How to Remortgage with Bad Credit or Reduced Income
Needing a new mortgage deal when your credit history isn’t perfect or your income has dropped can feel stressful — especially if your fixed rate is ending and you’re worried about being pushed onto a high variable rate.
The good news is that remortgaging with bad credit or reduced income is often possible. The route you take just needs to be handled carefully.
First Things First: Your Two Main Options
When circumstances have changed, there are usually two realistic paths:
1. Product transfer with your current lender
This means switching to a new deal without changing lender.
In many cases, this is the simplest option because:
No new credit checks are required
Affordability is often not reassessed
The process is quicker and lower risk
If your income has fallen or your credit has worsened, this can be a very sensible fallback.
2. Remortgaging to a new lender
If you want to switch, the application will be fully reassessed. This is where criteria matter — and where many people get declined when applying blindly.
What Credit Issues Actually Matter?
Not all credit problems are treated the same.
Lenders typically look at:
How recent the issue was
What type of issue it was
How often it happened
Whether it’s now resolved
In many cases, historic issues that are over 6–12 months old are viewed more favourably, especially if your recent conduct has been clean.
Multiple recent problems, missed payments, or unresolved defaults are more challenging — but not always impossible.
How Reduced Income Affects Remortgaging
If your household income has dropped, lenders will reassess affordability based on your current situation, not what you used to earn.
This can affect:
How much you can borrow
Which lenders will consider you
Whether a switch is possible at all
This is why many people in this position feel “locked in”. It’s not that options don’t exist — it’s that they’re more specific.
Why Equity and LTV Matter More Than Ever
Loan-to-value (LTV) plays a major role when credit or income isn’t straightforward.
Higher equity usually means more flexibility
Lower equity (higher LTV) restricts options
Bad credit plus a high LTV is more limiting
Even a small change in property value or balance can make a difference to what’s available.
Common Problems People Run Into
Homeowners in this situation often face the same issues:
Being declined by their existing lender
Not knowing which credit issues are actually relevant
Reduced income limiting affordability
Fear of becoming a “mortgage prisoner”
Applying to the wrong lender and damaging their credit further
This is why lender matching is critical.
The Right Way to Approach a Bad Credit Remortgage
A structured approach usually looks like this:
Get a full credit report from all three agencies
Confirm your current property value and LTV
Assess affordability based on current income
Identify lenders that accept your specific profile
Submit a fully evidenced application first time
Skipping steps often leads to avoidable declines.
Specialist Lenders and Criteria Matching
Some lenders are set up specifically to deal with:
Historic credit issues
Complex or reduced income
Non-standard circumstances
The key is knowing which criteria apply before applying. This avoids guesswork and protects your credit file.
How We Help
We don’t promise acceptance.
We don’t claim all lenders will say yes.
We identify whether staying put via a product transfer makes sense, and if not, we match your case to lenders that actually accept your credit and income profile — then present it properly to maximise your chances.
The Takeaway
Bad credit or reduced income doesn’t automatically stop you remortgaging — but it does change the strategy.
Sometimes the best move is staying with your current lender. Other times, a specialist approach is needed. The right answer depends on your credit history, income, equity, and timing — not generic rules or comparison tables.
