as at 10 August 2026. Sources: Pepper Money Mortgage Criteria Guide; Kensington Credit History Sheet; Aldermore Residential Criteria Guide (July 2026); Bluestone product guide and May 2025 criteria update; Vida Lending Criteria; Precise Residential Product Guide; Accord and Virgin Money adverse credit criteria. Lender criteria change without notice and this table is a general guide, not advice or an offer of credit. Your own circumstances, the property and the lender’s assessment at the time will determine what is actually available to you.
Secured defaults and mortgage arrears
This is the category that does not soften as you move down the tiers, which surprises people who assume a more expensive product buys more tolerance. On a mortgage with defaults, a secured marker outweighs several unsecured ones.
| Lender | Secured arrears permitted |
|---|---|
| Precise – Tiers 1 and 2 | 0 in 12 months, 1 in 36 months (worst status) |
| Precise – Tiers 3, 4 and 5 | 1 in 12 months, 3 in 36 months at all three tiers. Dropping to a more expensive tier buys no extra tolerance. |
| Pepper Money | Status 0 in the last 6 months and none missed in the last 12 |
| Vida | No secured arrears within the last 6 months on any tier |
| Bluestone | Clear and AAA none; AA 1; A 2; BBB 3 to 4 instances |
| Virgin Money | None in last 6 months, max 2 months per mortgage in last 2 years |
Criteria correct as at 10 August 2026. Sources: Pepper Money Mortgage Criteria Guide; Kensington Credit History Sheet; Aldermore Residential Criteria Guide (July 2026); Bluestone product guide and May 2025 criteria update; Vida Lending Criteria; Precise Residential Product Guide; Accord and Virgin Money adverse credit criteria. Lender criteria change without notice and this table is a general guide, not advice or an offer of credit. Your own circumstances, the property and the lender’s assessment at the time will determine what is actually available to you.
What decides how a default is treated
Underwriters weigh these together rather than counting defaults in isolation. Lenders read the credit file as a whole before deciding how a mortgage with defaults is priced.
How we place an adverse credit case
Specialist lenders underwrite manually, so how a case is presented genuinely changes the outcome.
Read the file, not the score
We start with your actual credit file from all three agencies. Lenders assess the underlying file and run their own internal scorecard, so the score you see is not the number they use.
Date every event
Each marker runs on its own clock. A CCJ runs six years from the judgment date, a default from the default date and a bankruptcy from the order date. Knowing which window each falls into decides your lender list.
Match you to a tier
We place you against published criteria rather than guessing, and check whether a short wait would move you into a materially cheaper tier before you apply.
Package the case properly
Specialist lenders underwrite manually. A clear written explanation of what happened and what has changed since often carries more weight than the marker itself.
Plan the exit
Adverse credit ages out. We look at a term that lets you move back towards mainstream pricing as soon as your history allows, rather than locking you in for longer than you need.
Where to go next
The pages most often read alongside this one.
Mortgage With a CCJ
How judgments are read, when they stop counting and what satisfying one changes.Read the guideLate or Missed Payments
Which markers lenders actually count, and how much recency matters.Read the guideHow Far Back Lenders Look
When each clock starts and when adverse credit drops off your file.Read the guideBad Credit Lender Criteria
What the specialist lenders publish, side by side, and how the tiers differ.Read the guideBad Credit Rates and Costs
What the premium really is, and why published figures overstate it.Read the guideLoan to Value Calculator
Find the LTV band your deposit puts you in, and why that changes the rate.Open the calculatorRead More Before You Apply
A marker on your file is only half the picture. Deposit and affordability decide the rest.
How Much Deposit Do You Need?
What each deposit size actually reaches, and what staying small costs you.
Low Deposit Mortgages
What is realistic at five per cent, and which lenders still look at it.
Adverse Credit Mortgages
Defaults, CCJs and arrears, and the lenders that price them properly.
How Much Can I Borrow?
A realistic borrowing figure before you start viewing properties.
Find out how your defaults would be treated
Send us the dates, values and account types. We will tell you which are likely to be ignored, which set your tier, and whether a short wait would move you somewhere cheaper.
Read more about our adverse credit mortgages, lender criteria or specialist mortgages.
Getting a mortgage with defaults: common questions
How long does a default stay on my credit file?
Six years from the date of default, whether or not you later settle it. Settling changes the status shown but does not shorten the six years and does not move you up a lender tier, because tier placement is based on the worst status recorded inside the window. A satisfied default recorded outside the window is usually ignored.
Can I get a mortgage with a default from last year?
Usually yes. Pepper Money will consider a case where no defaults were registered in the last 12 months at up to 85 per cent LTV, and its Pepper6 range goes down to six months at 80 per cent. Kensington Resi 6 allows one default in 24 months up to 1,500 pounds with none in the last six.
Do utility and mobile phone defaults count?
Frequently not. Kensington does not consider communication and insurance defaults at all. Pepper Money disregards up to two individual defaults of 200 pounds or less where they are utilities, communications or mail order. Bluestone ignores telecoms and utility defaults under 500 pounds. It is always worth checking the exact category and balance.
Should I pay off my defaults before applying?
It depends what you are trying to achieve. Settling removes the live objection and is generally viewed positively, but it does not reset the six years and does not upgrade your tier. If your money is better used as deposit, that may do more for your application than settling an old default, and we would look at both before advising.
I have lots of small old defaults. Which lenders suit me?
The age-test lenders. Kensington applies a 36 month test on Select and 24 months on Core with no limit on the number or value of defaults once they are that old, which is structurally different from lenders that count each one. That often makes a file with many small aged defaults far more placeable than it first appears.
Are mortgage arrears treated differently from other defaults?
Yes, and much more strictly. Secured arrears are the harshest category and notably do not soften as you move down the product tiers. Precise applies the same secured arrears limit at Tiers 3, 4 and 5, so paying for a more expensive product buys no additional tolerance. Vida will not accept secured arrears within the last six months on any tier.
How many defaults is too many?
There is no universal number. Aldermore accepts up to four defaults in 36 months at its wider levels and Bluestone up to four at BBB. Kensington places no limit on number or value once defaults are 36 months old. What usually matters more is whether any were registered recently.
Will a default stop me getting a high street mortgage?
For six years, generally yes. Accord requires no defaults registered in the last six years. That is why the specialist market exists, and why the practical question is which specialist window your defaults fall into rather than whether the high street will help.
How much more will it cost?
At the same loan-to-value, the difference between a lender cleanest and widest adverse tier is typically around one percentage point. Bigger published figures usually conflate the credit tier premium with the higher rate charged for a smaller deposit, so any figure should state the LTV it assumes.
Do I need a broker?
Most lenders that consider recent defaults are intermediary-only, and the differences between counting lenders and age-test lenders are not obvious from the outside. These cases are also manually underwritten, so how the case is presented affects the outcome.
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