Getting a Mortgage After Bankruptcy

Discharge and the timeline

Bankruptcy in the UK is normally discharged after 12 months, and the record stays on your credit file for six years from the bankruptcy date. Lenders measure everything from the discharge date, so knowing the exact date matters.

A rough picture of what tends to be available: within the first year after discharge, a small number of specialist lenders with substantial deposits; one to three years after discharge, a wider specialist market with 15 to 25 per cent deposit; three to six years, more lenders and improving rates; beyond six years with a clean file since, mainstream lending becomes realistic.

What lenders want to see since discharge

Conduct after discharge matters more than the bankruptcy itself:

• A completely clean payment record since discharge, with no missed payments of any kind
• Evidence you are living within your means, visible in your bank statements
• Some rebuilt credit, such as a modest credit card used and cleared each month
• A stable address and employment or trading history
• A clear explanation of what caused the bankruptcy, particularly where it followed a business failure, illness or divorce

Rebuilding a lendable file

After discharge your credit file is often close to empty, which is its own problem: lenders cannot see any positive history. Rebuilding it deliberately over 12 to 24 months changes your options considerably.

Register on the electoral roll at your current address, open a basic current account and run it without going overdrawn, and use one small credit card for regular spending you clear in full each month. Check a multi-agency report to confirm the bankruptcy is recorded correctly and that any associated defaults are marked as settled.

Existing homeowners and remortgaging

If you kept your home through bankruptcy, remortgaging afterwards is often harder than a fresh purchase because of the equity position and the lender's view of the history. Options do exist, and where they are limited a product transfer with your existing lender can be a sensible holding position until the discharge ages.